Blockchain Tutorial For Beginners - 2 | Blockchain Technology | Blockchain Tutorial | Simplilearn

Hey, thanks for coming
back to explain how
Blockchains work

No problem! Time to jog
your memory about
everything we discussed
the other day

You learnt about what a
Blockchain is

You learnt about Bitcoin
and how it works

About the features of
Blockchain

And finally…about how
you can implement
Blockchain in the
banking system

Now we’ll get a little deeper into Blockchain. Today we’ll talk about:
Adding 2 blocks at the same time
Soft Forks
Hard Forks
Forks
Other areas where Blockchain is used
The future of Blockchain
Blockchain Jobs
Use case:
The Candidate Block
Byzantine Fault Tolerance

Before a block can be mined,
a miner has to make an
important decision! Which
transactions would he add to
his block?

The Candidate Block
Before transactions are added to the Blockchain, they are collected in a temporary container
called a memory pool

The Candidate Block
The miners select transactions from this pool

The Candidate Block
The candidate block is a temporary block which a miner hopes to add to a Blockchain

The Candidate Block
The candidate block holds transactions that the
miner selects from the memory pool

The Candidate Block
The candidate block holds transactions that the
miner selects from the memory pool
The miner then tries to be the first person to find
the nonce value that satisfies the hash
requirements

I’ve been thinking…
If someone in a Blockchain wanted to
input the wrong data by spreading the
wrong information around…

Would he/ she be able to
get away with it?

Ah, that’s where
something known as
Byzantine Fault
Tolerance comes in…

To understand this, you
need to know what the
Byzantine Generals’
problem is…

Imagine a Byzantine
General and 3 other
lieutenants need to take
over this town…

However, they are at
different places, and
can’t directly
communicate with each
other

Lieutenant
Lieutenant
Lieutenant
General

The General has to
ensure that all
lieutenants follow the
same order he/ she
gives them: To attack
or retreat
This has to be
ensured, even if
one of the
lieutenants is a
traitor

This is the Byzantine
Generals’ problem

In this case, a traitor could
ruin the unity of the group
by sending different
messages to different
lieutenants

Here we can see that general is giving all his
lieutenants the command to attack. The traitor
could ruin this, by sending every other lieutenant
the command to retreat

In this situation, the traitor would make
the others believe that the General
asked them to retreat

This would cause the
lieutenants to retreat and
the General’s attack to
fail

The only way an attack or a
retreat will be successful, is
by having a majority
supporting that particular
action

To achieve this, the lieutenants
keep a tally of the orders they
receive. So in this scenario…

The General sends the
attack order to each of
his lieutenants

The lieutenants in turn
collect the order they
receive and pass it on to
the lieutenant near them

The traitor does this too, but
sends the retreat order to
the other lieutenants

However, this will not be
successful because…

Attack: 2 Retreat: 1

This shows that the majority of the
lieutenants would follow the
General’s command and the attack
will be successful

The scenario I
mentioned before, is
Byzantine Fault
Tolerant

The same situation can be encountered in Blockchain as well
The traitor would add
invalid transactions into the
Blockchain

The traitor would send inconsistent
information to other nodes in a
Blockchain
Blockchain

The traitor would send inconsistent
information to other nodes in a
Blockchain
This would effect the
reliability of the
Blockchain network
Blockchain

It is effective because:
The process of adding a block to a
Blockchain is a work-intensive
process which involves a hashing
algorithm
Blockchains are able to achieve Byzantine Fault Tolerance with the help of proof of work

The process is very hard
because it is heavily reliant on
values obtained from the
existing Blockchain
algorithm

The process is very hard
because it is heavily reliant on
values obtained from the
existing Blockchain
algorithm
To have any meaningful impact, the
hacker would have to take a lot of
time producing sufficient proof of
work

Interesting!
Okay, so imagine if you
and I were miners…

…and we both add a
block to the Blockchain at
the same time!

How do we handle such a
situation?

Although these don’t
happen very often, there
is a way to decide whose
block should be added to
the Blockchain

In an ideal scenario, you just need to be the
first one to find the hash value…

The hash value of the block only needs to be within the predetermined limit
Hash Value
Obtained
Miner 1 varies
nonce value
If less than target
If greater than target
Value accepted!
Value Denied!
Block is added to the
Blockchain
Block is not added to
the Blockchain

But in this case, two people have obtained a satisfactory hash value at the same time
Hash Value
Obtained
Miner 1 varies
nonce value
If less than target
Value accepted!
Value Denied!
Hash Value
Obtained
Miner 2 varies
nonce value
If less than target
Value accepted!
Value Denied!
Miner 1’s block is added to the
Blockchain
Miner 2’s block is added to the
Blockchain

50% of the network has accepted Miner 1’s block and the rest has accepted Miner 2’s

This half of the network
continues to work
considering Miner 1’s
block to be the right block

This half of the network
continues to work
considering Miner 1’s
block to be the right block
The other half of the
network continues to
work considering Miner
2’s block to be the right
block

The original Blockchain
The Blockchain with Miner 1’s
block
The Blockchain with Miner 2’s
block
However, only one miner’s
Blockchain can be allowed
to remain

This is achieved by selecting the sub-chain to which miners have first added a block
Miner 3 adds a new block to
Miner 1’s Blockchain

This is achieved by selecting the sub-chain to which miners have first added a block
It is then accepted as the dominant
Blockchain and is used by everyone in
the network
This is verified by everyone in
the network

The other version of the
Blockchain is completely
discarded

The other version of the
Blockchain is completely
discarded
The entire network
accepts Miner 1’s
Blockchain

This situation is also called an
accidental fork

So, I heard about a version of
Bitcoin called Bitcoin Cash…what’s
the difference between them?

