Blockchain technology and its applications in 2021

1. Course Introduction: Technology is growing rapidly, although this advancement in technology can actually say diamond money, individuals and populations choose not to use them because of the reason that it really is a time-consuming process of learning and implementing new technologies. This class is aimed at helping you understand the most exciting technological advancement that happened in the last 20 years of computer science, that is, blockchain technology. This innovative technologies truly revolutionizing the very fundamentals of how transactions are made on the internet. We shouldn't be discussing the history of block chain, beginning with the ideas that laid foundation to this technology in the early 1990s, we shall dive into the original reason for development of this technology. Learn what applications are being spawned my block chain. We will look at the limitations and challenges that arise from this technology. We will also learn some common misconceptions that people usually have regarding blockchain. We will also go into the technical details and learn about the cryptography that pass this technology. Some of this information will be technical and theoretical, and some of it will be practical utilization of the technology. 2. What is Blockchain: When you're trying to purchase something authentic, you need to make sure that you're actually buying the real thing and not some cheap look alike. How will you be able to guarantee that the product is indeed the original? You need to have information on the subject and you need to be able to verify that information in order to make a successful transaction. You need to have reliable sources of information which can be trusted and true sources that cannot be tampered with. However, in the present cyber rural, where everything is happening on the Internet, it is a lot harder to maintain this authentic source of trusted information which can be verified. The Internet has had multiple cyber attacks happening by hackers and cybercriminals, which include internet fraud, malware, banking hacks, great card drawn, etc. It has become virtually impossible to maintain this authentic source of information. The solution to this problem can be solved by a technology called blockchain. Blockchain can be used as a trusted source of information that can be verified and cannot be tampered or changed in any way. Let us try to understand the definition of blockchain. Blockchain is the ever-growing ledger that keeps a permanent record of all transactions took place on the network in a secure and chronological order and cannot be changed or tampered with. Let us dissect the definition so that we can understand the characteristics of block chain further. First of all, blockchain is a ledger, which means it's just a file that is going to store the information of all the transactions that happen and that are going to happen in the future. Next, it is a permanent record. Means that all the information that is stored in the block chain is permanent and cannot be either added or deleted in any way. Further, we understand that it is a secure storage for the information. It uses a very advanced cryptography method to secure the data in the highest levels possible. Moving on, the definition also shows us that data is stored in a chronological order that is based on the time that the transaction happen. These and a lot more features of blockchain help in making the network tamper-proof so that the information on the network cannot be hacked or ampere in any possible way. 3. Background Information: The Internet has traditionally being run on client-server model. So what is the client-server model? This is a network created between a main server computer and the number of blind computers which are connected to the centralized main server. The main server computers towards all the data and information of that particular internet application. For example, let us consider a banking situation. Banks usually provide internet banking facility to its customers through the internet. The bank has a main server computer in which it stores all the information and data of the customers. The customer is provided with the login credentials, that is a username and a password with which he can use to login on his personal computer and access his information on the main server computer. The computer which the customer uses to login to his account, becomes the client of the main server computer. The several computer and the client computer interact with each other and provide the customer with the information and data he's looking for. Usually, a bank has thousands of customers who are using Internet banking. And thus, there are thousands of client computers that connect to the main server computer to access the information and data. So this is how the client-server model looks. This model and nimble thousands of businesses to provide internet based solutions to their customers, where people can access their information using their loving credentials. However, this particular system has proven to be prone to Acker's viruses and other technical malfunctions. There have been extensive hacking operations by cybercriminals and the defected corporations and governments all over the world. And the cost of the damage is raised to millions and millions of dollars. Hacker salts have got into banking infrastructure and stole credit card and other account information of millions of people all around the world. Governments and corporations are spending cuz loads of cash to fund firewalls and other kinds of security protocols to protect their websites and data. When hackers had brewing over and over again, that they can bypass this protocols and access critical information. Moreover, this modal is also affected by technical factors. If the main server computer is affected by some kind of a virus or some sort of technical bug, the entire network will stop operating because on the client computers are