1. BARTS Blockchain ART Simulation
The purpose of this exercise is to illustrate how blockchain concepts can be illustrated using an imaginary digital currency called Barts, to buy and sell drawings.
Welcome ladies and gentlemen. My name is Sean Sanders.
Today I want to talk to you about a blockchain art simulation that will be demonstrating how blockchain works.

2. Topics of Discusison Introduction: What is a blockchain?
Where blockchain is used
What is the difference between cryptocurrency and Fiat
What is Mining and Hashing?
BARTS Exercise
Summary

3. Blockchain Introduction
Satoshi Nakamoto developed the digital currency Bitcoin
Blockchain serves as the public ledger. It is managed autonomously through the use of a peer-to-peer network of miners, along with a timestamp server.
The miners assist in validating Bitcoin transactions between two parties that are to be added to the blockchain.
The miners get paid for validating transaction from fees, and by receiving newly created Bitcoins
Satoshi Nakamoto was the initital developer behind Bitcoin. No one knows who Satoshi Nakamoto is.
Blockchain is a technology in which the blockchain is managed autonomously. The blockchain utilizes a peer to peer network of miners.
Miners are the key behind allowing transactions to be added to the blockchain. Each transaction requires a fee to be paid to the miners for their work.

4. Where the blockchain is used?
Stores
Supply Chain
Healthcare
Government
Financial Institutions
Automated Governance
The original first transaction made in the first ever created blockchain was to buy pizza. This was probably one of the most expensive pizzas ever bought.
The blockchain can be used in Stores to allow people to buy goods by using Bitcoin or some other cryptocurrency.
In supply chain you could pay for transportation or for rides on your local transportation system.
In healthcare you could track patient information such as Dubai who is utilizing the blockchain for their healthcare system.
ETC…

5. Benefits of blockchain
Eliminates the middle person or third party.
Solves the double spending issue.
Creates an immutable ledger that cannot be modified.
Here is the key benefits behind blockchain.
Eliminates the middle person or third party.
Solves the double spending issue.
Creates an immutable ledger that cannot be modified.

6. You might be wondering what the difference is between a cryptocurrency and Fiat?
For example, a cryptocurrency is created by computers where a Fiat is issued by government.
Another example is that cryptocurrency is presented by public and private pieces of code where Fiat is in the form of coins or paper money.

7. Hashing & Mining
Hashing algorithms are used to verify digital currency transactions and then to add them to the distributed blockchain ledger. This process of validation is applicable to a variety of applications, not just cryptocurrency applications.
Tremendous computational and energy demands of mining are reducing the opportunity for success.
The decrease in mining success for new entrants is related to the presence of large mining companies and consortia with deep pockets.
A mining pool is a group of miners that join forces to combine computing power for monetary gain. Large mining pools increase the chance for successful hashing.
Hashing and mining are important to understand in relation to the blockchain.
Hashing algorithms are utilized in order to verify the digital currency transactions and allows them to be distributed to the ledger.
You might ask why hashing is used? It is used as a mechanism that allows for a digital signature and provides authenticity. In addition, it reduces malicious behavior.

8. Mining Process Here is a quick example of the mining process.
We have a transaction pool queue. One transaction at a time is then broadcast to the miner.
The miner checks to see if the sender has enough Bitcoins in their wallet which is stored as part of the block chain ledger.
If the sender has enough Bitcoins in their wallet the miner then assembles the valid bitcoin transaction into a block.
The miner then searches for a hash that has the right number of leading zeros.
Next, the miner broadcasts to all other miners the transaction information and the correct nonce it found.
The miners then check this and if validated add the transaction to the block.

9. Simple Hashing Example: http://104.156.254.129/SimpleHash.php
Here is a quick example of how mining would work.
Added a 5 to the end of the sentence to get a SHA256 hash with leading zeros.

10. BARTS Players Coordinator or instructor 3 Artists 3 Gallery Owners
3 Mining Pools with at least two miners in each pool. One of the miners will be the spokesperson for the mining pool.
Barts players.
Coordinator or instructor
3 Artists
3 Gallery Owners
3 Mining Pools with at least two miners in each pool. One of the miners will be the spokesperson for the mining pool.

11. Art Buyer Names Artists Names Miner Names
We like to use the same names for the simulations but you can use any names. This exercise can be adapted to any class size by adding more people to each mining pool or reducing the number of mining pools. Artists and buyers can also be added.
Art Buyer Names
Flipflop
Krystal
Bobo
Artists Names
DrawGud
Crafty
Charkole
Miner Names
Placer Kings
Gold Gulch
Spider Miners
Dig It Fast
Royal Placer
Barts Miner
Hash Crash
Fire Ants

12. Artists use this sheet to draw
Artists use this sheet to draw. The Gallery owners enter Sender name, amount and receiver. The instructor enters the time stamp, hash, nonce and miner that found the hash.

