Certified Blockchain Expert

Introduction to the Certified
Blockchain Expert (CBE)

Certified Blockchain Expert
A Certified Blockchain Expert is a skilled professional who has thorough knowledge of what is Blockchain Technology, how it
works in different industries.
The Purpose
Establish and govern minimum standards for credentialing Blockchain experts who specialise in enterprise development
measures.
Inform the public that credentialled individuals meet or exceed the minimum standards.
Reinforce Blockchain expertise as a unique and self-regulating profession.

For Whom
● Investment Bankers, Consultants & Advisors

● University Professors
● Engineering & Management Students
● Programmers & Developers
● Software Engineers & Architects
● Cryptocurrency Enthusiasts
● CEO, CTO, CIO, CISO or any other CXO
● Operations Head in Businesses
● Senior Government Officials
● Security Professionals, Administrators
● Venture Capitalists, Angel & Seed Investors
Benefits of taking this course
Prove your Blockchain skills & understanding.
Grasp a deeper understanding of Blockchain & how it works.
Build your own Blockchain solution for different business use-cases, with acquired knowledge.
Requirements to take this Certification
Basic knowledge of Computer Science.
Awareness of different blockchains like Bitcoin, Ethereum etc.
Motivation to acquire a profound understanding of Blockchain.

Recommended Experience
There is no such recommended experience required for getting this certification.
Duration for the Course
10 hours for the entire training.
1 hour for assessment exam.
Training will be online.
Training can be consumed as per candidate’s availability & online speed.

Exam
There will be an online exam with multiple choice questions adding upto 100 marks followed by a training.
You need to acquire 60+ marks to clear the exam.
In case you fail the exam, you can retake the exam after 1 day.
You can take the exam for a maximum of 3 times.
If you fail to acquire 60+ marks even after 3 attempts, you will need to contact the Blockchain Council team to have manual
assistance for clearing the exam.
Certificate
Course Content
Module 1: Introduction to CBE
Module 2: Origin of Blockchain Technology

● Electronic Systems and Trust
● Distributed Versus Centralized Versus Decentralized
● Bitcoin Predecessors
● The Bitcoin Experiment
● Bringing Bitcoin to Life
Module 3: Introduction to Blockchain

● What is Blockchain?
● Why is Blockchain a Distributed, P2P Network?
● Blockchain Vs Cryptocurrency
● Types of Blockchain
● What Are Different Blockchain Technologies?
● Benefits of using Blockchain Technology
Course Content
Module 4: Tokenize Everything
● Understanding Tokens
● Ethereum Token Standards
Module 5: Blockchain Ecosystem

● Merkle Tree and Hashing
● Blocks, Wallets and Addresses
● Public and Private Key
● Cryptography and Cryptographic Algorithms
Module 6: Blockchain Mining

● What is Blockchain Mining?
● Types of Mining
● Who are Miners?
Course Content
Module 7: Transaction: UTXO Model Vs Account-Based Model
● Introduction to UTXO Model
● State Transitions in the UTXO Model
● Introduction to Account based Model
● State Transitions in the Account Model
Module 8: Security and Privacy

● What are Smart Contracts?
● What is Consensus?
● Types of Consensus Algorithms
Module 9: Other Consensus Algorithms in Blockchain
Module 10: Blockchain Solutions - Steps and measures

Course Content
Module 11: Use-Cases of Blockchain
Module 12: Other Use-Cases of Blockchain

● Blockchain in IoT
● Blockchain in CBDC
● Blockchain in Retail and Fashion Industry
● Blockchain in Sports and eSports
● Blockchain in Legal Industry
● Social Impact of Blockchain
● DeFi Use-Case in Blockchain: Stablecoins
● DeFi Use-case in Blockchain: Lending and Borrowing
● DeFi Use-Case in Blockchain: Synthetic Assets
● DeFi Use-Case in Blockchain: Prediction Markets
● DeFi Use-Case in Blockchain:DeFi Insurance
Course Content
Module 13: Additional Resource
● Directed Acyclic Graphs
Origin of the Blockchain
Electronic Systems and Trust
● Before Blockchain, the idea of cryptocurrency and the systems reliable to operate that currency was just a dream. The
internet was required to be distributed, reliable and it was needed to be used by almost all of the population as it
connects the world together digitally.
● The development of TCP IP networking architecture made a huge impact on the usage of the internet. It established
the standard for communication such as HTTP which is used to provide web browsing and SMTP, an electronic mail
delivery service.
● The systems always required two different types of trust. They are:
○ Intermediary trust: An intermediary trust means a person who is relied on to make relational and fair
decisions.
○ Insurance trust: A third party who is responsible for making decisions that is related to the safety and
soundness of a value.
● When value takes a digital form that is when it is moved from physical items like coins, notes, metals like gold, silver,
platinum etc., to digital, there is a need for the trust among the people involved in the transactions.
Electronic Systems and Trust
● Trust is never stable in the financial world.
● This is one of the main reasons in the pile of events that lead to the creation of the mighty digital currency BITCOIN.
● The Blockchain technology is an effort that was made to re-establish the long lost trust in digital transactions. It is
made up of technology to build trust, specifically cryptography which is used to deal with critical data, to automate
and enforce the trust into the system.
● Bitcoin was the first working cryptocurrency system that was built using the Blockchain technology.
Distributed vs Centralized vs Decentralized
Any piece of software that is connected to another system, must follow a systematically designed architecture for
connection management, scalability and efficient use.
There are 3 different types of architectures available that are used according to the business needs, user flow and nature of
the network that the system is using.
The widely used and most popular network architectures are:

1. Centralized architecture
2. Decentralized architecture
3. Distributed architecture
Centralized Architecture
In the centralized architecture, there are two types of nodes that participate in
the system. The first one is the server or super node and the second one is the
client or user node. The super node is the heart of the network which stores the
data and provides services to the clients connected to it.
The advantages of this approach are:

● It is simple for deployment.
● The development time for this approach is relatively short.
● It is cheaper, which means the development, deployment and
maintenance costs are less.
● It is practical when there is a need to control the data at one location.
The disadvantages are:
● There is always a chance that the system is prone to failure.
● Higher security and privacy risks for users.
● It requires longer time for accessing the data for users who are physically
far from the server.
Decentralized Architecture
As the name suggests, the system is not centric, it is distributed to multiple super nodes
or servers. Every super node in the network is connected with at least one another super
node. Each super node contains the same copy of data available and must provide the
same services as other nodes.
The advantages of using decentralized system are:
● The system is less likely to be unavailable for users than a centralized system.
● It assures better performance in availability and response time.
● It provides space for diverse and flexible systems.
● There are some security and privacy concerns to be taken care of as the data is
available at multiple locations.
● The maintenance costs are higher because we are maintaining multiple servers
which are high performing computers with advanced hardware.
● The system needs to be properly optimized, else it leads to inconsistent
performance.
Distributed Architecture
A distributed system is the same as a decentralized system with no central owners. In
distributed systems, users have the same level of data access, though user privileges can be
be restricted if needed.
The pros of distributed systems are:
● The system is highly fault-tolerant.

● The network is transparent and more secure.
● It promotes resource sharing that can reduce burden on single or selected machines.
● The network can be extremely scalable.
The cons of using distributed systems are:
● It is more difficult to deploy a network.

● The maintenance costs are higher than any other method.
Predecessors of
Blockchain
DigiCash
● DigiCash Inc. was a company that deals with finance through electronic money founded by David Chaum, an
American computer scientist and cryptographer in 1989.
● David Chaum made it possible by introducing a new mechanism called Blind Signature which plays a vital role in
assuring the transactions made anonymously.
● The Blind Signature disguises (blinds) a transaction before it submits to the network and the blinded signature is
verified publicly with its original form i.e., unblinded form as a regular signature.
● The company declared bankruptcy in 1998 and eventually sold their assets to another digital currency company called
Ecash Technologies. Ecash Technologies was eventually acquired by InfoSpace on Feb. 19, 2002.
HashCash
● HashCash is an email filter based on a proof-of-work system to figure out spam mails and DoS attacks. Adam Back
developed HashCash in the year 1997 and a formal documentation was released in the year 2002 in the paper
“HashCash - A Denial of Service Counter Measure”.
● HashCash appends a textual encoding of a hashcash stamp to the email header to prove that the sender utilized some
CPU power in calculating the hashcash stamp which a spam is most unlikely to do.
● HashCash uses a 160 bit SHA-1 encryption scheme. The PoW used by the HashCash is designed to have the first 20
bits to be zeroes 0’s) thus leaving 2^140 combinations.
HashCash
● The header of the HashCash looks similar like:
X-Hashcash: 1:20:1303030600:anni@cypherspace.org::McMybZIhxKXu57jd:ckvi
● The header contains:

