1. So what is Blockchain anyway?
Karl Schwirz – Consultant Slalom Boston | slalomtechboston.com

2. We’ve been hearing a lot about Blockchain

3. Bitcoin is the currency of choice for the dark web
Early 2010’s – present
I’m probably on a list now – so – your welcome for doing this research.
Some interesting buys on the dark web
- Credit Card Numbers / SSNs
- Passports
- Drugs
- Stolen Netflix accounts
- Fake College degrees
- Coupons
- Ricin – Walter White special
- Pocket EMP
- Jet
- Hitman
- Uranium

5. What is Blockchain?
Simply put, blockchain is a distributed ledger or a decentralized database that is continually updating it’s digital ledger

6. Traditional transaction exchange
Person A give money to person B

7. Centralized Banking Model
Person A give money to person B via their bank

8. The potential problem with a centralized ledger?
While a centralized database can be secure, as most banks are, it is possible to be hacked or someone with appropriate access can go ‘rogue’ and decimate the credibility database.

9. Possible solution to a centralized ledger?

10. A decentralized ledger

11. The Block s Header Timestamp Previous Hash Merkle Root Hash Nonce
Body
Transactions
Merkle Root Hash
Difficulty

12. The Block Header Timestamp Previous Hash Merkle Root Hash Nonce
Body
Transactions
Merkle Root Hash
Difficulty
Data
Transactions that are included in the block
Can be one transaction or many transactions
Miners can choose transactions by the transaction fees associated with them
Worth noting this data doesn’t have to be in clear text. It can be encrypted so things like account numbers or names are protected.

13. The Block Previous Hash
The previous block’s hash value is what connects each block on the chain together in sequence.
Because it is included in the hashing of each new block you can quickly verify if the chain has been tampered with.
Header
Timestamp
Previous Hash
Nonce
Body
Transactions
Merkle Root Hash
Difficulty

14. The Block Hash function Hash function Hash function Tx Tx Tx Tx
Merkle Root Hash
Header
Timestamp
Previous Hash
Nonce
Body
Transactions
Merkle Root
Merkle Root Hash
Difficulty
Hash function
Hash
Hash
Hash function
Hash
Hash
Hash
Hash
Hash function Tx Tx Tx Tx

15. The Block – Block Hash Header Timestamp Previous Hash Merkle Root Hash
Nonce
Body
Transactions
Block Hash
Merkle Root Hash
Difficulty
SHA-256 Hash function

16. The Block – Block Hash Header Timestamp Previous Hash Nonce Body
Transactions
Difficulty
The Blockchain has a target that is set for the hash value.
The 256-bit number is the threshold for the result of the hash. Meaning the output of this number must fall below the target hash.
Example: Block Hash c7cf1966f48824c0bc4ee88d3cc b2307cfaaed078273
Merkle Root Hash
Difficulty
The larger the target, the more difficult the solution will be to find.
Exmaple: Leading 18 characters must be 0’s

17. The Block – Block Hash Header Timestamp Previous Hash Merkle Root Hash
Nonce
Body
Transactions
Merkle Root Hash
Difficulty
Nonce
32-bit number that is used in conjunction with block header values to generate hash
Values can be between 0 and 2^31
Only number that is flexible
Values anywhere between 0 and 2,147,483,647
Nonce: Coined for or used on one occasion

18. The Block – Mining the block
Header
Timestamp
Previous Hash
Nonce
Body
Transactions
Mining
The correct value for the nonce must be done by completing the hash and checking the output for a valid value
Running a hash algorithm is a complex mathematic equation require a lot of compute processing power
When the nonce answer is found it is submitted to the rest of the nodes for validation
A correct answer submission is called the Proof of Work
Merkle Root Hash
Difficulty
- Mining used to be done by desktop computers with high CPU and GPU limits. That’s no longer feasible and specialized mining cards can be purchased for hashing optimization
Cloud options are available as well. (Save a lot on electricity and ventilation)
Lease a mining machine
Provision your own machine and install / develop mining software
Least hashing power. (Pay for someone’s rig and share in the profits)
Proof of Stake – Miners are selected in a deterministic fashion based on their wealth (or stake). When the block is solved, their reward are the network fees. A lot cheaper and energy efficient.

19. And answer a question you might be asking yourself
Tie it all together
And answer a question you might be asking yourself
Reward

20. Majority Rules
In a contested result situation, 51% of the common answer is the authority.
In order to take control of a block chain, you might as well put your resourcing into mining blocks legitimately and collect the mining rewards
It is incredibly hard to corrupt or fool the Blockchain, one would need to rehash and mine all blocks with more compute power than everyone in the network combined in order to achieve 51% controlling authority.

21. Smart Contracts
Instead of just processing currency transactions, code is executed on the participating nodes of the Blockchain.
The code defines conditions of a contract that once met, trigger an action.
Use shipping company example:

22. Azure’s Blockchain as a Service
Ethereum Blockchain Network