depending on the main server computer. Sometimes Suez Canal handle huge traffic. This happens if community client computers are trying to connect to the server computer at the same time. These kinds of problems are not super problematic, but the definitely embed smooth flow of workflow. This is client-server model so far, and I hope you got a pretty good idea about how this technology works. And we learn blockchain is different. It works entirely different to the traditional client-server system. Instead of putting all the information and data on a centralized server computer, blockchain runs on a decentralized system of nodes. Nodes are individual computers that are spread all over the world. All of these goals host and run the blockchain program. This system of decentralized nodes provide with a ton of advantages and improvements over the traditional client-server model. First of all, there is a very small probability that the network will flay. Since in the older model, the information is stored on only one server computer on the network would fail if that one server computer fails. However, in the case of blockchain, the information is not stored on one computer. It passes through thousands of node computers. So if one node comparator goes down, there wouldn't be any effect on the network and it will still be operating. The only way a blockchain network fails is by failing on the individual node computers that are hosting the network, which would require events of global proportions and which is highly unlikely. Secondly, it is virtually impossible to hack a blockchain system. In the older client server model, the system uses only one server computer to store the information and data. So we're hacker only needs to hack into that one computer to bring down the whole network are still the whole information. However, the thousands of nodes running the block chain network, the hacker will be requiring to hack into all the node computers simultaneously without being detected. It is safe to say that the blockchain network is impossible to hack. Next, the information stored in the block chain network cannot be changed. In the case of a client-server model, any person who gets access to the server computer can change the information or data stored in the database. But in the case of blockchain network, the information on the network cannot be changed because it is running on numerous node computers. Security is one of the biggest advantages of the blockchain technology, and it has been proved to be more superior than the traditional system. 4. History of Blockchain: The technology of Blockchain was originally developed to support the creation and development of Bitcoin. As we are all aware, Bitcoin is a peer to peer virtual currency. We need to understand the development of block chain, which has roots all the way in the nineties and beyond the way to the advent of the Bitcoin. This will help us in defining the features and characteristics of the blockchain technology. You in the nineties, people use some form of technology to edit pictures and order them in the media. This process created a serious controversy and raised doubts. Question the ethical and legal standards of the media. So a need to verify the digital information was created. Initially, programmers and scientists came up with the idea of timestamping a digital document. There are a few articles about this, and it became viral because it question the very fundamental way of how business is transacted with each other. They needed to find a way to verify when a document was signed or changed or altered in any kind of way. They needed to make sure that the documents could not be gambled. Bit solution proposed was that rather than timestamping the actual document itself, businesses show timestamp the actual data used in the transaction Method prevented individuals from tampering with the documents. This idea was later used in blockchain technology, allowing it to act as a digital ledger and stored the data and the timestamp of the transactions in such a way that no one can tamper with them. And in the nineties, several papers were published by computer experts on data scientists explaining the need to improve the security capabilities on the Internet. A shift towards more secured Internet was necessary. The problems in a stimulus to Internet security protocols were exposed and it clearly showed how susceptible they are to hackers. And the 31st of October, Satoshi Nakamoto released a white paper outlining the functions of his peer to peer virtual currency. The Bitcoin. Bitcoin runs on a secure system that uses both digital signatures and actual timestamps of the transactions. All these timestamps transactions would be hashed into a chain which cannot be altered. And bird without changing every previous transaction and thus made it virtually impossible to hack. Instead of having a centralized server computer which will run the network, Bitcoin is run on a system of nodes. As we explained in the previous video, nodes are just individual computers that people from all around the world who voluntarily provided to host the chain of the network. This provides the processing unit that is required to power light chain, and maintain the network. In the client-server model, a hacker just needs to hack into only one computer, which is a centralized settled on determined that stores all the information and data. But now in the blockchain network, Hacking would be virtually impossible and making it much stronger than the traditional system. The important point to be remembered is that blockchain and Bitcoin itself cannot be hacked by the radix that people use to store the bitcoins can be had. So people need to make sure that they were Alex are secured and intact. After the creation and implementation of the Bitcoin program has started to realize the huge potential behind blockchain technology and started to apply this technology into other applications. These other obligations are also known as quiet chains and we will learn about them later in this course. 