○ ver: It is used to represent the version of HashCash.
○ bits: The number of bits that are used as "partial preimage" that means the zero bits present in the hashed
code.
○ date: The date and time when the sender sent the messenger and is represented in the format of
YYMMDD[hhmm[ss]].
○ resource: Resource is the data in the string format that is being transmitted which could be an IP address or
email address or something else.
○ ext: It is an optional field which is used to represent the extension used. It is ignored in the version 1.
○ rand: It is just a string of random characters that are encoded in base64 format.
○ counter: This field represents the binary counter of the hashcash that is encoded in base64 format.
B-Money
● B-Money is an early age distributed cash system proposed by Wei Dai, a computer engineer known for his
contributions to cryptography and cryptocurrencies.
● He developed the Crypto++ cryptographic library, created the B-money cryptocurrency system, and co-proposed the
VMAC message authentication algorithm.
● The smallest subunit of Ether, the wei, is named after him.
● B-money was proposed by Wei Dai as “Anonymous, Distributed Electronic cash system” in his white paper on the
Cypherhunks mailing-list in November 1998.
● It was assumed that the "digital aliases" will be able to send and receive money through a decentralized network and
even ensure the implementation of contracts among themselves without the involvement of a third party.
● Unfortunately, the B-Money project has not moved from the dead end after the implementation of the white paper.
E-Gold
● E-gold Ltd was a digital gold currency company operated under Gold and Silver Inc.
● The company was founded by Douglas Jackson and Barry Downey in 1996.
● It was one of the earlier companies that tried to establish digital currency, but it used gold and other precious metals,
mostly silver as the underlying currency as they are globally acceptable.
● E-gold lets users create an account on their website and deposit money in the denomination of grams of gold or silver
mostly and provide instant transfers of gold to other accounts.
● The company was at its peak during the year 2006 with more than $2 billion worth of spends per year which was
momentarily equivalent to $71 billion USD.
● E-gold faced many hurdles such as security issues, digital scams, cyber attacks, systemic problems as the technology
available during the era was primitive.
● During the early 2000s, the feature of immediate settlement implemented by e-gold was recognized and it rose as the
key for the emergence of peer-to-peer transactions of digital rights of an asset such as in smart contracts.
Bitgold
● Bit gold is one of the most known decentralized virtual currency projects taken before blockchain. It was proposed by
Nicholas (Nick) Szabo in 1998.
● The bitcoin and bitgold protocols are as similar as, at one instant, it is said that people thought that Nick is the
anonymous bitcoin creator, Satoshi Nakamoto.
● The bitgold system that was proposed by Nick Szabo is non-fungible.
● The bit gold operates on a decentralized and distributed system instead of a centralized authority controlling its
nerves.
● Dominic Frisby provided circumstantial evidence to believe that Szabo is the original Satoshi Nakamoto, but, as he
admits that no proof is found. One day in July 2014, Szabo wrote an email to Frisby saying "I'm afraid you got it wrong
doxing me as Satoshi, but I'm used to it."
● Nathaniel Popper, a famous journalist in The New York Times who was researching bitcoin wrote an article stating
that "the most convincing evidence pointed to a reclusive American man of Hungarian descent named Nick Szabo."
Bringing Bitcoin
Back to Life
Compelling Components
In order to be an open source project, Bitcoin has 3 unique components that attract the developers in a unique way. They
are:
● Value: A unit to account the tokens in a transaction. In the Bitcoin Blockchain, the unit is BTC, in Ethereum, the value
is measured in terms of ethers or also called ETH.
● Distribution: The unique way of distribution of a Blockchain network. The bitcoin Blockchain whitepaper suggests
that the network is distributed using decentralized nodes around the world in order to maintain the record for the
transactions made.
● Consensus: The Proof-of-Work consensus uses the validators called miners. The miners are responsible for
maintaining the security and the stability of maintaining the transactions record.
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Achieving Consensus
● Satoshi Nakamoto, creator of the bitcoin Blockchain, launched the network by creating the first block of the Bitcoin
Blockchain by mining 50 bitcoins on January 3, 2009.
● He used the processing power to make transactions, validate, verify and create the first block of the chain called
Genesis Block.
● Satoshi designed a client application which can be downloaded and run in order to run nodes and mine bitcoin blocks.
Satoshi wrote in his post while publishing the software: “If you can keep a node running that accepts incoming
connections, you’ll really be helping the network a lot”. The post was titled as “Bitcoin v0.1 released - P2P e-cash”.
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Achieving Consensus
● Gaining the trust to note the transactions in the network in other words to generate the new block is called Achieving
Consensus. It is a process that miners follow for powering up the network that is used for the following purposes:
○ Block Discovery
○ Validation of Blocks
● Generating transactions
○ The accounting type of Bitcoin is uniquely designed for saving transactions. It is called Unspent Transaction
Output (UTXO) which is basically a set of inputs and outputs.
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An Early Vulnerability
● As working with a new protocol, bitcoin also had its share of troubles in early stages. It wasn’t easy to work with the
Bitcoin client. As a result, not a lot of people downloaded it.
● A major flaw in the bitcoin network was detected. On August 6, 2010, a member of the bitcoin community noticed a
strange transaction with a huge amount of bitcoins and posted it online as “The value out in the block #74638 is quite
strange”.
● The vulnerability was eventually resolved and bitcoin was forked to split up the chain. The fork was made so as not to
disrupt the mainchain and avoid erroneous transactions.
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Adoption
● The unknown identity of Satoshi has also helped in making Bitcoin, a fully decentralized entity. The developers did not
follow the creators methodology.
● The successor of Satoshi, Gavin Andersen, a popular computer scientist, created an event called Bitcoin Faucet and
gave away small amounts of Bitcoins to the people in the hope of increasing its usage.
● Andersen became the chief scientist of the now-defunct Bitcoin Foundation.
● On May 22, 2010, Laszlo Hanyecz, a programmer was credited with having the first bitcoin transaction for a good
service. The community celebrated that day as Bitcoin Pizza Day.
● In July 2010, a platform was named Mt. Gox was created by Jed McCaleb to host an exchanging event called Magic:
The Gathering.
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The Bitcoin Experiment
The 2008 Financial Crisis
● Before COVID - 19, the worst recession faced by the global economy was the period in the year 2008.
● It had the worst impact on the global economy that people considered it as the Global Financial Crisis (GFC). Many
economists around the world considered the 2008 crisis as the most serious financial crisis after the Great
Depression.
● Lax financial regulation along with the excessive risk-taking by banks, and the bursting of the United States housing
bubble caused a huge drop in estimations of mortgage-backed house holds which were partnered to American real
estate.
● The financial institutions around the globe suffered severe damage and declared the bankruptcy of Lehman Brothers
on September 15, 2008 eventually resulting in an international banking crisis.
● Some economists named the post-recession years as the weakest recovery since the Great Depression and World War
2. One commentator even called it ``Zombie Economy '' as it was neither dead nor alive, it was barely surviving.
The Bitcoin Whitepaper
● Bitcoin is a decentralized digital currency without a central governing body such as the Central Bank which can be
transferred between peers without any need of the intermediate parties.
● Transactions are verified, validated by the nodes through the cryptography network and recorded in a publicly
distributed ledger called a Blockchain developed by an anonymous person or a group of people known as Satoshi
Nakamoto.
● On 18 Aug, 2008, a pseudo anonymous user registered the domain bitcoin.org with the email satoshin.gmx thus
publishing the bitcoin around the globe. On 31 Oct, 2008, a whitepaper named “Bitcoin: A Peer-to-Peer Electronic
Cash System“ was posted to a crypto mailing list. Nakamoto implemented the bitcoin as an open-source software and
released its source code in January 2009 on sourceforge.net
● On 3 Jan, 2009, the bitcoin network was created and Nakamoto mined the first block of the chain which is called the
Genesis Block.
● A text was embedded into this block that says “The Times 03/Jan/2009 Chancellor on brink of second bailout for
banks".
Abstract
A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another
without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if
a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem
using a peer-to-peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based
proof-of-work, forming a record that cannot be changed without redoing the proof-of-work. The longest chain not only
serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. As long as a
majority of CPU power is controlled by nodes that are not cooperating to attack the network, they'll generate the longest
chain and outpace attackers. The network itself requires minimal structure. Messages are broadcast on a best effort basis,
and nodes can leave and rejoin the network at will, accepting the longest proof-of-work chain as proof of what happened
while they were gone.
Available at https://bitcoin.org/bitcoin.pdf
The white paper submitted is 9 pages long with 12 subsections covering all the aspects that are related with the bitcoin
network. The sections are:
● Introduction
● Transactions
● Timestamp server
● Proof-of-Work
● Network
● Incentive
● Reclaiming Disk Space
● Simplified payment verification
● Combining and splitting value
● Privacy
● Calculations
● Conclusion
Timestamp Server
● Timestamp servers are a typical form of servers that are used to cryptographically sign, authenticate and validate a
digital signature with a signing certificate that took place at a particular moment of time.
● This allows a user to verify at some time in future that a document or program or any other file was digitally verified
and signed at a particular instance of time.
History
● The timestamping idea is ancient.
● Robert Hooke, the discoverer of Hooke’s law did not publish his writings at the time of his discovery in the year 1660,
but wanted to claim the priority.
● Galileo also used the same technique for concealing the details of his discoveries of the Venus phase.
● The same approach is also used by Sir Isaac Newton once the details he wrote about the “Fluxional Technique”.
● Haber and Stornetta are the original inventors of the Trusted Digital Timestamping technique. They discussed the
technique in their literature.
Types of Timestamping Server
PKI based: In PKI based timestamp server, the timestamp token used is secured using the PKI digital signature.
Linking-based: In this schema, the new timestamp is generated in relation with the existing timestamps.
Distributed: The scheme that uses the cooperation of multiple parties in the process of creating a timestamp.
Transient key scheme: It is a flavor of PKI based schema. It uses signing keys with short life-span for timestamping the
objects.
MAC: It is founded in ANSI standard, which is used to timestamp with a simple secret key.
Database: It stores the documented hashes in a trusted location as archives and also provides a lookup service for
verification that is available online.
Hybrid scheme: A mixed flavor of the linked scheme with the signed method.
Trusted Digital Timestamping
● By the standards specified by RFC 3161 to be a trusted timestamp, it must be issued by a Trusted Third Party (TTP)
which is responsible for the role Time Stamping Authority (TSA).
● Higher the number of TSA’s, higher the reliability and lower the vulnerability.
● The newer standard ANSI ASC X9.95 amplifies the RFC standard with its data level security prerequisites for ensuring
the integrity of the data against any source of time which is proved as a reliable source to any third party.
Timestamp Server
Timestamp creation
● In the first step, a hash value is created with the given data.
● The calculated hash value is further sent to the Trusted Timestamp Authority (TSA).
● The TSA appends the current timestamp with the hashed value and digitally signs the concatenated string with its
own private key.
● Then after, the signed hash and the timestamp used are sent to the requester. The requester stores the received
information along with the original data available at its end.
Timestamp Verification
● The data which is to be verified is first hashed and appended with the timestamp provided.
● Then we need to decrypt the data received from the TSA which is signed with the TSA’s private key. So we use its
public key for the decryption process.
● Then, we compare the decrypted data with the computed data which needs to be verified.
● If the data evaluates the same, the submitted timestamp is valid, else it is an invalid timestamp which means either
the stamp is modified or it is not issued by the TSA.
Storing Data in Blockchain
To store data, which is almost always the transactions list in a block, the Blockchain technology follows a series of steps to
provide safe and secure data storage. They are:
● At the initial stage, the data that needs to be stored in the block is broken into chunks of data that is possible to
accommodate into a block.
● After splitting the data in chunks, each chunk will be encrypted to limit the access to only the owner unless it is
specified.
● Next, the data chunks or files will be distributed across the network in such a way that all your data will be available,
even if a part of the network is unavailable.
In cloud storage such as Amazon or Microsoft, instead of the company handling your data, the files will be distributed across
a network of people all over the world. The Blockchain cloud is shared by the community for maintenance and still it
restricts others to modify your files. So, we can also use this technology in public services to keep public information safe,
secure and decentralized.
Advantages
● The download speeds of the network will be increased exponentially by using peer-to-peer networks similar to
torrents.
● The data is globally distributed which means access at any time and anywhere.
● No need for privacy concerns.
● Data storage cost is relatively cheap such as $2 per TB per month.
● The immutability feature of the Blockchain can ensure the files are unaltered which provides the freedom for the
users to store sensitive data without worrying about the security and privacy of the files.
Disadvantages
● The security is directly proportional to the size of the network. If the Blockchain network used does not have a big
network holding it that means it doesn’t have a good number of nodes in the network, the entire system is
susceptible to 51% attack which directly disrupts the data.
● More redundancy is needed to secure the data than any other storage model if the network is not big or reliable
enough.
● The overhead of the network communication is huge.
● Network bandwidth can be a problem and it can be overcome by selecting an efficient consensus algorithm.
Current Blockchain storages available
● Storj.io and Sia.tech are two famous Blockchain storage platforms that are available right now.
● Filecoin also allows to mine filecoins by sharing storage space and the coins are mined by sharing storage space.
What is Blockchain?
What is Blockchain?
Blockchain is a transaction record database that is distributed, validated and maintained around the world by a network of
computers. Instead of a single central authority such as a bank, a large community oversees the records in Blockchain, and
no individual person has control over these records.
Blockchain is based on decentralized technologies. This functions as a peer-to-peer (P2P) network.
Blockchain can be defined as “A peer-to-peer, decentralized, distributed ledger that records transactions efficiently, and in
a verifiable and robust fashion.”
Some real-life examples:

