Crypto Academy / Season 3 / Week 6 - Homework Post for @stream4u - Blockchain

Hello guys, before I proceed with my work I will like to thank @stream4u for this great lectures on blockchain.

1)What Is blockchain and what are the types of blockchain.

Blockchain is a system that contains blocks, that are connected to each other and also stores information or data and are kept safely. A data that is stored in a blockchain cannot be hacked by anybody. In blockchains the blocks in it stores data of transactions and are connected with other blocks that are legit and that form together to form the blockchain.

One could also say blockchain is a digital network that keeps data in forms of blocks and that keeps data or information safely and are sent around nodes of blockchain.
The nodes that are connected to the blockchain are scattered all over the world. When a transaction is made within a blockchain by Using Distributed Ledger Technology the transaction the transaction is sent to all the nodes connected to the blockchain.

Miners are one of the component of the blockchain. Miners are a group of people that takes the validation of new blocks into their own hand. these group pf people make sure that the blocks are not hacked. It involves the use of high amount energy because of the equipment used in the validation process.

Types Of Blockchain

There are 4 types of blockchains, which are;

• Public Blockchains
• Private Blockchains
• Hybrid Blockchains

PUBLIC BLOCKCHAIN

This a type of blockchain that can be access once the user has an internet connection and it has no restriction on user entry.
In public blockchain transactions are encrypted and stored on the blockchain after it has been validated by the user.
Also public blockchain uses Distributed Ledger Technology to distribute information among the nodes which provides transparency.
Some examples of public blockchains are Bitcoin and Ethereum networks.

ADVANTAGES OF PUBLIC BLOCKCHAIN

• It is easy to access it because the only thing you need to access it is an internet connection.
• It is transparent because every user has access to the blockchain ledger.
• There are no intermediaries in public blockchain because it is decentralized.

DISADVANTAGES

• Transaction is slow.
• High energy consumption.

Private Blockchains

Private blockchains are controlled by an organization unlike public blockchains that are not controlled by any organization or individual. Permission is needed from the governing body before anyone can be allowed to access data on the network. Hyper- Ledger Fabrics is an example of private blockchain.

ADVANTAGES

• It is faster than public blockchains as a result of limited participant.
• It is managed properly unlike the public blockchain because it is centralized.
• It is safer since it is not open for everyone.

DISADVANTAGES
*Lack of transparency. Private blockchain is not transparent as compared to the public blockchain.

Hybrid Blockchains

Hybrid blockchain combines the features of both public and private blockchain. It is transparent even though it can't be access by everyone.

ADVANTAGES

*Transactions in hybrid blockchain are very fast.

• Cost of transactions are very cheap in hybrid blockchain.

DISADVANTAGES

• It is not decentralize.
• It is not transparent.

2) What are the benefits of blockchain?

Blockchains has many benefits such as;

• Transparency: Users are able see information concerning their transaction since all transactions are recorded and distributed in multiple places.

• High Security: Blockchains cannot be hacked because of the use of hash and several servers. Information or data is stored across network of computers.

• Traceability: One can easily trace his or her transactions because of the transparency in blockchain. transaction addresses can be seen by anybody on the blockchain which makes it very easy to trace.

• Decentralization: Blockchains are not controlled by the government or any organization there for it does not involve any intermediaries before one can do any transaction on the network. The nodes works independently they do not take any order from a central server.

• Immutability: Data or information that has been stored on blockchain can not be changed or remove because of the use of hash technology to store data. As a result of this hackers it very difficult to hack data on the blockchain.

3)Explain Blockchain Distributed ledger.

Distributed Ledger is the distribution of a data of a transactions that are recorded in blocks which are all connected nodes that are been authorized in the blockchain. Blockchain records transaction details among participants in a network. The distributed ledger distinguish the difference between centralized and decentralized system. In every transaction being made, every node is updated with the transaction details being stored and recorded permanently.

Blockchain Distributed Ledger also ensures that the distribution of updated details of the network, transactions performed and data are stored on blocks.

Properties of the Blockchain Distributed Ledger.

Below are some few properties Blockchain Distributed Ledger;

• Immutability: The blockchain distributed ledger ensure that data or information can not be change or be removed. It is very rigid.