5. What is Bitcoin: Bitcoin is a digital asset which can be bought, sold, or transferred between people all across the world and securely over the internet. In a sense, and Bitcoin is similar to other assets like on gold or silver, which have value. Bitcoin can be used as a currency, and so it can be exchanged as a value for goods and services. However, Bitcoin is different from other forms of fiat currencies like dollar and pound. And the fact that Bitcoin is a distal and it does not have a physical element to it, like coins or pepper bills. Also, when we use traditional currencies like dollars and pounds for transactions, we need someone like a bank payment processor to act as middlemen to ensure that the transaction takes place. However, in the case of Bitcoin, there is no need of middlemen and you can send the money directly to any person while the network easily, securely and instantly. The technology that makes all this possible is the block chain technology and the characteristics of the blockchain technology, as we discussed in the previous videos, provide the security and processing power which the Bitcoin network uses to exist. This technology is the only thing that made this decentralized virtual currency come to life. 6. What is Blockchain Mining: Miners are a group of people all over the world that font on the blockchain network, which in turn drives them Bitcoin ledger. All the data of the network is stored in terms of blocks, hence the name blockchain. Every 10 minutes a new block is added to the blockchain, which contains all the information of transactions that happened in the last ten minutes. Like we discussed in an earlier video, all this data is stored in a chronological order, which helps in implementing security protocols of blockchain. The blockchain of Bitcoin started all the way back on third January 2009. The very first Bitcoin transaction happened. This 3D first block in the Bitcoin block chain is known as genesis block. From them, all the transactions that ever happened on the network are stored on the blockchain in sizes of blocks. Each block holds information on transactions that happened in the last 10 minutes of creating the block. As we speak, new transactions happen and get added to these blocks. Basically, anyone can become a reminder. The only thing minus do is use the computers to process unconfirmed transactions that are happening on the network. Obviously. Minus use very powerful computers in the tissues processing and graphical capabilities which are specifically designed for mining BitCoins. These minus all the cryptographic Maddie medical problems behind each transaction that successfully in God, the transaction onto the network for doing this, the minors or rewarded in Bitcoin. So what it means is that the miner owns certain amount of a big point for actually processing and validating the transaction basis how new bitcoins are created in the network. 7. SHA256 Hash: In the previous video, we discussed that miners solve the cryptographic mathematical problems to encode a particular block onto the block chain. In this video, we shall try to understand the cryptography behind it. What cryptographic mathematical problem are they actually solving? We should particularly learn about hash function called SHA 256, which powers that cryptography of the Bitcoin block chain. The shot 256 stands for secure hash algorithm, and it always has a fixed size of 256 bits, hence the name. It is a part of a set of cryptographic functions developed by the NSA, the National Security Agency. The hash is a digital fingerprint of a set amount of data. It is a bunch of alphanumeric characters that identify with the sodium amount of data. Let us use a hashed generator to understand what exactly the Chateau 56 fees. If we go ahead and input something into the data, like for example, this is an awesome class. We get a hash which identifies with that given data. This is the shot 256 hash of this amount of data here. If we input something else, like this is a bunch of random data, we get a different hash. Even if we change a single character in our data, the hash changes completely. As you can see, I just added a character board data and it changed the hash into something completely different. I will put a link in the resources in the description where you can access this online shot 256 hash generator so that you can experiment yourself with different lines of data. You can generate hash value for data of any size, being just a few lines of information on the content of world's largest libraries together, when you input all that size of data here, you will get a hash value of that information, which is a fixed length of alphanumeric characters. Let us learn about a few characteristics of the shot 256 hash. The shot 256 hash always has a fixed length. It is always 256 bits. As you can see, if our input water, we're better into the program, the hash function is always fixed length. Secondly, the hash of CMB data will be always the same. Let us try this out in an example. If we input the data in this window here, we get hash of that data. Let us now put the same data into this different window here. And as we can see, we are getting the exactly same hash. The hash of different sets of data is always different. And it is normally do different sets of data. We'll have the same hash value. Next, the shot 256 hash function is one directional, which means you can convert data into a hash value, but you cannot do the reverse. You cannot get back to original amount of data from any hash. Next, small changes in the data lead to significant changes in the hash value. If we input a line of data like lion is the king of jangle, we get the hash of this line of data. Let us just change one character and C. So as we can see here, this gives a completely different hash value. 