● Records of sale and purchase of raw material
● Bank account statements
● Excel sheets tracking hospital equipment
● A simple record-keeping book
Copyright © Blockchain Council www.blockchain-council.org 2

Understanding the Book Analogy
Consider Blockchain as a traditional book based ledger, where:
● Each page refers to a block connected to the previous page through a page number.
● It is easy to detect if a page/block has been removed or deleted.
● It is easy to arrange the pages/blocks and identify suspicious activity, because of the page number.
● It is impossible to tamper a previous entry in the ledger without someone noticing it, as the pages/blocks are built
tightly on top of each other.
“Book = Blockchain, Page = Block, An entry in page = Blockchain Transaction”
Book Blockchain
Pages Blocks
Entries in page Blockchain Transactions

History of Blockchain
W. Scott Stornetta and Stuart Haber in 1991, proposed the concept of a secured chain of blocks (set of records).
Later in 2008, the blockchain system was conceptualized and introduced by an individual or a community known by the
name 'Satoshi Nakamoto.'
They implemented the idea of using hashing in the blockchain framework to make it so safe that once saved in the
blockchain, no one can make modifications or erase the data. This blockchain architecture is used by the Bitcoin
cryptocurrency system as its basic or foundation infrastructure.

How does Blockchain works?

Block Overview

How Blockchain looks like?

What makes Blockchain different?

THANK YOU!
Any questions?
You can mail us at
hello@blockchain-council.org

Why is Blockchain a
Distributed, P2P Network?
Types of Network
CENTRALIZED DECENTRALIZED DISTRIBUTED
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Peer-to-Peer (P2P) Network
In a P2P network, there is no central governing authority.
All nodes in a P2P distributed network are equal to each other.
Anyone connected to the network is free to share and download any file shared by other users in the network.
Peer-to-Peer systems are classified as:
● Unstructured - No specific organization of the nodes. Participants communicate randomly with one another.
● Structured - Allows nodes to precisely search for files, even if the content is not available.
● Hybrid - Combines the conventional client-server model with some facets of the peer-to-peer architecture.
Server-based Vs Peer-to-Peer Network
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Distributed P2P Network - Blockchain
The traditional client-server network keeps all the required information in one place, which makes it easy to update. But the
network is controlled by a number of administrators with permissions.
In a distributed P2P network of blockchain architecture, each participant within the network maintains, approves, and
updates new entries.
The system is controlled by everyone within the blockchain network and not just by a single authority.
Each member ensures that all records and procedures are in order, which results in data validity and security.
The P2P architecture of blockchains provides benefits of greater security than traditional client-server based networks as
distribution of large numbers of nodes creates an immune system to the Denial-of-Service attack.
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Blockchain Vs
Cryptocurrrency
Blockchain Vs Cryptocurrency
A blockchain is a decentralized ledger of all transactions across a peer-to-peer network, whereas cryptocurrency is a medium
of exchange, created and stored electronically in the blockchain.
Basis of comparison Blockchain Cryptocurrency
Nature A technology that records The tools used in the virtual

transactions exchanges
Use Record transactions Make payments, investments,

storage of wealth
Value Have no monetary value Have monetary value
Mobility Can’t be transferred Can be transferred
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Cryptocurrency - Bitcoin
Bitcoin is a globally known Cryptocurrency and Digital Payment System. It was the first Decentralized Digital Currency whose
ledger is maintained by Blockchain, openly.
Bitcoin is an implementation of Blockchain distributed ledger technology and the transactions in Bitcoin Blockchain takes
place directly between users, without an intermediary.
Bitcoin is open-source; the architecture is public which means nobody owns or regulate Bitcoin but everybody can
participate in the network .
There are no physical Bitcoins, just balances stored on a public database that everyone has open access to, which is checked
by a vast amount of processing power along with all Bitcoin transactions.
Bitcoins are not distributed or funded as an asset by any banks or govts.
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Bitcoin Vs Govt.-Backed Currencies
Decentralized System: The control of Bitcoin is not under one central authority. The machines work together to mine this
currency and process transactions which make up a part of the network, without causing a fiasco by any central authority.
Simple Setup Process: Banks usually make you go through a lot of processes to open an account. However, the configuration
process of Cryptocurrency is straightforward and free.
Anonymous and Transparent Usage: Users can have many Bitcoin addresses without a link to any personal identifying
information. However, it records every transaction in a large ledger format called Blockchain.
Meagre Transaction Fee: Bitcoin charges a minimal fee for transfers.
Fast Network Process: The payment process is quick in Bitcoin network.
Non-Refundable: Once sent, Bitcoins cannot be refunded.
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Bitcoin as example
Who put the money in Bitcoin?
● No one
● The bitcoin value is created due to its enormous demand and the limited supply
● Let’s say if there exist only 100 golden color toy unicorns in this world and everybody wants it
● Then this 1 Unicorn can be worth millions of dollars
● We can technically trade using those golden toy unicorns
● This is precisely what is happening right now
● Bitcoin = Golden Unicorn Toy
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Bitcoin Mining
The method of generating new bitcoins through solving a cryptographic puzzle is Bitcoin mining. Miners have to solve a
complex computational math problem, known as Proof-of-Work. Bitcoin Mining requires massive amounts of energy and
sophisticated computing rigs.
Miners earn bitcoin from verifying transactions. For this, they must verify 1 megabyte (MB) worth of transactions. More
miners competing for a solution, more difficult the problem will become, and vice versa.
In order to preserve the database of transactions on which bitcoin is founded, bitcoin mining is needed.
Over the past few years, miners have become very sophisticated with complex equipment to speed up mining activities.
Bitcoin mining has two results. First, they obtain new bitcoin when computers solve these complicated math problems on
the bitcoin network. And second, bitcoin miners render the bitcoin payment network trustworthy and safe through checking
the transaction details by solving math problems.
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Types of Blockchain
Public Blockchain
A public blockchain is permissionless. In a public blockchain, anybody can access the network and read, write or participate
without an explicit authorization and permission.
A public blockchain is decentralized and has no single network-controlled entity.
Data on a public blockchain is protected because data cannot be changed or manipulated until it has been checked on the
blockchain.
Public blockchain has more complex rules and consensus algorithm for better security. It is computationally expensive to
mine and add a Block. Here, the computational power is also distributed globally.
Well-known examples of a public blockchain are Bitcoin and Ethereum.
2
Federated/Consortium Blockchain
A Consortium or Federated Blockchain is a private, permissioned blockchain - as opposed to public blockchain - where
entities can only become members of the network by prior approval or voting.
This kind of blockchain is group-owned system where sole autonomy is removed. Permissions are vested in a group of
companies or individuals.
Here, more than one central node is in-charge, that provide access to pre-selected nodes to read, write, and audit the
blockchain. Only consortium members can make, validate, and review transactions.
This sort of blockchain is suitable for use between companies that often have dealings with each other. While these are
more secure, they come at the cost of decentralization. However, this suits enterprise use cases and business processes.
Example: R3’s Corda Blockchain
3
Public Vs Private Vs Federated/Consortium
Public Blockchain Private Blockchain Federated/Consortium
Multiple Selected
Access Anyone Single Organization
Organizations
Permissionless and Permissioned and Permissioned and

