Get introduced to blockchains, how Bitcoin (the most secure blockchain) works, and discover what new types of applications and services are enabled by blockchains. Explore what is a Bitcoin miner, what is a 51% attack, how to sign transactions, what are unspent outputs. Further, learn about limitations of blockchains (limited storage, slow write times) and solutions to these limitations. Muneeb Ali, Blockstack Labs

1. Blockchains 101
Muneeb Ali

2. Outline
— Overview of blockchains
— How blockchains work
— What are the challenges with blockchains
— How to build apps with blockchains

3. Background

4. The Early Days of Bitcoin

5. How Blockchains Work
Let’s design a new currency…

6. How Blockchains Work
Let’s design a new currency…
Muneeb Ali 10 coins
Brian Kernighan 10 coins

7. How Blockchains Work
Let’s design a new currency…
Muneeb Ali 10 coins
Brian Kernighan 10 coins
Paul Krugman 0 coins

8. How Blockchains Work
Let’s design a new currency…
Muneeb Ali 10 coins
Brian Kernighan 10 coins
Paul Krugman 0 coins
Muneeb —> Krugman 2 coins
(unconfirmed)

9. How Blockchains Work
Let’s design a new currency…
Muneeb Ali 8 coins
Brian Kernighan 10 coins
Paul Krugman 2 coins
Muneeb —> Krugman 2 coins
(confirmed)

10. How Blockchains Work
Congratulations!
You just learned how blockchains work.

11. How Blockchains Work
Muneeb Ali 8 coins
Brian Kernighan 10 coins
Paul Krugman 2 coins
Muneeb —> Krugman 2 coins
(confirmed)
Bill Gates 0 coins

12. How Blockchains Work
Muneeb Ali 8 coins
Brian Kernighan 10 coins
Paul Krugman 2 coins
Muneeb —> Krugman 2 coins
(confirmed)
Bill Gates 0 coins
Muneeb —> Bill 2 coins
(unconfirmed)

13. How Blockchains Work
We need a distributed ledger
(blockchain)

14. — It’s a file!
— Append-only global log
— Every node on the network has a consistent copy
Blockchain
How Blockchains Work

15. General Challenges with Blockchains:
— Storage limitations (blockchain bloat)
— Introducing new features (hard fork)— Introducing new features (hard fork)
— Slow writes
— Endless ledger problem

16. • Private-public key pairs
How Blockchains Work:

17. • Private-public key pairs
• Bitcoin address = deterministic from pubkey
How Blockchains Work:

18. • No such thing as a “bitcoin”. Only inputs and outputs
• 21 million total bitcoins (fixed)
• 50 BTC minted each block, halved to 25 BTC
How Blockchains Work:

19. How Blockchains Work:

20. How Blockchains Work:

21. 000009ff7ff1fc53b92dc18148a1d65dfc2d4b1fa3d677284addd200126d9069
How Blockchains Work:

22. 1 2 3
…..
3000
Register hash(name) Update name
How Blockchains Work:

23. Building Apps with Blockchains

26. Blockchain Application Stack

27. Blockchain
Naming
Identity
Authentication
Storage
App AppApp

28. Blockstack Network
bitcoin node (bitcoind)
blockstack server
bitcoind peer connection
rpc connection to bitcoind

30. Bitcoin
Global Naming (TLDs)
Ethereum Hyperledger
Blockchain
Driver
Blockchain
Driver
Blockchain
Driver
Multiple Blockchains:

31. Production Use

33. 300,000
200,000
100,000
Blockstack
byteswritten
— Largest non-financial production system on Bitcoin

34. Lessons from Production Use:
— Storage limitations (blockchain bloat) —> Unlimited data
— Introducing new features (hard fork)— Introducing new features (hard fork) —> Virtualchain
— Slow writes —> Get operations off blockchain path
— Security issues —> Need to use most secure blockchain
Details: Blockstack Paper, Proc. 2016 USENIX Annual Technical Conference

35. Blockstack CLI
Blockstack gives you fast, secure, and easy-to-use
DNS, PKI, identity management, and custom
namespaces on the blockchain

37. Namespaces:

38. Thank You!
Comments? Tweet them @muneeb
Web: http://blockstack.org
Code: github.com/blockstack