8. Blockchain Demo: Now that we have learned about how the shot 256 hash function works, let us now understand how this is used in encoding a block onto the block chain. As we have discussed earlier, the miners on the blockchain network are in the process of building blocks and encoding them onto the block chain. So let us first see how a block is built. We shall use a web app called blockchain demo dot Iwo to understand how a block is built, let's just head over to blockchain demo dot. Now. Now here is a block. The very first block on the blockchain is called genesis block. This block right here is the genesis block of our block chain. Let us first understand the elements of a block. Every block consists of six elements. Let's take a look at them. The first element of a block is index. Index is nothing but just a serial number of that particular block. If we see the first block here, it is called the genesis block. In the next series of blocks, the index will show the serial numbers of those particular blocks. The second element is the timestamp, right here in this block, we have a timestamp of this particular block. This timestamp denotes the exact time of when this block is created. So on every block on the blockchain, there will be a timestamp stating exactly when that particular block is created. In the previous videos, we learned that the blocks are added to block chain in a chronological order, which means all these timestamps here in the blocks helping maintaining that chronological order on the block chain. The third element of the block is data. This section here contains all the information of the transactions that happened. This is the actual piece of information that we want to store on the block chain. It contains transactional information and all the other details that go with it. The next element of a block is hashed. We learned that hash is a digital footprint of the data that is stored here. Right here. This hash is the digital footprint of the data that is stored in this section here. You can see here in this passion that it has three leading zeros. These leading zeros concept will help us in understanding if a block is valid or not, which we'll speak more about that in just a minute. The next element here is the previous hash. As the name suggests, this section contains the hash function of the previous block. Here. Since this is the genesis block, which means there are no blocks prior to this, the previous hash is 0. However, when the next block is created, the hash of the genesis block will be stored as the previous hash in that block. Every succeeding block will store the hash of its previous block. This makes it possible to create a chain relation through all the blocks on the block chain. This is very important and we shall learn why in just a few minutes. The next element of the block is nonce. Here is the amounts of genesis block, and nonce is just a number that satisfies the validity of a block. Okay, let me explain further. Let us just take a look at the hash for a second. We can see that it has three leading zeros. I stated earlier that these leading zeros help us in understanding if a block is valid or not. For example, here, this hash has three zeros. So this is a valid block. Change the data a little bit. Like let me type, this is a demo block. We can see that this data generated a very different hash. And we can also see that it does not have the three leading zeros anymore, which means that this block is not valid. Now, our task is to make this block valid. We need to find out a way to generate a hash with three leading zeros, because only then we can make sure that the block is valid. Now, how do we do that? We do that by using this element called nonce. Nonce stands for number used once. Nonce is just a random number, which helps us in creating a valid hash with three leading zeros for this amount of data here, we need to figure out an exact nonce number which will generate a hash with three zeros and make this block valid. The way we figured out what the exact nonce number ease by mining the block. So when we click on the main button here, the computer uses fixed processing power and runs all combinations of numbers from 1 all the way to millions to find the exact number that will make this block valid. So when I click here, the nonce number is found and it generated the hash value with three leading zeros and thus made the block valid. The most interesting thing here is that even if we change line details on the data or the index on the nonce, we will get a completely different hashed and will not have the three leading zeros, it will make it an invalid block. Let us change the data once more, like me that I am a teacher. Now this data generated a completely different hash and we can see that this block is invalid now because the hash does not have the three leading zeros. Now, let us mine it. And as we can see, we've found the exact nonce number that satisfies this block. And it generated a hashed with three leading zeros. And hence men this block valid. This is how the shot 256 cryptography structures the validity of a particular block. Now that we have understood the various elements that create a block, we understood the cryptographic function that validates the block. We shall go ahead and take a look at how all these blocks are linked together to create an immutable blockchain. Immutable means that which cannot be changed. Let's dive in. Here. We have a set of blocks in this block chain, the genesis block and the block number one, the block number two, the block 3, the block 4, and so on. All the elements like index, timestamp, data, hash, previous hash, nonce are all present in all these blocks. We held the index which shows the serial number of that particular block. We have the timestamp that denotes the exact time when that particular block is created. We have different data fields. We have hash functions with three leading zeros, which means all these blocks are valid. We can also see that the hash value of a particular block is used in the previous hash section here, in the very next block, every block on the blockchain is