Participants
Anonymous Known Identities Known Identities
● Consensus ● Pre-approved ● Pre-approved

mechanism Participants Participants
Security
● Proof-of-Work ● Voting-based ● Voting-based
● Proof-of-Stake Consensus Consensus
Transaction Speed Slow Lighter and faster Lighter and faster
4
Benefits of taking this Course
Prove your Blockchain skills & understanding.
Grasp a deeper understanding of NFTs & how it works.
Build your own NFTs for different business use-cases, with acquired knowledge.
What are different
Blockchain Technologies?
Bitcoin
Bitcoin is a globally known cryptocurrency and digital payment system. It was the first decentralized digital currency whose
ledger is maintained by blockchain openly.
Bitcoin is an implementation of blockchain distributed ledger technology and the transactions in bitcoin blockchain takes
place directly between users, without an intermediary.
Bitcoin is an open-source which means nobody owns or regulate bitcoin but everybody can participates.
There are no physical Bitcoins, just balances stored on a public database that everyone has open access to, which is checked
by a vast amount of processing power along with all Bitcoin transactions.
Bitcoins are not distributed or funded as an asset by any banks or govts.
2
Ethereum
Ethereum is also an open source software platform, based on Blockchain technology that enables developers to build and
deploy decentralized applications. It was initiated by Vitalik Buterin in late 2013.
It offers Decentralized Virtual Machine aka Ethereum Virtual Machine (EVM) which can execute scripts using an international
network of public nodes.
Development for Ethereum was funded by an online public crowdsale during July-August 2014, by buying the Ethereum
value token (Ether).
It allows us to create and run Smart Contracts and Distributed Applications (DApps) without any downtime, fraud, control, or
intervention by a third party.
Ethereum is not just a framework but also a programming language running on a blockchain that lets developers create and
publish distributed applications.
3
Hyperledger
Hyperledger is a multi-project open source blockchain platform created to advance cross-industry blockchain technologies.
It is a global collaboration, hosted by The Linux Foundation, including leaders in Finance, Banking, Internet of Things, Supply
chains, Manufacturing, and Technology.
Hyperledger acts as an operating system for marketplaces, data-sharing networks, micro-currencies, and decentralized
digital communities.
It has the potential to vastly lessen the expense and complications in getting things done in the real world.
It serves as a neutral home for various distributed ledger frameworks including Hyperledger Fabric, Sawtooth, Indy, as well
as tools like Hyperledger Caliper and libraries like Hyperledger Ursa.
4
NEO
NEO was initially called AntShares (ANS) which was launched in 2014, founded by Da Hongfei and Erik Zhang. Antshares
announced on June 22, 2017 that it planned to rebrand itself as NEO.
NEO is a smart economy for the distributed network.
The first ICO on the NEO blockchain, Red Pulse Token (RPX) was announced soon after the rebranding finished.
Apart from the NEO cryptocurrency itself, it has another crypto-token called “GAS” which was formerly known as
“ANC-Antcoins”.
The core of the NEO feature set revolves around instruments that allow developers to deploy and scale smart contract
applications on the NEO blockchain efficiently.
The goal of the project after its rebranding to NEO from Antshares in 2017 is to realize a "smart economy" through the use of
blockchain technologies and smart contracts to issue and control digitized assets.
5
EOS
EOS is the leading open-source blockchain platform that enables transparency in transactions at the speed and scale needed
to solve real-world challenges.
EOS is an operating system for marketplaces, data-sharing networks, micro-currencies, and decentralized digital
communities.
EOS blockchain is aiming to become a decentralized operating system which can support industrial-scale decentralized
applications.
EOS is planning to remove transaction fees.
It claims to have the ability to conduct millions of transactions per second, and it runs on DPOS consensus algorithm.
6
Corda
Corda is a distributed ledger open source platform for businesses. It is among the most sophisticated platforms to enable the
implementation of enterprise blockchain applications.
It is not a blockchain and also not a native cryptocurrency.
Nodes here are arranged in an authenticated peer-to-peer network with no message broadcasting.
Corda is not stuck to any particular consensus algorithm, as one Corda network may contain multiple notaries that provide
their guarantees using a variety of different algorithms.
Corda promises that the data is only exchanged with parties who have a 'need to know.’ It was designed to add transparency
and confidence, while preserving privacy and protection with ongoing interactions.
7
Quorum
Quorum is an open-source, permissioned implementation of Ethereum supporting transaction and contract privacy.
It is an enterprise-focused version of the Ethereum Blockchain, developed by J.P. Morgan. It is an ideal application for high
speed and high throughput processing of private transactions.
It is a fork of the 'geth' public ethereum client with many changes in protocol level to support business needs. The primary
aim of the Quorum project is to build an ethereum client enterprise that empowers enterprises to accept blockchain
technology and benefit from it.
Quorum has many business functions, which are listed below, relative to public ethereum.
● Transaction privacy
● Multiple pluggable consensus mechanisms suitable for enterprise use cases
● Enterprise-grade permissions management (access control) for network nodes and participants
● Enterprise-grade performance
8
Tabular Representation
Characteristics Bitcoin Ethereum Hyperledger Corda Quorum
Programming Solidity(JavaScript,C++,
C++ Golang, Java Java, Kotlin Solidity
Language Python)
Decentralized P2P
Administration No administration Linux Foundation R3 Consortium J.P Morgan
Network
Smart Contracts No Smart Contracts No legal binding No legal binding Legally binded Legally binded
Proof-of-Work/ Based on notary RAFT

Consensus Algorithm Proof-of-Work PBFT
Proof-of-Stake nodes Istanbul BFT
Scalability issue Increased with

Scalability Scalability issue exists Highly scalable Highly scalable
exists transactions
Issue with privacy Issue with privacy Identity Identity Identity

Privacy
protection protection management service management service management service
No native No native No native

Currency Bitcoin Ether
cryptocurrency cryptocurrency cryptocurrency
9
Benefits of using
Blockchain Technology
No Third-Party Intermediaries
Blockchain can help to make the process of intermediation more efficient.
There are a set of rules and cryptographic algorithms that eliminate the need to trust the third party.
Blockchain minimizes the trust required of ecosystem participants of these intermediaries in any number of ways.
2
Greater Transparency
Blockchain can go for a complete decentralized network where there is no need for a centralized authority, which improved
the transparency.
As it is a distributed ledger, all network participants share the same documentation as opposed to individual copies.
Once the data has been written on a blockchain, no one, not even a system administrator, can change it.
As a data provider and recipient, user can prove that the data hasn’t been altered.
3
High Availability
Highly available due to decentralisation.
Any number of nodes can go down without affecting the Blockchain.
Protects institutes from DOS attacks.
4
High Security
All transactions on a blockchain are cryptographically secured and provide integrity.
Each block is connected to all the blocks before and after it.
It is difficult to tamper a single record because a hacker would need to alter all of the preceding blocks because of the
interdependency of the blocks.
Network participants have their private keys that are assigned to the transactions they make and act as a personal digital
signature.
5
Faster Dealings and Cost Savings
Blockchain removes third-party intermediaries and overhead costs for exchanging assets, that reduce transaction fees
significantly.
Blockchain allows quicker settlement of trades as it does not require a lengthy process of verification, reconciliation, and
clearance.
6
Improved Traceability
Blockchain enables every party to trace the goods and ensure that it is not being replaced or misused during the process.
Blockchain helps to easily locate any problem and correct if there is any, and creates an irreversible audit trail.
Historical transaction data can help to verify the authenticity of assets and prevent fraud.
7
Understanding
Tokens
What are Tokens?
A token is a thing that serves as a tangible representation of a fact, quality and can be anything of value.
Tokens are not limited and restricted to one specific role; rather, they can fulfill several roles in their native
ecosystem.
Tokens can serve various purposes; for example, they can act as a gateway to decentralized applications
(DApps).
Moreover, they can also qualify the holders to have certain voting rights.
Significance of Tokens
Tokens are not confined to a particular role; hence they could address multiple functions within their native
ecosystem such as:
● Tokens can be used as entry points for Blockchain applications, and users will require tokens to use the
decentralized applications.
● Individuals' qualifications for possessing specific voting rights could potentially be represented via tokens.
● Tokens also act as suitable entities for enhancing the holders' user experience.
● Tokens can be used as a store of value for internal and external transactions in a certain ecosystem, as
well as provide a different type of monetary system, such as digital assets.
● The exchange of value is another important use of tokens.