13. Here is what the ledger would look like for the BARTS blockchain simulation.

14. BARTS Simulation Process
Sellers or Artists: Drawgud, Crafty and Charkole
Draw a picture in two minutes on BARTS transaction paper.
Sell it to a buyer
Buyers or Sellers: Flipflop, Krystal and Bobo
Bid on pictures from 1-5 BARTS
Once you get the bid, you enter your name, artists name and transaction amount on the BARTS transaction paper. You put in in your wallet and hand it to the instructor.

15. BARTS Simulation Process Contd…
Instructor: Is like the core blockchain coordinating software
Announces the transaction to everyone in the room. I.e. Krystal 5 Charkole
Mining Pools: Placer Kings, Gold Gulch and Spider Miners, etc.
Each member of mining pool will use the BART Mining Program at
Start the nonce at 1 and keeps incrementing until there is a leading zero on SHA hash.
Yells “Eureka” when a leading zero is found.
Instructor
Asks the individual that yelled eureka what nonce value generated the leading zero.
Instructor announces the nonce value to the miners.
If three or more mining pools can generate a hash with the same leading zero, then the transaction is added to the blockchain.

16. Lets begin the simulation
Who wants to draw?
Who wants to buy the drawings?
The remaining individuals are miners.
(Use this link for mining)

17. Debriefing What did you find interesting about the process?
What did you like about the simulation?
What would you like to see differently?
Lets look at some of the differences.

18. This is a simulation: Many similarities and several differences.
We use names such as Drawgud, Crafty instead of a 160 bit hashed public key as the Bitcoin destination address.
We do not use a private key, which is like a password, to make sure that the sender is a valid owner of BARTS tokens.
A timestamp and other information is usually hashed along with the buyer, seller and amount.

19. This is a simulation: Many similarities and several differences. Contd…
Bitcoin blocks usually contains 1,000 to 3,000 transactions.
Miners also receive transaction fees for Bitcoin.
The instructor is a centralized validator of the transactions and the participants. Digital currencies use many nodes in a peer-to-peer network to verify transactions.
If this systems was perfect, we would probably sell it and have an initial coin offering (Not!).
The only people that really understand blockchain are the core developers/programmers. But here is an additional overview: Down in the Weeds. Mining and the Bitcoin Network: (Explain Like I’m 5)

20. Summary
Mining is made more difficult by adding more zeros to the front of the hash. We developed a simulation for this discussion at:
Bitcoin now demands 17 zeroes on the front of the hash. This would take on average 16^17 attempts to find a hash with 17 leading zeros.
By adding more miners to the mining pool you can decrease mining time. Just let each person in the pool start at a different number to start the nonce.

21. Mining Process Simplified
Sally
Sally
Miner Bob
Miner Bob
Gets Bitcoin wallet from friend with 2 Bitcoins in wallet
Sends 1.5 Bitcoins to Bill with transaction fee of .05 Bitcoins
After verifying Sally’s Bitcoins, consolidates transactions into a block
Finds a SHA256 hash for entire block with 17 leading zeroes
Bill
Bill gets 1.5 Bitcoins and sees them in his wallet
Miner Bob
Miners
Bitcoin Software
Sally
Sally now has 1.55 fewer bitcoins in her wallet
Broadcasts to miners he found a SHA256 hash with 17 leading zeroes
Miners verify Bob’s claim that he has found SHA256 hash
Validated block is added to blockchain
Miner Bob
Gets 12.5 Bitcoins for mining block + transaction fees
Mining Process Simplified

22. Hash Program for each miner at http://104.156.254.129/SimpleHash2.php

23. Ledger Program for mining pools: http://104. 156. 254. 129/JqueryBlock
Ledger Program for mining pools: You do not need to enter entire hash, just a few values.

24. Instructor's Directions
The buyers and seller bring up the Bart transaction sheet to the instructor. The instructor then checks the master ledger sheet to determine if any the buyer has enough money in their account to pay the gallery owner.
If there is enough Barts to pay for the drawing. If there is enough money then the transactions is broadcast to all of the mining pools.
The first mining pool that finds a hash with a leading zero then announces they have found it and announce the nonce that was used. That nonce is broadcast to all of the mining pools. If at least one other mining pool finds hash then it is a go.
The ledger on the next page is updated along with the ledgers for each mining pool.
Bob’s Gallery sends 2 Barts to DrawGud.
The mining pool that finds the hash first gets 10 Barts. This taken away from core system and this is the way that new currency is created.
See the next page and show it to the students after updating.