cryptographically tied to the next block. And this relation continues throughout the block chains, even when it has billions of blocks in it. In the genesis block, we can see that the previous hash is 0. This is because there are no blocks before it. Block number one, we can see that the hash of genesis block is used as previous hash here. Similarly in block to the hash of the block number one is used as the previous hash. In block number three, the hash of the block two is used as the previous hash, and this follows on forever. This is what makes the blockchain immutable. If you change the contents of any block, like for example, let me change the block number one here. Let me put a name, say our June ready. We can see that it broke the validity of this block. But not only that, it broke the validity of all the blocks next to it. A change in one block will not only make it invalid, but it will also break down all the blocks that are created after that particular glob. This is because all the blocks on him blockchain are cryptographically tied together. Now, we have to fix this block one in order to make it valid. We do this by figuring out the nonce number that can satisfy this block. So in order to do that, first of all, we need to mine this. Okay, let's click on mine. And now the computer has generated out the nonce number, which generated a hash with three leading zeros. Hence, this block is valid now, next we use the same process to mine all the remaining blocks to find out the exact nonce numbers that generated the hash values. Three leading zeros to make all the blocks valid. So far we have spoke about the concept of three leading zeros in the hash, which is required to find whether a block is validated or not. This concept of leading zeros is called the difficulty level. The difficulty level is tied into the block chain and it increases as more and more mining computers are connected to the blockchain network. This means that computers will take more time and more processing power in order to generate the nonce number, which can satisfy and validate the block. In the previous video, we learned that miners solve cryptographic math problems to validate a block. So that cryptographic math problem is actually the problem of finding the exact nonce that satisfies and validates the block. This whole system makes the blockchain network completely secure, an immutable, if any hacker or intruder campus with any of the blocks here, all the blocks from that particular block to the end will become invalid. So if anyone wants to tamper with blockchain in this way, they will need to mine all those blocks again, all the way to the front faster than the rest of the miners in the world. They will need to have at least 51 percent of the total hashing power of the network under their control. And they also need to do this completely under 10 minutes because new blocks get added to the blockchain every ten minutes. Why it is virtually impossible to hack or temple with the blockchain network. 9. How Bitcoin works: Understanding how the Bitcoin works will help us understand the characteristics of the blockchain network itself. In the rised sense, bitcoin has fought fundamental components. The first is soft left. Essentially, Bitcoin is just a piece of software. And the software defines what a bitcoin is, how the Bitcoin needs to be transferred from one person to another. It also defines the validity and invalidity of transactions, and it also defines the rules for the validity of the Bitcoin itself. And the second component is cryptography. Bitcoin is a cryptocurrency. Um, so as a cryptocurrency in depends on cryptography to regulate the transfer of Bitcoin between parties and also the very creation of new units of Bitcoin. The third component of Bitcoin is hideaway. To run the software of the Bitcoin, it needs computers and processing unit. This is where miners come into the space. Minus our people spread across the world that are using their computers to run the Bitcoin software. So basically, the Bitcoin software is running on the network of thousands of computers all around the world, forming the hardware component of Bitcoin. And the fourth and final component of Bitcoin is motivation. All the miners that are running the software on their computers are doing so because they are rewarded with bitcoins when they successfully and gold a block onto the block chain. So in visited word gets them modulated to run their mining computers. Let us now go through the very process of adding a block onto the block chain, which will help us understand how these various components of Bitcoin come together and found this awesome network, okay, to start with, the first component of a Bitcoin is software. So what the software does is that it goes out a cryptographic mathematical problem every 10 minutes. The challenge is to find the specific nonce number, which will help in finding the valid hash for the block so that it can be added to the block chain. So this is the challenge issued by the software every 10 minutes. Once this challenge is issued, the miners get into action. These miners are running the hardware of the Bitcoin, which includes all the thousands of computers that are being used to render Bitcoin network. So rate when the challenges issued, no motivation components tags, the minus on the network start competing with each other to find the exact nons that makes the hash and the block valid, the computers have to guess through billions and billions of random numbers to find the one number that can satisfy the block during this process, at some point of the dime, one of the miners in the whole network will solve the problem and find the nonce, which is satisfying the hash. When this happens, all the other miners on the network take the responsibility of verifying the validity of the block, which has been just mind. This is what makes the Bitcoin so secure. The solution found by the one minor is verified by all the remaining miners on the network in order to verify if the solution is actually right when the verification is completed and the block is deemed valid by the whole network, the new block is added to the block chain. This is how blocks are added to the blockchain every 10 minutes and they contain the data of transactions that happened all over the network. Once this completes, the miner who sold the block will receive a reward, which is right now 12.5 Bitcoins. And this is how new bitcoins are created on the network. 