Crypto Tokens
Crypto Tokens are special kind of virtual currency tokens that reside on their own Blockchains and represent an
asset or utility.
These tokens may be used for trading, storing value, and making transactions.
Crypto tokens, which are created by an initial coin offering, are often used to raise funds for crowd purchases.
Benefits:
● Usability
● Transparency
● Cost and Speed of Exchange
How Crypto Token Works?
Fungible and Non-Fungible Tokens
Fungible Tokens
These are those types of cryptographic tokens that are basically identical or uniform and can be interchanged
with other fungible tokens of the same type without any issues. Such tokens relate to the things we use every
day, and it applies to real-world assets as well as digital assets.
Non-Fungible Tokens
Non-fungible tokens are special tokens that represent unique, collectible items. They are unique in the sense that
they cannot be split or exactly changed for other non-fungible tokens of the same type.
Fungible Vs. Non-Fungible Tokens
Ethereum Token
Standards
What are ERC standards?
A document called a "Ethereum Request for Comments" (ERC) is created by smart contract programmers who
use the Ethereum blockchain platform. They lay out the principles that Ethereum-based tokens must follow in
these document.
The Ethereum community reviews these papers using a method known as the "Ethereum Improvement Proposal
(EIP)."
After going through the EIP (Ethereum Improvement Proposal)

process, the Ethereum community approves some of these
reports, finalizes them, and developers adopt them.
An Ethereum Improvement Proposal (EIP) is a design document

that informs the Ethereum community or describes a new
function for Ethereum, its systems, or its ecosystem.
Different ERC Standards
What are ERCP-20 Standards?
ERC-20 tokens are a collection of similar tokens with the same set of properties. They adhere to the ERC-20
standard, which establishes a set of guidelines for the development and management of fungible tokens.
The use of ERC - 20 tokens allows for the development of micro-economies with liquid markets for a variety of
applications.
Fabian Vogelsteller proposed the ERC-20 Standard in November 2015 that implements an API for tokens within
Smart Contracts.
It includes features such as the ability to move tokens from one account to another, as well as the ability to see
an account's current token balance and the overall availability of the token available on the network.
Its other features include approving the use of a certain amount of token from one account by a third-party
account.
Trading ERC-20 Tokens
ERC-20 tokens may be exchanged on a variety of websites, including:
● Regular exchanges
● Decentralized exchanges
● Automated liquidity pool, which can facilitate smooth token swapping by utilizing Automated Market Making
algorithms to decide the price of purchasing ERC-20 tokens.
ERC-721 Standard
Each ERC-721 token is associated with its own collection of properties and values.
Being one of a kind increases the value of ownership, particularly in the case of highly sought after tokens.
The ERC-721 protocol is a standard that must be implemented for any smart contract that produces ERC-721
tokens.
NFTs can be interacted with using a variety of features, including:

● Identifying the ERC-721 token's owner address
● Approval of an ERC-721 token transfer. Each address to which we want to transfer must be accepted
before the transfer can begin.
● Checking an ERC-721 token's accepted addresses.
● ERC-721 Token Transfer.
ERC-721 Standard
Each ERC-721 token is associated with its own collection of properties and values.
Being one of a kind increases the value of ownership, particularly in the case of highly sought after tokens.
The ERC-721 protocol is a standard that must be implemented for any smart contract that produces ERC-721
tokens.
NFTs can be interacted with using a variety of features, including:

● Identifying the ERC-721 token's owner address
● Approval of an ERC-721 token transfer. Each address to which we want to transfer must be accepted
before the transfer can begin.
● Checking an ERC-721 token's accepted addresses.
● ERC-721 Token Transfer.
Trading ERC-721 Standard
ERC-721 tokens can be exchanged for other tokens or Ether in the same way that ERC-20 tokens can.
Automated Market Making algorithms are not possible to apply since all ERC-721 tokens have unique properties.
At the moment, the agreed method of trading them is to auction or exchange them on NFT-specific peer-to-peer
marketplaces, the most famous of such marketplaces is OpenSea.
This generates new economies for digital collectibles, as well as remarkable figures for a new form of asset:
● The top three types of NFTs have a trading rate of over 1,000 Ether in a single day.
● Another VR simulation, Decentraland, has a total volume of 44,000 Ether divided among 3,662 owners.
This equates to a 12 Ether average possession of LAND estate.
● An F1 gaming object worth 415.9 Ether was the most expensive NFT offered in 2019.
Merkle Tree and Hashing
Markle Tree
A Merkle tree is a hash-based data structure wherein each leaf node is a hash of a data block, and each non-leaf node is a
hash of its offspring. Merkle trees usually have a factor of branching 2, which means that each node has up to 2 children.
The Merkle trees are used for effective data validation in distributed systems. They are secure because instead of using
complete files, they use hashes. Hashes are ways to encrypt files that are slightly smaller than the real file.
The verification of integrity is substantially reduced despite of larger data size.
It requires little disk space or memory as the proofs are computationally fast and easy.
Markle Tree
Why Merkle Tree is vital in Blockchain?
For confirming a past transaction, a node would need to reach out to the network in order to get copies of the ledger from
its peers.
The node would need to compare each entry line by line.
Any discrepancy between the ledgers, compromise the security of the network.
Every verification request would require large packets of information to be sent over the network.
A lot of processing power is consumed to compare the ledgers, to ensure that there had been no changes.
Hashing
● Hashing is the process of having an input item of any length, converting it into an output item of a fixed length.
● Transactions of different lengths are run through a given hashing algorithm, and all give an output of a fixed length,
called as hash.
● Hash size will depend on the hash function used, but the output using a particular hashing algorithm will be of a
specific size.
● Cryptographic hash functions are one of the most important techniques in the field of cryptography and are used to
accomplish many safety goals such as authentication, digital signatures, generation of pseudo numbers, digital
steganography, digital time-stamping, etc.
● Commonly used hashing algorithms is Bitcoin’s Secure Hashing Algorithm 256, often known as SHA-256.
Blocks, Wallets and Addresses
Blocks
A Block is the the smallest unit of a blockchain.
Block is differentiated into:

● Block Header
● Block Body
Block header is divided into six components:

● Version number
● Previous block hash
● Merkle tree root hash
● Nbits
● Nonce
● Timestamp
Block Body contains all the transactions.

Blocks
Every block contains a hash of the all the previous block.
This has the effect of generating a series of blocks from the genesis block to the present block.

Wallets
A blockchain wallet is a software program that enables users to buy, sell, and monitor balance for their digital currency or
assets.
A wallet stores private and public keys for a user.
A blockchain wallet allows anyone to quickly share assets. Transactions, as they are signed cryptographically, are safe.
The wallet can be accessed from web browsers, even from the mobile phones, and the user's privacy and identities are
protected.
A blockchain wallet offers all the features available for safe and secure transactions and exchanges of funds between various
parties.

Blockchain Wallet Features
Simple to use - It's almost like the other app or a wallet that you use for your everyday purchases.
Completely secure - Wallet is said to be secure as it keeps your private key secure.
Enables instantaneous transfers across geographies - Transfer of funds do not have any geographical barrier.
Low Transaction fees - There is a significantly smaller cost of exchanging funds than the conventional banks.
Enable multi-cryptocurrency transfers - It makes you do basic currency conversions.

Wallet Types
There are two types of wallet used in Blockchain:
Hot Wallet: Hot wallets are online wallets through which it is easy to quickly transfer cryptocurrencies. Private keys in the
hot wallet are stored in the cloud for quicker transfer. Hot wallets can be easily accessible 24/7 online and can be accessed
from a laptop or mobile computer, but if compromised, there is a chance of unrecoverable theft.
Examples: Coinbase and Blockchain.info
Cold Wallet: Cold wallets are offline digital wallets where the transfers are digitally signed and then electronically disclosed.
Private keys are kept in independent hardware that is not connected to internet or the cloud, but stored on a paper
document. The cold wallet transaction approach helps to shield the wallet from unauthorized entry.
Examples: Trezor and Ledger

Address
A blockchain address is pretty much like an email address which is a special sequence of numbers and letters and functions.
It applies to a particular network destination where it is possible to transfer the cryptocurrency. The idea is to send a person
a unique address every time he or she receives crypto.
Address is a placeholder to accept and send blockchain transactions.
Pay-to-IP had been abandoned in Bitcoin, Pay-to-Public Key Hash became the new standard format for Bitcoin addresses.
A standard P2PKH address has something like 34 signs and starts with a “one”.
If you paste an address in your bitcoin wallet, it scans the prefix and calculates the checksum. It refuses the address if it
doesn't fit. It is difficult to transfer funds to an incorrect address because of a typing mistake.

THANK YOU!
Any questions?
You can mail us at
hello@blockchain-council.org

Public and Private Key
Public Key
A public key functions on the basis of asymmetric encryption. In this type of encryption, two keys are used - one key is used
for encryption and another key is used for decryption.
Security is ensured because only the person with the relevant private key can decode the message. Public key is made
available through the public accessible directory.
Public key is derived from Private key using known algorithm.
A shorter representative version of the public key is the address that is used for receiving funds.
Private Key
A private key allows users to access his or her cryptocurrency. Same secret key is used for encryption and decryption.
Private key can take few different forms, depicted as a series of alphanumeric characters, which makes it hard for a hacker to
crack.
If a user loses its private key, they can no longer access the wallet to spend, withdraw, or to transfer coins.
The Blockchain wallet dynamically creates private keys for you and stores them. The app signatures the transaction with your
private key as you send from a Blockchain wallet (without explicitly revealing it), which signals to the whole network that you
have the ability to transfer the funds to the address from which you are sending.
Public Vs Private Key
Public Key Private key
Nature Asymmetrical Encryption Symmetrical Encryption
Remains in the confidential use

Accessible Available to everyone of
sender and receiver
Speed Slower Faster
Can be generated from private

Generation Cannot be generated
key
4
Cryptography and Cryptographic
Algorithms
What is Cryptography?
Cryptography is a technique to secure data by writing or generating codes that make the information unreadable for the
unauthorized individual.
It is derived from mathematical concepts and a set of rule-based calculations.
Cryptographic Algorithms usually involves three things:

● Cryptographic Key Generation
● Digital Signing
● Verification to Protect Privacy
Modern Cryptography includes Confidentiality, Integrity, Non Repudiation and Authentication.