• Anonymity : It help to keep the identity of users and nodes anonymous to ensure the safety of the participants.

• Programmable : The distributed ledger can be programmed.

• Transparency : It is very transparent because every user or participant that has access to the blockchain distributed ledger can be able to view his or her transaction history.

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

Blockchain Double Spending is when a cryptocurrency is used for more than one transaction or when a digital currency is used more than once. Double spending usually happens when the blockchain is attacked by hackers in the process of making a transaction. Hackers intentionally broadcast many packets onto the network and then reverse them to make it look like the transactions never happened to aid their double spending.

Below are some types of double spending ;

• Vector76: This is a type of double spending where hackers generates fake crypto assets which is then use for payment in the blockchain.

• Race Attack: This is where hackers makes two transactions and sends them to the blockchain for approval. So when the receiver accepts the transaction without confirming the transaction it will result to a race attack.

• Finney Attacks: It happens when the receiver accepts approves an unconfirmed transaction. Finney Attack usually happens when a transaction is pre-mind in a block whiles another transaction is initiated before the release of the first transaction.

How Bitcoin Handles Double Spending Problem?

Bitcoin handles double spending by the help blockchain. It has some confirmation process one must go through before you can be able to finish your transaction. If a person has 5 BTC and want to do double spending with it after making transaction with all the 5 BTC . And the person try again to do transaction with the same 5 BTC again by singing and making different transaction again both of the transactions will go to unconfirm transactions. So when the transaction is confirmed by the receiver before it becomes valid but if it is not confirmed that particular transaction wont be valid.

* 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.

I used a blockchain Demo account for my explanation.

From the image above one could see that the Prev in Block 1 is 000000000000.. and the Harsh is Block 1 is unique. And also one could see that the Prev in block 2 is is the same as the Hash in Block 1 whiles its Harsh is different from the Hash in Block 1. This implies that Hash 2 noticed Hash 1.

One can see that the Prev of Block 3 is the Hash of Block 2 and also the Prev of Block 4 is the Hash of of Block 3. This will keep on repeating if we should continue.

ADDITION OF DATA

After in putting marwone in the first image above one could see that the Hash of all the block changed. And also after inputting mar in the second image you can see that it is different from the one I inputted marwone. And also the colour of the blockchain changed after inputting my data.

CLICKING Mine

After clicking on mine the background colour of Block 1 changed and the rest remained red and new Hash was generated in Block 1. The rest of the Block will remain red until you mine all.

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

Race Attack in Blockchain

Race Attack is a type of blockchain double spending.
In race Attack hackers uses the same amount of crypto assets to carry out multiple transactions. Because transactions take a bit long before it is validated or confirmed so hackers try to take advantage of it sending the same amount of cryptocurrencies to more than one user at the same time. Example of race attack is when a hacker sends the same crypto assets to more than one person. If an attacker is having 2 BTC and sent it to person A and then Send the same 2 BTC to person B both transactions will go to unconfirmed transaction so assuming both A and B don’t wait for confirmation before sending the money the hacker will cancel one of the transaction leaving only one. Which will result to race attack.

Question 7: Limitations/disadvantages of Blockchain.
Below are some few disadvantages of blockchain,

• Maintenance
• Scalability
• High energy consumption
• Immutability

*Maintenance : One of the major advantages of blockchain is maintenance because the blockchain chain do not provide maintenance for it users wallet but rather is the responsibility of every user to maintain his or her own wallet. As a result of this some users lose their account especially new users.

• Scalability : It is not scalable unlike the centralized system. The blockchain begins to slow down when the users on the blockchain increases.

• High Energy consumption : It consume a lot of energy because bitcoin which is the popular blockchain uses proof of work algorithm to mine. This also causes environmental pollution.

• Immutability : Even though it immutability has it's own advantage it also has it disadvantages because when one makes a mistake in his or her transaction it can not be changed.

CONCLUTION

Even though blockchain has it disadvantages but blockchain really help it users since it is very transparent and every user is responsible for taking his or her own decision. The use of blockchain has been increasing almost everyday. I would like to thanks our able professor once again for this wonderful lectures.

Thanks for your time.