10. Concepts of Bitcoin: In this video, let us go through some of the important concepts of bitcoin that make this go NC and desirable. The first is elimination of middleman. In the traditional world, all transactions happened to a middleman on the Internet and number of banking institutions are great guide companies are framing processors like PayPal act as middlemen who controls the transfer of money from one person to another. These middlemen keep a centralized record of all the transactions that happened to them, the whole authority, and manage them one at every process in the world of Bitcoin. And these kind of middlemen are completely eliminated. Bitcoin is a peer to peer network which replaces the third party integration. One can transfer money to anyone in this world without any kind of banking institution or payment processor as intermediary. It's just like attaching money to an email and sending it to the person. In traditional ways of storing all the information at a centralized server location, there is a single point of failure, like we discussed in the previous videos. However, while you're transacting in Bitcoin, there is no single point of failure. Even if some of the computers go down, network is too powerful to continue its existence. This is what makes the Bitcoin network to be reliable. The next important concept of Bitcoin is that it is completely decentralized. Unlike other fiat currencies like dollars or pounds, there is no central authority to control these transactions. There is no singular body to manage the circulation, the network takes care of itself. The next concept is trust. Unlike the traditional process, transacting in Bitcoin does not need any dressed because every transaction on the network is verified and agreed upon by all the different nodes that are on the network. 11. Getting Started with Bitcoin: So far we have understood what exactly a bitcoin is, how it works, and we also understand the concepts of Bitcoin. In this video, we shall go ahead and get started with using Bitcoin. And the first step in starting with Bitcoin is actually creating a valid. A valid is similar to an account. This is what you will use to store Bitcoins. If you receive Bitcoins from someone, they get stored in the account. If you send bitcoins to someone and they will be deducted from this account. Every account will have an address and address is similar to your account number. You can have multiple addresses to use them for different purposes. Now that we have understood what a Bitcoin realities let us go through the different kinds of Bitcoin balance you can create. The first is mobile app valid. And this is kind of a valid, you can create on your smartphone, be it iOS, Android, BlackBerry, or Windows. You can download the app from the valid and start using it to create addresses and transacting Bitcoin. And the second is desktop ballots. There are certain valid services that provide desktop apps that you can download to your Windows, Mac, or Linux machines and sat operating with Bitcoin. The third kind of valid is the hardware valid? These are little hardware systems that come pre-built with the valid surveys. These are the only kind of validates that costs you money. These are also known as cool stories for Bitcoins and this is the highest level of security that you can achieve when transacting with Bitcoin. The fourth kind is Web Apps. Almost all Bitcoin valid services provide you with a web app that you can use to store, send, and receive Bitcoins. You just need to create an account on that particular website and you will be able to start transacting with Bitcoin. Some of the key points that you need to understand before opening a valid are that number one, you can have any number of ballots and any number of Bitcoin addresses to use. You can use H valid for a different purpose if you'd like to do so. The number two is that you don't need to purchase a full Bitcoin. You can just purchase packs of Bitcoin, for example. You can just buy Bitcoin worth $1000 or Bitcoin what? A $100 or you intend dollars of Bitcoin. Minima 3 is that unlike regular banking or credit card transactions, where you can start irreversible if you made a wrong transfer of money. Transactions done in Bitcoin block chain are permanent. There will be no way to reverse transactions. And then through Bitcoin, always make sure that you're using the correct address to send or receive Bitcoins. 12. Applications of Blockchain Technology: We previously discussed then the main reason for developing blockchain technology was to create the Bitcoin currency. Satoshi Nakamoto use blockchain only to bring Bitcoin the life after the enormous success of Bitcoin programmers today are using Blockchain technology to improve the cybersecurity and create new kinds of applications to use this technology much more to its full potential. And the main reason for this is that blockchain technology makes things simpler, smarter, and more secure than the traditional client-server system. Blockchain technology helps in creating three elements that were not traditionally possible in the oldest style of Internet. Creating value, robbed in animals, people to create a digital asset which can be transferred among people anywhere in the world without the need of any kind of middlemen. And this is what Bitcoin did for money, right? It created a virtual currency which can be transferred between two people without any third party. And the second is creating trust. The information stored on the blockchain is dominant to secure an unchangeable. We