There are other kinds too! Like
Bitcoin Gold and Bitcoin
Private! These are outcomes
of a ‘Fork’

Fork
A fork is said to have taken place when a Blockchain diverges into two potential paths
A fork happens when the users of a
network cannot come to an
agreement with regards to:
A network’s transaction details
New rules to validate transactions

Fork
A fork is said to have taken place when a Blockchain diverges into two potential paths
A fork happens when the users of a
network cannot come to an
agreement with regards to:
A network’s transaction details
New rules to validate transactions
Fork
Soft Fork
Hard Fork
There are two types of Forks:

Fork: Soft Fork
A soft fork occurs when a change in software protocol makes new blocks added to the
blockchain (following the new rules) backward compatible

Fork: Soft Fork
It also requires a majority of
the users to commit to that
change to be successful

Fork: Soft Fork
It also requires a majority of
the users to commit to that
change to be successful
Tighter rules Cosmetic
changes
Adding functions Not affecting the
structure
A soft fork could be used for:

Fork: Soft Fork
Consider the scenario, where the accepted block size is to be reduced from 1 MB to 100KB
It is approved by a majority
of the network

Fork: Soft Fork
of the network
Old version (approves blocks less than 1 MB)
New version (approves only blocks less than 100 KB)
1 MB

Fork: Soft Fork
of the network
1 MB
APPROVED!

Fork: Soft Fork
of the network
1 MB
REJECTED!

Fork: Soft Fork
of the network
<100KB
APPROVED!

Fork: Soft Fork
of the network
APPROVED!
<100KB

Over time, people following the older version of
the Blockchain would be forced to move to the
new one, since none of their transactions would
go through
Fork: Soft Fork

Now, let’s talk about Hard
Forks
Fork: Hard Fork

Fork: Hard Fork
A hard fork involves a change in software protocol so radical that it forces a new Blockchain
to be created

Fork: Hard Fork
to be created
Blockchain that hasn’t
upgraded
Blockchain that has
upgraded according to
software protocols

Fork: Hard Fork
to be created
Blockchain that hasn’t
upgraded
Blockchain that has
upgraded according to
software protocols
Both these Blockchains are considered valid and legitimate. The new path would follow new
updated rules, while the other one keeps following the old path

Fork: Hard Fork
Bitcoin performed a hard
fork on 1st August 2017,
which created Bitcoin Cash

Fork: Hard Fork
Bitcoin Cash was different from
regular Bitcoin because:
It increased the block size from 1
MB to 8 MB
Transaction costs were
significantly lesser than that of the
original

Other than with Bitcoin,
where else is Blockchain
used?

Preventing voter fraud

Blockchain helps in the following ways:
Ensuring there’s only
one vote per person

one vote per person
Ensuring that the data
is not being tampered
with

one vote per person
Ensuring that the data
is not being tampered
with
Creating an immutable
ledger to record the votes
as tallied

Quality assurance

Quality assurance
Ensuring the products are of highest
quality

Quality assurance
Ensuring the products are of highest
quality
Being able to identify problem
areas easily

So where do you think
Blockchain’s going to go in
the future?

Increased adoption among
organizations

organizations
As of now, only 1% of all organizations have
begun using Blockchain technologies. This
percentage is expected to increase in the next 5
years or so…

organizations
A need for Blockchain
regulations

organizations
regulations
The rules and regulations surrounding
Blockchain are not very clear for organizations
to be comfortable using it

organizations
regulations
Removing the negative
speculations surrounding
Blockchain

organizations
regulations
Blockchain
Several industries fear that Blockchain will
disrupt their normal functioning and believe that
the adoption of a Blockchain system isn’t worth
the effort

organizations
regulations
Blockchain
An increase in job
opportunities for skilled
personnel

organizations
regulations
Blockchain
An increase in job
opportunities for skilled
personnel
As the technology matures, there would be a
huge requirement for individuals who can
understand and implement the concepts of
Blockchain

What options do people
have for jobs involving
Blockchain at the moment?

Among the many job
opportunities, the two most
famous ones are Blockchain
architect and Blockchain
developer
Blockchain Jobs

Blockchain jobs
Blockchain Developer Blockchain Architect

Blockchain jobs
A Blockchain developer:
• Designs, implements and supports a distributed
Blockchain network
• Analyzes user requirements
• Designs technology around a certain business
model
• To build and launch a Blockchain network

Blockchain jobs
A Blockchain architect:
• Designs and architects Blockchain industry
solutions
• Creates Blockchain networks leveraging
Blockchain technologies and platforms
• Produces high quality code based on project
requirements
• Conceptualizes, designs and builds Blockchain
frameworks and assets

Wow! Blockchain is
amazing! Thanks for
explaining these things
to me!

I’m glad I could help you!
Now let’s go through
everything I’ve taught you
today:

Blockchain Tutorial For Beginners - 2 | Blockchain Technology | Blockchain Tutorial | Simplilearn

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