Types of Cryptography
There are various types of Cryptography:
Symmetric Key Cryptography: It is an encryption scheme where a single common key is used by the sender and recipient of
messages to encrypt and decrypt messages. Symmetric Key Schemes are quicker and easier, but the issue is that in a secure
manner, sender and recipient have to swap key somehow. The Data Encryption System (DES) is the most common symmetric
key cryptography system.
Asymmetric Key Cryptography: Under this scheme, information is encrypted and decrypted using a pair of keys. For
encryption, a public key is used and a private key is used for decryption. The private key and the public key are unique. Even
if the public key is known by everyone the intended receiver can only decode it because he/she alone knows the private key.
Symmetric Key Cryptography
Symmetric key cryptography creates a fixed length of bits which is known as a block cipher.
Block cipher usually encrypts one block of the bit rather than a single bit.
Block encrypted with one key cannot be decrypted with another symmetric key.
Symmetric-Key Cryptography is useful:

● When the algorithms are inexpensive to process.
● When the keys tends to be much smaller for the level of protection.
● When the user doesn't need to experience any time delay in the process of encryption and decryption.
Different kinds of Symmetric Key Cryptography algorithms are AES, DES, 3DES, Salsa, Seed, Aria.
Symmetric Key Cryptography
.
Asymmetric Key Cryptography
Asymmetric-Key Cryptography usually works with two pair of keys, i.e. Public Key and Private Key.
Public key can be shared or published to other individuals, private key must remain secret from others, as that same private
key can only decrypt data encrypted by that same private key.
At present in Asymmetric-Key Cryptography there are typically two sized

● 1024 bits
● 2048 bits
Few types of asymmetric-key cryptography are Diffie Hellman, Digital Signature Algorithm, Elgamal, Elliptic Curve
Cryptography, and many more.
Asymmetric Key Cryptography
Algorithms used in Blockchain Technology
Blockchain is a distributed database existing on various computers with a decentralized ledger tracking digital assets on the
P2P network.
Two types of cryptographic algorithms are used for Blockchains - Asymmetric-key algorithms and Hash functions. Hash
functions are used to provide any participant with the functionality of a single view of the blockchain. Generally, blockchains
use the hashing algorithm SHA-256 as their hash function.
Blockchain is guarded by various Cryptographic Algorithms, namely:

● SHA256
● Elliptic Curve Cryptography (ECC)
● RIPEMD160
SHA-256
● Secure Hash Algorithms (SHA) are a family of cryptographic functions designed to keep data secure. It operates by
using a hash function to transform the data: an algorithm consisting of bitwise operations, modular additions, and
compression functions.
● A fixed-size string that looks nothing like the original is then generated by the hash function. These algorithms are
designed to be one-way functions, ensuring that it is nearly difficult to convert them back into the original data until
they are converted into their respective hash values.
● SHA-1, SHA-2, and SHA-3 are a few algorithms of this type, each of which was successively built in reaction to hacker
assaults with progressively stronger encryption. Because of the commonly revealed bugs, SHA-0, for example, is now
redundant.
Elliptic Curve Cryptography
In 1985, Neal Koblitz and Victor Miller independently suggested cryptography based on elliptic curves.
ECC is a strong cryptographic approach and is an alternative technique to RSA. It generates security through the
mathematics of elliptic curves between key pairs for public key encryption.
ECC as well as RSA, is based on private-public key cryptography. However, with smaller key sizes, ECC provides the same
security as RSA offers. It is less computer-intensive because ECC has smaller key sizes, so it is suitable for mobile devices and
networks.
RIPEMD 160
RIPEMD 160 stands for RACE Integrity Primitives Evaluation Message Digest.
RIPEMD160 is a cryptographic function which is also based on Merkle-Damgard just like SHA-256.
Compression Function and Padding are the backbones of the RIPEMD160.
RIPEMD 160 is made up of 5 blocks that run 16 times which further adds up to 80 stages.
It is somewhat similar to SHA-256, but it is comparatively slower than the SHA-256.
There are four types of RIPEMD algorithms:

● RIPEMD-128
● RIPEMD-160
● RIPEMD-256
● RIPEMD-320
Transaction Execution and
Distribution
Transaction
A transaction is a new record of exchange of some value or data between two public addresses of the blockchain .
Transactions can happen in new node and takes time to get verified when a new block is created containing that
transactions.
Transactions are data structures that encode the transfer of value between participants in the bitcoin System.
The process of transaction verification and recording is immediate and permanent.
Transaction is approved through a process known as consensus.
Although most transactions are organized as address payments (based on a script called Pay-to-Public-Key-Hash, or P2PKH),
bitcoin transactions may also use other forms of scripts, besides addresses and amounts, and contain additional details.
How Transaction is Committed?
Stage 1: Initiation of transaction proposal
Stage 2: Transaction is broadcasted
Stage 3: Transaction is verified
Stage 4: Transaction Commitment.

How transaction is committed?
Stage 1: Initiation of transaction proposal
At initial stage, transaction is created and signed by the owner.
Stage 2: Transaction is broadcasted

At this stage, transaction is broadcasted to the network.
Stage 3: Transaction is verified

Once the transaction is broadcasted to the network, other authorized nodes verify it. If transaction is
valid, it is added to a Block, and if not, nodes reject the transaction.
Stage 4: Transaction is committed

Finally the Block is added to the Blockchain, and transaction is committed.
Components of Blockchain
Ecosystem
Components of Blockchain Ecosystem
Blockchain Projects
The Blockchain ecosystem is currently running with some major projects and more are under pipeline.
Some of the major projects on Blockchain are:

● Bitcoin - The project that introduced the world to Blockchain.
● Ethereum - This project came with the concept of Smart Contracts where two parties adhere to certain rules and
create a trust.
● Neo - This project positioned itself as the “Chinese Ethereum,” but it brought the Python as the main language for the
creation of applications.
● Stellar - The project Stellar tries to make cross border transactions simpler. Stellar comes with extensive APIs which
helps the developers build applications fast, thus reducing the time to market for the applications.
Blockchain Users
Blockchain users are normal people, who make use of the blockchain or cryptocurrency to achieve some results.
For creating a Blockchain userbase, the technology or cryptocurrency should have some utility related to the problem being
tackled.
Bitcoin was the first mover in Blockchain and it’s high utility as payment system made sure that a large part of its ecosystem
is based upon users.
Blockchain Exchanges
Every Blockchain project has a robust ecosystem working under it, that includes a decentralized exchange.
Exchanges are developed by the Blockchain team or the community of other developers.
It is designed to find the cheapest rates of exchange between any two cryptocurrencies, making it more affordable to trade
tokens or cryptocurrencies.
Exchanges used for trading also might integrate with hardware wallets, or users can create their own wallet on the exchange
website.
Blockchain Miners
Blockchain requires a large network of independent nodes around the world to maintain it continuously.
In private blockchains, a central organization has the authority over every node on the network.
In public blockchains, anyone can set up their computer to act as a node and these computers are called miners.
Different blockchains utilize different mining systems however most of them contain some form of:
● An incentive system
● A consensus algorithm
Blockchain Developers
Blockchain technology is built by the potential of developers working behind it.
Currently there are two types of developers in the blockchain ecosystem:

● Blockchain developers
● dApp developers
Blockchain developers build new blockchains with different levels of functionalities and Consensus Algorithms.
Smart Contracts opened many possibilities for developers to create extensive applications for different industries.
Blockchain Applications
Industries, developers and communities build blockchain applications to serve a specific purpose.
There are various examples of applications being built on Blockchain, some of the major working applications are:
● Humaniq - A fintech startup which connects unbanked people with global economy.
● Augur - A peer-to-peer oracle and prediction market place.
● Etheroll - Ethereum powered trustless betting platform.
● CryptoKitties - Blockchain based game centred around breedable, collectible, and digital assets.
● Golem - Ethereum startup aimed at decentralizing CPU processing.
Blockchain Architecture
Enterprise and Legacy Applications: Applications that are developing or already implemented in the blockchain solution,
and have some extensive features.
Integration Platforms: Layer with different kinds of protocols like the SOAP and REST, governance, and API management.
Blockchain Access layer: It provides the basic features to fetch and write data to the blockchain.
Analytics Layer: It consists of reporting, dashboard or analytics-based system that provides the analytical result of the final
data.
Hyperledger Architecture
What is Blockchain
Mining?
What is Mining?
Mining is the process of recording the pending transaction by adding a new Block into the Blockchain through a
mathematical puzzle. Miners get rewarded for by receiving the new crypto coins of that Blockchain.
Mining rewards are given to the miner who first finds the solution to a complicated hashing problem, and the chance of a
miner finding the solution is proportional to the portion of the network 's overall mining capacity.
You need to satisfy two requirements to win rewards.
1) You have to check transactions worth ~ 1 MB.