have already discussed that blockchain technology uses a very advanced military grade encryption system, helps it to do it this way. This created dressed as there is no way for third party to alter the information that is stored on the network. Reliability blockchain network is a distributed system. There is no centralized location for storing the information. The network runs on thousands of computers across the network, which is the opposite of traditional centralized systems. This animal blockchain to virtually Nemo fan. This is because there is no single point of failure and locked chain, even if some of the computers on the network plane and the blockchain can still run because it does not have a centralized system to depend on. This gives blockchain that reliability factor, features and characteristics like these made everyone get interested in this technology. People started to see that blockchain is way beyond Bitcoin. And they started to implement this technology on and applications as well. Apart from Bitcoin, many other cryptocurrencies how come into a distance due to the immense success of the concept. These are called Altcoins under defer to Bitcoin in many ways. And they're developed on their own blockchain networks. That is, look at some of the cryptocurrencies that are ruling the market right now. Bitcoin. Bitcoin is the first cryptocurrency, and of course it is the biggest of all. It has the highest market share. It is created to provide a de-centralized peer-to-peer system to transfer money from one person to another. It completely removes third parties from the transaction process. It delirium is also a decentralized computer network that allows developers to build applications on its blockchain. These applications are open source and other animals. Their cryptocurrency used on deuterium is known as ITER. The next is Ripple. Ripple is a payment protocol which runs on a permissioned blockchain and aims to support instant and cheap transactions. This cryptocurrency has been mostly adopted by financial institutions. The next is Bitcoin Cash. Bitcoin cash is the product of the hard fork to the original Bitcoin. The new currency is featuring bigger block sizes and the block size has been increased from one MB to eight MB. This resulted in lower transaction fees and increased usability as a transactional currency. Light coin, What's silver is to go light coin is to Bitcoin. Light going is a decentralized cryptocurrency which is similar to Bitcoin in technical framework, it aims to serve as a transactional cryptocurrency featuring law and block pains and lower fees than Bitcoin. Dash dash began as a fork off light coin, and it aims to provide a de-centralized transaction system with enhanced features. This cryptocurrency allows for standard transactions in addition to instant and private transfers way a master nodes. 13. Smart Contracts and Ethereum: One of the revolutionary technology that has borne out of blockchain is smart contracts. Smart contracts facilitate exchange of items of value on the Internet without the need of middlemen or an escrow service. In actual sense, the blockchain itself acts as a weakness of the contract. When the two parties involved in the contract agree to draw a smart contract, the information in the contract turns into a block in the blockchain network, no visible to all the nodes on the network. However, the identity on other private information remains anonymous. Let us take a simple example and understand how this works. Imagine that Steve is selling a stock of a company and Bill wants to buy it. So both Stephen Miller drop a smart contract, signed and dated exactly a week from today, steamboats on the information that is needed to transfer the ownership of the stock to build and merely deposits the money that should be paid to steam. When the date of the contract arrives, the ownership of the stock is automatically transferred to Bill and the money is automatically paid to steal. This example demonstrates Smart Contract looks. This technology of smart contracts paved the way to Ethereum. So what is a deuterium? It's helium is an open source software that uses the smart contracts technology to facilitate the development of decentralized applications. Like to look neutering is the creator of Italian. He previously worked for Bitcoin and realized that the potential is too large. And so he developed this black one, which allows programmers to develop their own blockchain network without actually creating an entirely new block chain. Instead of doing that, they just plug and play in an already existing Ethereum blockchain or virtual currency known as etre, is used to pay for the transactions that are utilizing the idea of blockchain network. People are also thinking about using the blockchain network or the Blockchain technology to be used in voting. So rather than having to standing in line and route, people can vote on their computers with 0 possibility of fraud. Since we have already discussed, it is impossible to change or alter information on the blockchain. 14. Limitations of Blockchain Technology: So far we have learned about how awesome blockchain technology is. We understood how this can actually improve the Internet and various applications and make them much safer, faster, and smarter. However, there are certain limitations to blockchain technology, which will make it not suitable for such institutions. In this movie, we shall go ahead and understand the various limitations that affect blockchain technology. Since Blockchain is a relatively new technology, the knowledge on this subject is not yet complete or severe misconceptions and a serious lack of awareness regarding this technology, which is a CV at backdrop for people and corporations to start using it. Lack of developers, like we just said, a new technology with a lack of awareness leads to less programmers and developers working on it. There is a serious lack of professional blockchain developers. The workforce is low for people