Best paper on blockchain: https://nvlpubs.nist.gov/nistpubs/ir/2018/NIST.IR.8202.pdf
Start by watching this video. Then read these two articles:
and the original bitcoin article. Stop. Do not read more – you will learn more by reading and understanding few high quality papers than reading all the million posts on medium.
A blockchain is an append-only distributed database where each record has a link to the previous record just like Git.
What is the business case for blockchain?
- Removes the middleman from transactions thereby reducing cost and time to transact
- Very secure
There are 4 key components to a blockchain:
- Distributed Ledger: every participant will have a copy of the ledger and there is no master copy. This topology is also known as P2P (peer-to-peer) to emphasize the fact there is no master node. Everyone is an equal.
- Cryptographic Chain: This is very similar to Git. All commits are signed by public key and linked together to form a hash chain. This + consensus is what makes the blockchain secure. If someone tries to tamper with the ledger the hashes will change and other nodes will reject the changes. The data structure which enables all of this is known as Merkle tree.
- Consensus: Changes to the ledger are audited by other nodes. Different consensus policies can apply. Consensus also covers serializing commits i.e., establishing a total order on the commits (which need not be chronological order). The purpose of consensus is to ensure all peers have the same copy of the ledger – they all see the same truth.
- Smart Contract: Ability to embed business rules as executable code built into the blockchain itself without any additional layer of software. This paves the way for “programmable money”. One can embed conditional statements such as if condition X is satisfied money should be transferred e.g., automating real estate contracts without need for escrow.
Further reading on blockchain:
https://hackernoon.com/we-already-know-blockchains-killer-apps-f2d443eba35
https://hackernoon.com/blockchains-dont-scale-not-today-at-least-but-there-s-hope-2cb43946551a
https://www.wired.com/story/theres-no-good-reason-to-trust-blockchain-technology/
Further reading specific to bitcoin (Bitcoin != Blockchain)
http://www.imponderablethings.com/2013/07/how-bitcoin-works-under-hood.html
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