2) To arrive at the right answer to a numeric question, you must be the first miner. This is known as Proof-of-Work.
In order to set up a mining rig, you need either a GPU (Graphics Processing Unit) or an Application-Specific Integrated Circuit
(ASIC).
2
How mining is performed?
3
Longest Chain Rule
A blockchain with more blocks will consume more energy to build than a chain with fewer blocks.
Nodes follow the longest chain rule. It is measured by a metric called chainwork. Longest chain rule protect blocks that are
already mined on to the blockchain. It resolve disagreements when two blocks are mined at the same time.
The Longest Chain Rule states that if one chain gets longer at some later stage in history, all participants must immediately
switch to it.
Under this rule, it is possible to argue that one branch sooner or later would automatically win over the other because of the
probabilistic existence of the mining process.
4
Types of Mining
Types of Mining
Mining can be divided into two types:
● Solo Mining:
○ Each miner will set up the hardware and register himself for mining.
○ The first miner to find the solution informs all the other miners that he has found the solution.
○ In Solo mining, there is no interruptions from other miners.
○ Mining rewards does not have to be shared.
● Pool Mining:
○ A single miner does not have enough resources to mine the Blockchain.
○ These miners combine their resources to mine the Blockchain faster.
○ Lower costs of mining, due to economies of scale.
○ Smoother income distribution.
○ Generating a higher income potentially.
2
Solo Mining
3
Pool Mining
4
Who are Miners ?
Who are Miners?
Miners validate new transactions and record them on the blockchain. They work like a record keeper who keep the system
updated of new payments and the existing ones.
Miners add the transaction to the blockchain as well. But if all the miners add the transaction to the blockchain at the same
time, several records of the same transaction would be available. So, to validate a block, they race each other.
The blocks are encoded with an encryption algorithm. This encryption is called a hash. So if you want to add a block, you
need to solve the hash by inserting the correct key.
This key is actually worked out by the miners with pure guess. They don't have to do it themselves, the computing power of
the computers is used to come up with the encryption solution. So, to fit the encryption, the machines come up with a
sequence of different variations.
The first miner to overcome the hash gets to add the block to the blockchain. The transactions gets successful when the
nodes on the network accept the new block. The miners get rewards for adding the block.
2
Tasks of Miners
3
Mining Algorithm
Retrieve previous block's header from the bitcoin network.
Assemble a set of transactions broadcasted on the network

into a block to be proposed.
Compute the double hash of the previous block's header.
Check if the resultant hash is lower than the current difficulty

target then PoW is solved.
If the resultant hash is not less than the current difficulty target,
then repeat the process after incrementing the nonce.
4
UTXO Model Vs
Account Model
Transaction - UTXO Vs Account Model
It is necessary for a digital money to be transferable in order for it to be useful. The transaction is created when
the owner initiates the transfer of funds on a blockchain. This transaction informs the network of the amount of
money changing hands and the identity of the new owner.
Blockchain's sole purpose is to keep track of past events and user interactions.
The system goes through a state transition with each new block.
Any blockchain, regardless of whether it follows the UTXO or account model, goes through a state transition.
The user interactions, which are mainly transactions, are broadcasted to the network, and a set of them are
recorded forever with each new block.
When the system transitions to a new state, the balances of the transacting parties are updated.
UTXO Vs Account Model
UTXO Model
At the protocol level, the UTXO model is devoid of accounts and wallets. Individual transactions, clustered into
blocks, form the basis of the model. This can be compared to those who have a certain amount of cash in their
possession.
● A user with 50 BTC may have control over a single UTXO worth 50 BTC or a collection of UTXOs worth 50
BTC
● If a person has $50 in currency, he might have a single $50 bill or a mixture of smaller denominations.
When a user does not wish to transfer the whole amount of a UTXO, the difference between the UTXO size and
the amount the user is willing to spend is transmitted as a change to a self-controlled address.
● Spending 10 BTC from a 50 BTC UTXO results in two outputs in the transaction: a 10 BTC output to the
payee and a 40 BTC shift output to the original owner.
● Spending $10 on a $50 bill entails sending the money to the payee and getting $40 in change in exchange.
UTXO Model
State Transitions in the UTXO Model
Account based Model
In the account-based transaction model, assets are represented as balances inside accounts, equivalent to bank
accounts. This transaction model is used by Ethereum. There are two kinds of accounts:
● Private key controlled user accounts

● Contract code-controlled accounts
In the account-based paradigm, a transaction causes nodes to decrement the sender's account balance and
increase the receiver's account balance. Each transaction in the account model has a nonce tied to it to avoid
replay attacks. When a payee broadcasts a fraudulent transaction, they are paid twice.
In order to resist this behavior, each account in Ethereum has a public viewable nonce that is incremented by one
with each outgoing transaction. This stops transfers from being sent to the network several times.
State Transitions in the Account Model
What are Smart Contracts ?
Smart Contracts
A smart contract is a term used to describe computer program code that is capable of facilitating, executing, and enforcing
the negotiation or performance of an agreement using Blockchain technology.
The entire process is automated can act as a complement, or substitute, for legal contracts, where the terms of the smart
contract are recorded in a computer language as a set of instructions.
In general, smart contracts help you exchange money, property, shares, or anything of value in a transparent, conflict-free
way while avoiding the services of a middleman.
They often function as escrow facilities, ensuring that all the money and the right of ownership can be deposited in the
scheme and transferred at precisely the same time to the participating parties.
A smart contract can operate on its own, but it can also be enforced along with any variety of other smart contracts.
2
Smart Contracts
A contract between the parties A triggering event like an Regulators can use the blockchain to
is written as code and published expiration date or strike price is understand the activity in the
into blockchain. Individuals hit, and the contract executed market while maintaining the
involved are anonymous, but the itself according to the coded privacy of individual actors
contract is visible in public terms. positions.
ledger.
3
Traditional Contract Vs Smart Contract
Traditional physical contracts, such as those created by Smart contracts, often created by computer
legal professionals today, contain legal language on a programmers using smart contract development tools.
vast amounts of printed documents.
They are entirely digital and written using programming
Traditional physical contracts heavily rely on third parties code languages such as Solidity, C++, Go, Python, Java.
for enforcement. They can be misinterpreted.
Code defines the rules and consequences, stating the
obligations, benefits and penalties which may be due to
either party in various different circumstances.
This code can then be automatically executed by a

distributed ledger system.
4
How Smart Contracts Work
STEP 3: EXECUTION
One of the computers in this network STEP 1: CODING
of distributed ledgers receives the Smart Contracts are mostly written
code, and then each node comes to in Solidity. It is imperative that they
an individual agreement on the do precisely what the parties want
results of the code. them to do.
The network would then update the This is achieved by inputting the
distributed ledgers to record the proper logic when writing your
execution of the contract, and then smart contract.
monitor for compliance with the The code behaves in predefined
terms of the smart contract. ways and doesn’t have the linguistic
nuances of human languages.
STEP 2: DISTRIBUTED LEDGER

The code is encrypted and sent out to other computers via a
distributed network of ledgers
5
Components of Smart Contract
Smart Contract Code: The code that is stored, verified and executed on a blockchain.
Smart Legal Contracts: A smart contract that articulates and is capable of self-executing, on a legally-enforceable basis.
6
What is Consensus ?
What is Consensus?
Consensus mechanisms make sure all nodes are synchronized with each other and agree on which transactions are
legitimate and are added to the blockchain.
Consensus algorithm may be defined as the mechanism through which a blockchain network reaches consensus.
A decentralized system without a common consensus will fall into pieces in a second.
Consensus assure that the protocol rules are being followed and guarantee that all transactions occur in a trustless way.
There are some specific goals in the Blockchain consensus protocol, such as agreement, collaboration, cooperation, equal
rights for each node, and mandatory participation of each node in the consensus process.
2
Byzantine General Problem
Byzantine Generals Problem was a logical dilemma that illustrates how a group of Byzantine generals may have
communication problems when trying to agree on their next move.
They are facing two very distinct problems:

● The generals and their armies are very far apart, so centralized authority is impossible, that makes coordinated attack
very tough.
● The city has a huge army, and the only way that they can win is if they all attack at once.
3
Types of Consensus Algorithms
4
Types of Consensus
Algorithms
Proof-of-Work (PoW)
In Proof-of-Work, miners compete to solve a difficult mathematical
problem based on a cryptographic hash algorithm.
Miner did spend a lot of time and resources to solve the problem.
When a block is 'solved’, the transactions contained are considered

Confirmed.
Miners receive a reward when they solve the complex mathematical

problem.
2
Proof-of-Work (PoW)
Transaction is validated after mining.
Valid data includes:

● Block header hash is less than the target.
● Block size is within acceptable limits.
● Block timestamp is less than two hours in the future.
● The first transaction is a coinbase transaction.
● The coinbase transaction has a valid reward.
● Valid transactions within the blocks.
● If the block is valid, the other miners will update their own copy of the blockchain with the new block.
3
Proof-of-Stake (PoS)
Proof-of-Stake is a different way to validate transactions and achieve distributed consensus.
Unlike the Proof-of-Work, Proof-of-Stake chooses the creator of a new block in a deterministic way, depending on its wealth,
also defined as stake.
No block reward.
Also, all the digital currencies are previously created in the beginning, and their number never changes that is PoS system;
there is no block reward.
Miners take the transaction fees, that is why PoS system miners are called forgers, instead.
4
Delegated-Proof-of-Stake (DPoS)
People in a particular cryptocurrency community vote for witnesses to secure their computer network.
People’s vote strength is determined by how many tokens they hold.
People who have more tokens will influence the network more than people who have very few tokens.
If a witness starts acting strange or stops doing a quality job securing the network, people in the community can remove
their votes, essentially firing the bad actor.
Delegates are elected in a manner similar to witnesses.
5
Proof-of-Importance (PoI)
In proof-of-importance, every account on the blockchain is assigned an importance score.
The score will influence how individual users can “harvest” the blockchain. One could say harvesting on the blockchain is
almost the same as what miners do on the Bitcoin blockchain.
The objective is to add people’s transactions to the blockchain, in exchange for a small financial reward.
To be eligible for the “importance calculation,” users need to have at least some currency in their balance.
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Proof-of-Elapsed Time (PoET)
Proof-of-Elapsed-Time (PoET) is designed to improve proof-of-work consensus and provide an alternative for permissioned
blockchain networks.
It removes the need for the mining-intensive process and replaces with a randomized timer system for network participants.
PoET consensus can be broken down into two phases:

