Crypto Academy / Season 3 / Week 6 - Homework Post for Professor @stream4u - Topic: Let's Open The Blockchain.

1. What is Blockchain and What are the types of Blockchains / Explain in detail the types of Blockchain?

Blockchain, is known as a group of digital records known as Blocks. In a simple understanding, Blockchain is a shared, of unchangeable ledger that perform the process of recording transactions and tracking of virtually assets on the blockchain. In other way round is a system of recording transaction or information in such a way that it can't be change, cheat or hack.

In a blockchain, transactions are identical and distributed within the network or computer systems on the blockchain. Blockchain is contain with a number of block each time new transaction is being carried out on the blockchain,the transaction is added when new to the ledger. In the blockchain the information that are stored is known as hash which is an immutable cryptographic signature, whereas each record or transaction on the ledger is being stored in a block of data.

In a blockchain, the distributed and immutable are the main properties of blockchain. Immutable is what give you a trust that the blockchain is accurate. The distributed is what protects the blockchain from getting attacks.

Types of blockchains
There are several types of blockchains. For the purpose of this homework post, in will only explain for types which are; public, private permissioned and consortium.

Public blockchain
A public blockchains is the type of blockchain that is open for everyone to participate in. It is highly secured as it make use of hash for performing cryptographic. The public blockchain make use of proof of work (PoW) as well the proof of Stake (PoS) consensus mechanisms. Ethereum (ETH) and Bitcoin are example of a public blockchains.

Private blockchain
A private blockchains is the opposite of public blockchains, it is not open, they is a restrictions when accessing it.This type of blockchain is regarded as a centralized network. It is governed by one organization, that give control on how the network should be use.

Permissioned blockchain
Permissioned blockchain is the type of blockchain that bring together elements of both private and public blockchains. Permissioned allows organizations to set up a private permission based system together with a public Permissionless system which gives them access to control who can access the data that in stored in the blockchain and the data that can be access openly.

Consortium blockchains
The consortium blockchain is also referred to as federated blockchain, it is almost the same as Permissioned blockchain with a private and public blockchains features. The different between the two is that multiple organizational members work together on a decentralized network. Although it is a private blockchain that have some limited access to a certain group, reducing the risks that come with just one organization controlling the network of a private blockchain. In this type of blockchain is the preset nodes that controlled the consensus.

What are the benefits of blockchain?

Greater Trust
Blockchain has an immutable transaction system that can never be tempered with which gives users confident when transacting with one another.As a user who transact with different users on a network, you have the assurance that what you are receiving is accurate wiith the trust that your data is highly save, because your records that is share can only be access with the members that you gave access to.

Immutable
Records that are kept on a blockchain cannot be changed or easily tempered with for example since the existence of Bitcoin it has never been hacked. Each new block has it own unique cryptographic key that is resulting from the previous block data.

Lower Cost
Blockchain helps to eliminate transaction fees, unlike the traditional system that you have to pay high fees to third parties like bank to process your transactions.

Transparent
Blockchain is and open source software that give everyone equal right to access and view transactions. Blockchain also can be use to build and code new applications and seek for improvement to the code.

More Efficient
With blockchain, that comes with distributed ledger that is shared among users of a network,time wasting record are minimize or eliminated. Blockchain also make transactions to be very fast and secure.

Stronger security
Since blockchain involves the use of consensus when dealing with data from its users it make the network more secure for hackers to hack in. Also with the tight security transaction can not be changed once it is recorded into the database.

3. Explain Blockchain Distributed ledger.

Blockchain distributed ledger is simply a technology that maintain the database that is available at different geographical location for several users. There are several nodes in the network, if there is any change or addition in the data all the nodes will be synchronized into a real time. A distributed ledger is a consensus of copy, shared, and synchronized virtually data that is spread geographically across different organization. Unlike that of centralized database, that has no central administrator. The main aim of distributed ledger is the lack of central authority.

Properties of Blockchain Distributed Ledger
I'm going to only discuss some of the properties of a blockchain distributed ledger.

Security using cryptographic function
Data in the the distributed ledger are protected using the hash function. This is because original data cannot generate block that is from the hash value every data in the ledger are very safe at all time.

*Immutability
Data cannot be changed once it is stored in a distributed ledger, the data cannot be manipulated by the administrator or anyone once it's saved.

Distribution
With distributed ledger each node is subjected to it's copy of the ledger. Once new block is being validated, a copy of the block will be sent to other nodes that are connected to the Block network.

4. What Is Blockchain Double Spending and how Bitcoin handles this problem?

Blockchain Double Spending is a situation whereby one specific coin is being use to perform more than one transactions in the blockchain. Double spending, practically occurred, of a person is to send $10 worth of cryptocurrency and he then went and send $15 such situations is regarded as double spending. In our daily transaction will also experience double spending, like in my case. There was a day I was trying to send my friend money using USSD code at first when I perform the transaction due to the network error it didn't receive debit alert, of which I was thinking the transaction wasn't successful, I did it again at the end of the day, I then discovered that I have sent the money double.