to actually implement this technology in extensive levels. Okay, this is actually kind of a bummer. And the main feature of blockchain is being tamper-proof. No one can change or alter the information that is one stored on the blockchain. This is the future that makes block chain so secured and Bitcoin so successful. However, in certain use cases, people may want to go back and change or modify the information on the block chain for those kinds of applications, blockchain isn't really long way to go because it does not allow any kind of modifications are alterations to the information once it's stored on the blockchain, public and private keys. And this is again, an advantage that can become a problem sometimes, as we know, Blockchain uses a very high level military grade encryption to facilitate the security protocols. There are two kinds of keys, public keys and private keys. The private key from the one that people use to access their Bitcoins on the network. However, if someone loses their key, the bitcoins are launched their way and sometimes there might be no way to get them back. Even if there is a way, it might not be very practical. We already discussed that blockchain runs on a decentralized network of nodes. These nodes are thousands of computers spread across the world on which the blockchain network, on the blockchain software is run. When we look at this scale, a blockchain network do RAN uses a significant amount of energy on processing power. This actually exceeds the traditional systems from a hundreds and sometimes thousands of lines. We already learned that once a miner finds the nonce that validates a block, the rest of the mining community verifies if the solution is actually right. Blockchain uses all the nodes on the network to process and verify if this block of information before adding it to the block chain. But when we are dealing with larger block chains with thousands of blocks being added every day. It usually means that the time being taken for processing the block and verifying it will be a lot more. 15. Misconceptions about Blockchain Technology: In this video, we shall go over and understand some of the most common misconceptions that people have regarding blockchain technology and Bitcoin. There is only one block chain in the general public. The majority think that Bitcoin is the only block chain. The actual truth is there are a hundreds, if not thousands of blockchains and more are being built every day. Bitcoin is just one block chain and every each block chain is designed to so a different purpose. Criminal activities. There has also been a widespread misconception that Bitcoin can be easily used for money laundering and other criminal activities since it is known to be anonymous. First of all, Bitcoin is not anonymous. Pseudonymous, most blockchains have public and they are traceable. In fact, Bitcoin is the most traceable currencies right now on the planet. In 2007, a dark net marketplace known as Silk Road was amazing and criminal activities like selling drugs and other kinds of criminal activities. However, the FBI was able to backtrace the Bitcoin transactions and the grant down the website and arrested the people behind it. People started believing that Bitcoin is only used for illegal and money laundering purposes. However, that's not actually true. All the transactions that are on a block chain are traceable and mostly Bitcoin cannot be used for illegal purposes. All blockchains are public. Again, the Bitcoin blockchain is public, but not all blockchains are probably, there are some completely private and sometimes semi-private blockchains on a public blockchain on the transactions carried on the network can be viewed and participate in by anyone. However, on private blockchains, only people with respective keys can actually see or participate in the transactions. The end of fiat currency, some people are assuming that Bitcoin is going to replace all the fiat currencies in the world. However, impossible for now, because blockchains that are being built now are not capable of running the whole financial sector. Blockchains are slow. They cannot run financial operations at the levels of speed in which banking structures are run. However, we can be optimistic and wait for blockchain to evolve into something much capital applies to finance sector only. There is also a misconception that blockchain technology can only be applied in the financial sector. As explained before, blockchain technology exceeds Bitcoin or any other financial aspect. Blockchain as a foundational technology, is being used in several industries like real estate, health care, government organizations, etc. There are also ideas of implementing Blockchain technology for verification of documents, identification of people, fraud detection, and also in the voting system. 16. Course Conclusion: So we have almost reached the end of the class. I congratulate each of you in successfully completing the class. Although learning and new technologies had, you guys did awesome. I hope you've got a pretty good idea of the concept of blockchain and its various applications. This is not the end of our journey. Blockchain is a super growing technology and it would be moving ahead so fast. I'll keep updating this class bit newer topics and resources, which will help you get updated along time. So keep checking back and you'll find the newer information that is being updated. Now, I need you to help me. It's something in the course dashboard. You will find the option to review this class. If you think you learned something new in this class, please go ahead and give a five-star review so that more people will be able to find this glass and benefit from it. If you have specific gods are suggestions on improving this class, please go ahead and let me know in the discussion panel and we'll be looking forward for your response. So that's it for now. And I will be back soon to share my knowledge with you guys. Until then this is Arjan signing off and good luck.