25. Overview: Blockchain Art Simulation Directions
You need 3 art gallery owners that want to have someone draw simple landscape sketches They will pay for the sketches in Barts. They will negotiate with artists.
You need 3 artists to draw very simple pictures with a pencil for art gallery’s. They will negotiate with the buyers on the cost for 1 minute. They will get 3 minutes to draw the diagram on the Barts transaction paper.
After the Barts transaction paper is completed and all of the sections are filled in, the mining process should be started.
The Barts transaction should be given to the instructor. They will then tell each mining pool to validate the Barts transaction by announcing how many Barts will be transferred from the gallery owner to the artist.
Each mining pool will then try find a hash with a leading zero by adding a number, called a nonce, to the transaction until with a hash with a leading zero is generated.
The mining pool that gets a hash with one leading zero will raise their hand and say Bravo. The head of the mining poll will announce to everyone that they have found a hasnonce that generates a hash with a leading zero.
All of the mining pools wil then valaidate that the nonce generates a hash of the transaction with a leading zero.
Once it is validated, all of the minors will enter submit and the trnasactions will be added to the ledger.
Keep this process going until all three of the transactions between artists and galleries are completed

26. The next Slides are just additional information

27. Blockchain The blockchain serves as the public ledger.
Bitcoin blockchain ledger database size is GB
The blockchain database is managed autonomously through the use of a peer-to-peer network, along with a timestamp server.
Solves double spending issue.
See
Briefly discuss here the history of blockchain.

28. Blockchain basics
The ledger is distributed across the network to others on the network.
The ledger is also distributed to those who mine, they are called miners.
Goal of blockchain technology is to eliminate third parties and to provide an immutable ledger.
Discuss what is blockchain.

29. Why people care about an immutable ledger
Denotes something which can never be modified or changed.
An immutable ledger is a global log of transactions, created by a consensus between the chain's participants.
Once a blockchain transaction receives a sufficient level of validation, cryptography ensures that it can never be replaced or reversed.

31. Nonce
Definition (American Heritage Dictionary): A word coined and used for a single or particular occasion.
I thought I invented a unique nonce to describe people full of beer.
“He was gambrious from drinking that stout ale.”
But gambrious is actually a word
Definition (cryptography): An arbitrary number used just once.

32. Nonce from a Crypto Perspective
“(Number ONCE) An arbitrary number that is generated to provide a unique identification or for security purposes such as when logging in to a network (see initialization vector). The nonce is used only once and not repeated.
Although random and pseudo-random numbers theoretically produce unique numbers, there is the possibility that the same number can be generated more than once. However, if a very large, true random number is used, the chances are extremely small. A perfect nonce is the time of day; for example, seconds past 5:13pm on 1/18/2012 can only occur once.”
Read more at

33. How the Nonce is Used in Mining
The nonce is used in the construction of a SHA256 hash. This algorithm was developed by NSA.
A cryptographic hash is derived from a mathematical operation on text. It is used to make sure that the text has not been altered in any way.
In Bitcoin mining the SHA256 hash is generated by adding a nonce or unique value to the end of the text that is being hashed.
The goal is to generate a SHA256 hash that starts with zeros.
The nonce is the random number that is added to the end of the text being hashed until the desired number of leading zeros are generated.
This adding of a random number, or nonce, to generate a hash with leading zeros is what mining is all about.

34. More Details on Hashing
A hash is used to verify that data has not been changed. A hash function is used to map data back to a specific set of data of a predetermined size. If you want to check if any value in a stream of characters has changed, you can check the hash value. A verified hash value indicates that the original data remains untouched. If the hash value does not match the hash value from the original data, then data has been altered or tampered with in some way. This is in part how the double spending problem is countered, and man-in-the-middle attacks are mitigated. It should be noted that checksum computation has some similarities, but checksums are different because they are not unique, whereas the SHA values are essentially unique. And hash collisions do occur, but they are rare with recent implementations of hash algorithms

35. V. What are some uses for blockchain?
Healthcare: can be used to track patient information and share it both easily and securely.
Industry/Business: can help keep track of inventory, useful for trading information, and exchanging currency with other businesses.
Computer security: can be used to keep track of assets or to share password information more securely than plain text via .

36. The Future of Blockchain
The future of blockchain technology is hard to predict because of how new it is; its full potential is still unknown.
We can expect future blockchain to be much utilized in more business sectors and career fields.
It is likely that blockchain will be implemented in much the same way, but with less vulnerabilities and greater file sharing capabilities.

37. Final thoughts
Blockchain is a very useful technology and it has potential to eradicate the double spending problem.
Blockchain is versatile in that it can be used publicly, privately, or in a consortium, but the security of this technology is a valid concern to some.
Blockchain should only be used privately when you want:
More security
To rapidly share information
Want to keep track of information
Blockchain is efficient and cost effective technology.

38. How much money can miners make?
Miners get paid 12.5 Bitcoins for mining a block.
Miners also get paid a transaction fee for every Bitcoin transaction.
Each block is about 1 megabytes long.
Each block has about 2,000 transactions 11/18/2017.
Mining about 6 blocks/hour
Rewards per block ~ $114,000 11/18/2017