In a blockchain, when such a thing happened it means the blockchain has been hacked or both the sender and the receiver are trying to defraud one another. This occurs when the details of the transaction is rebrocasted into the blockchain, due to the fact that the person committing the crime hold more than 51% validation power,he will want the transaction to be validated even when the person know that the transaction is fake.

There are several types of blockchain double spending, which I have discussed below;

Finney Attack
This is the type of attack that occurs in a blockchain when a miner create a false transaction that can't be traced simply because the miner obtained other block information. Finney attack can become successful if the receiver accept the transaction unknowingly.

Vector 76 Attack
This is the type of double spending that occurs when hackers produces and send cryptocurrencies that is fake as payment to another users. Hackers always look for possible means to defraud users by using software that can formulate figures.

Race Attack
This is the type of attack that occurs when a person is confident enough in carrying out various transaction using the amount of crypto that he has used before to issue out as a means of confirmation.

How Bitcoin handles Blockchain Double Spending
Bitcoin handles the issues of blockchain double spending by making use of distributed ledger technology in confirming the transactions of miners. Once transaction hasn't been confirmed by validators it will not be included into the block. Receiver can only receive the payment once the transaction has been verified, and confirmed it will be added to the blockchains distributed ledger.

If the three types of double spending attack is been hack by hackers, what the blockchain will delete the unconfirmed transaction from the blockchain allowing the confirmed transaction to be sent to the receiver.

5.Practical + Theory, Visit Blockchain Demo and check section Blockchain, then explain in detail how Blocks Hashes Work in Blockchain, what will happen when any middle of the block gets changed, try to give screenshot for each possible details.

Details of the block hash section In the blockchain

In other for me to explain this,I visit the Blockchain Demo

Hash

As I checked the Hash section,I noticed that there is a SHA256 Hash generator

Hash

In the hash section any input will generate a hash value and anytime the input is change a new hash is generated. Two different input cannot generate the same hash value.

Block

As I checked the block the Block section, I noticed that there are Block no, Nonce, Data and Hash in it.

Block

Block no starts from 1, the Nonce value is to validate the block. The hash value of block begins with 0000 and changes with data input.

Block

Right now, you see that from the screenshot above I have not enter any data yet I'm the section, once I enter any data, the data hash will be changed and the block will become red which means an invalid block.

The function of Nonce, in the validation of block is basically to find out the value that are correct for any data that is input. To find Nonce is usually time consuming when finding the correct value. Below is the new Nonce that I find having a value of 29636 with a Hash value of : 000020a454dfc2c57278d99d4f7f2cc6fd644e4d276ea18974f2ee737c480589

Blockchain

As I checked the blockchain section, I saw more than one block and each of the block has Block no, Nonce, Data, Prev block's hash and Block hash.

Block no: the block no start from 1
There is a Nonce value
by default, there is no data in the blocks.
Prev block hash: the Pre block hash is 0000000 as it is the first block and it is known as the genesis block.
Hash value: the hash value starts with 0000 which means the block is valid.

Blockchain

As I checked the next block no I didn't see Nonce value, no data by default and in the previous block hash the hash block no 1 starts with 0000 which means valid block.

As I change the data input the block no 1 become red.

In other to validate the block that I change the data input it will required re-mine, and if I mine it the Nonce value will be changed and a valid hash which starts from.0000 will be generated.

The hash for block no 1 is the same with the Prev for block no 2.

Blockchain

After checking the Blockchain Demo I discovered that no data of any block can be tempered and if any change in data occurs the whole blockchain will be distracted and all blocks will be re mine, this means the blockchain is very secure.

6. What Is Race Attack in blockchain? OR What Is Finney Attack in blockchain? OR What Is Vector76 Attack in blockchain?

Finney hack
Finney hack is the type of hack that occur when a person accepts a transaction that hasn't been confirmed on the network. This usually happens when a miner generate a block, using a transaction address that has already been verified to send to the receiver. The hacker do make a payment using the same currencies,sender from one address to another which is own by another users. Once the receiver accepts the transaction without conforming the transaction for the blockchain network the hacker will release the block where his previous transaction is showing. Although Finney attack isn't easy to execute because the attackers most be a miner who is capable of extracting the block for his transaction to be validated.

Limitations/disadvantages of Blockchain.

Data modification
One disadvantages of blockchain is how data cannot be changed when it has been stored. In blockchain once data is added to the blockchain it cannot be changed. Modifying blockchain data requires time and sometimes lead to a hard fork.

51% Attacks
Attacks can occur once organization control more than 50% of the network hashing power, which can easily allow hackers to disturb the network by modifying the ordering transaction on either knowingly or unknowingly.

Highly Maintenance
Blockchain requires a high consumption when mining is going on. So of the cryptocurrency like Bitcoin requires high electricity power before their can be mine.

Acceptability
Government, businesses and the society are still finding it difficult to accept the use of blockchain, because it's unregulated. Government are saying it used for fraudulent transaction as transaction can't be traced.

8. Conclusion

Blockchain are decentralized data based that are build to works as a distributed ledger where no one will have the power to impose laws on another. Still there are some limitations,in the blockchain technology when compared to centralized database which are making the societies to see blockchain as something that is very bad. I sincerely believe that governments and businesses will find a means to adopt blockchain.

Thank you for your time here......

Best Regards;

@stream4u