● Joining the network and verification
● Elapsed time, randomized lottery selection process.
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Practical Byzantine Fault Tolerance (pBFT)
In the late 1990s, Practical Byzantine Fault Tolerance (pBFT) consensus algorithm was developed by Barbara Liskov and
Miguel Castro.
pBFT protects against Byzantine faults and looks for optimization of aspects of Byzantine Fault Tolerance.
In pBFT, each ‘general’ manages an internal state which is an ongoing information status.
A consensus decision is made based on the total number of decisions submitted by all the generals.
pBFT was designed to operate efficiently in asynchronous (no upper bound on when response to request is received)
systems.
It forces a low overhead on the performance of the replicated service.
8
Delegated Byzantine Fault Tolerance (dBFT)
Delegated Byzantine Fault Tolerance or dBFT is a consensus mechanism introduced by a cryptocurrency called NEO.
dBFT method is closer to PoS rather than PoW, by utilizing a voting system to choose delegates and speaker.
Citizens that are NEO tokens holders or ordinary nodes, Delegates are the bookkeeping nodes with specific requirements,
and Speaker is the randomly chosen delegates.
The dBFT 's voting mechanism provides for large-scale participation, close to the consensus of the Delegated Proof-of-Stake.
This means that by a referendum, the holder of a NEO token will help a particular 'bookkeeper'.
Absolute finality is one of the strongest points of using the dBFT mechanism. A block can not be bifurcated until final
validation, so the transaction cannot be revoked or rolled back.
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Simplified Byzantine Fault Tolerance (sBFT)
The Simplified Byzantine Fault Tolerant (SBFT) consensus algorithm implements an adopted version of the Practical
Byzantine Fault Tolerant algorithm.
The basic idea involves a single validator who bundles proposed transactions and forms a new block.
The Consensus is achieved as a result of a minimum number of other nodes in the network ratifying the new block.
Nodes are clustered with increasing authority in delegations. The 1st node is called the lead, the 2nd node is the second in
command, and so on.
A particular delegation with pre-determined 'Open' and 'Close' timestamps holds each new block and this information is
exchanged with every other node in the delegation.
Each node uses its internal time to determine whether those actions are to be performed and has detailed guidelines on
how to behave.
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Other Consensus
Mechanisms in Blockchain
Proof-of-Capacity
Proof-of-Capacity(PoC)
PoC is another consensus algorithm used in blockchains that allows mining devices in the network to decide mining rights
and validate transactions with the help of their available hard drive space.
The larger the hard drive, the more solution values one can store on the hard drive, the better chances a miner has to meet
the required hash value from his list, resulting in a higher possibility of acquiring and gaining the mining prize.
It has appeared as an alternatives to the problems of high energy consumption in PoW consensus and coin hoarding in PoS.
How PoC Works: Plotting and Mining
The Proof-of-Capacity system follows a two-step method that involves plotting and mining.
First, the hard drive is plotted: A list of all potential nonce values is constructed by hashing data, including a miner's account,
over and over again. Each nonce is made up of 8192 hashes, numbered from 0 to 8191. All of the hashes are coupled into
"scoops," which are groups of two neighboring hashes.
The second phase is the actual mining, which entails calculating a scoop number by a miner.
For example, if a miner starts mining and generates scoop number 38, the miner would then go to nonce 1's scoop number
38 and utilize the data from that scoop to calculate a deadline value.
This process is repeated again and again in order to calculate the deadline for each nonce held upon on the miner's hard
drive. The miner chooses the one with the lowest deadline after calculating all of the deadlines.
Advantages and Disadvantages of PoC
Advantages:
● Any regular hard drive, including those with Android-based systems can be used by PoC.
● Secondly, Proof-of-Capacity is assumed to be up to 30 times more energy-efficient than ASIC-based bitcoin mining.
● The other benefit is that there is no need for dedicated hardware or frequent hard disc upgrades.
● Also, the mining data can be simply erased, and the drive can be repurposed for other data storage requirements.
Drawbacks:
● Not many developers have adopted the system.
● Malware can affect mining activities.
● PoC's widespread usage could spark an "arms race" to develop higher-capacity hard drives.
Projects Using PoC
There are various cryptocurrencies that incorporate PoC
BXTB Burstcoin BHD

Proof-of-Activity
(PoA)
Proof-of-Activity (PoA)
PoA is a consensus algorithm used in Blockchain technology that ensures that all transactions occurring on the network of
Blockchain are genuine and authentic.
PoA consensus, which is a combination of proof-of-work and proof-of-stake, ensures that all miners arrive at a consensus.
In other words, PoA is an attempt to consolidate the best features of PoW and the PoS systems.
Conditions for a PoA consensus:
● The first condition is that the validators have to confirm their real identities.
● The second condition is that a candidate must be ready to invest and put his reputation at stake. A rigorous selection
process decreases the danger of choosing shady validators and encourages long-term commitment to the Blockchain.
● The third condition is that a method for electing validators must be equal to all competitors.
● And the last condition is that the identity of validators must be verified to maintain the integrity of the Blockchain.
Block Generation in PoA
At first, each miner uses his or her hash power to create an empty block header.
When a miner's block header data hash is smaller than the current difficulty target, the miner has successfully created a
block header. If the block header is successful, it is broadcast to the network.
The hash of the previous block is connected to the hash of the block header.
Following that, each combination is hashed, and follow-the-satoshi is run with each hash as input.
The block header from step two is then checked by active miners to see if it is valid.
Following validation, each miner determines whether they are a stakeholder in the block.
Successful miners sign the hash block header with a private key, exposing their satoshi and broadcasting their signature to
the network. This method is repeated until each validator has signed the block.
Block Generation in PoA
The wrapped block is broadcast to the network by the last miner to sign it.
The block is considered a legitimate extension of the Blockchain once other nodes see validity in the above four steps.
Nodes try to extend the longest branch they are aware of by assessing PoW difficulty, similar to the Bitcoin Blockchain.
The fees earned by the final miner are split between them and the rest of the "winners."
Advantages and Disadvantages of PoA
Advantages:
● The major advantage of this consensus is that it has High-risk tolerance as long as 51 percent of the nodes are not
acting maliciously.
● The other advantage is that the interval of time at which new blocks are created is predictable. But in the case of PoW
and PoS, this time is not fixed and typically varies.
● The other crucial benefit of this consensus is that it offers high transaction rates.
● Last but not least, it is far more sustainable compared to POW, which requires computational power.
Disadvantages:
● The first drawback is massive energy consumption due to the mining feature.
● Second, it doesn't have any solution to put a stop to the double signing of the validators.
● Another drawback is that PoA is not decentralized but is just an effort to make centralized systems more efficient.
● Another concern related to POA is that here the validators are visible to anyone. Thus, knowing validators' identities
could potentially cause third-party manipulation.
Decred: Example of PoA
Decred (DCR) is the popular digital currency that uses the PoA consensus.
Decred's mining process begins with nodes searching for a solution to a cryptographic puzzle of a defined difficulty level in
order to generate a new block. So far, this procedure appears to be similar to a PoW method.
The solution is broadcast to the network once it has been discovered. The solution is then verified by the network. At this
time, the system is classified as a Proof-of-Stake (PoS).
The more DCR a node mines, the more likely it is that it will be chosen to vote on the block. (Stakeholders gain tickets that
offer them voting power in DCR's Blockchain in exchange for mining DCR.)
Five tickets are chosen at random from the ticket pool, and if at least three of the tickets vote "yes" to validate the block, it is
put to the Blockchain network forever. Both miners and voters are rewarded with DCR.
Proof-of-Burn
Understanding Proof-of-Burn (PoB)
There are several versions of PoB, but the Proof-of-Burn concept popularised by Iain Stewart is perhaps the most well-known
in the Cryptocurrency ecosystem.
Initially, Proof-of-Burn may appear like a Proof-of-Work system but with reduced energy consumption rates.
The block validation procedure in PoB-based networks does not necessitate the utilization of high-performance computing
resources or mining gear (like ASICs).
Instead, cryptocurrencies are burned to "invest" resources in the Blockchain, removing the need for potential miners to
commit physical resources.
Miners invest in virtual mining machines, or we can say virtual mining power in PoB consensus.
How PoB Works?
If we talk about Proof-of-Work consensus, they are secure due to the fact that miners need to invest a lot of resources to be
profitable finally, which implies that a PoW miner will have all the incentives to act truly and help the network to prevent the
initial investments from wastage.
Now, if we talk about Proof-of-Burn, this idea is similar. Instead of investing in electricity or processing capacity, PoB
Blockchains are designed to be protected solely by coin burns.
PoB systems will pay block rewards to miners, similar to PoW Blockchains, and the rewards are supposed to cover the initial
investment of the burned coins within a specified amount of time.
Here it is important to note that the Proof-of-Burn consensus algorithm can be implemented in a variety of ways. Thus some
initiatives achieve consensus by burning Bitcoins, whereas others establish consensus by burning their own native
cryptocurrency.
Advantages and Disadvantages of PoB
Advantages
● The most significant advantage of this consensus is that it reduces power consumption; thus, it is considered more
sustainable.
● The second benefit is that there is no need for mining hardware.
● The third benefit is that coin burns reduce the circulating supply (or we can say market scarcity).
● The other benefit is that it promotes long-term commitment by the miners.
Disadvantages
● One of the drawbacks associated with PoB is that it is not proven to work on larger scales. There is a lot more testing
needed to confirm the efficiency and security of PoB.
● Also, the verification of the work done by miners tends to be delayed, and it is not as fast as in PoW systems.
● The other drawback is that burning coins is not always transparent or verifiable by the average user.
Example of PoB: Slimcoin
Slimcoin, a virtual currency network that uses POB, allows miners to burn coins, which not only provides them the right to
fight for the next block but also offers them the opportunity to obtain blocks for at least a year.
Slimcoin's POB implementation is essentially a combination of three algorithms: POW, POS, and the basic POB concept.
POW is used in the process of burning coins; the more coins burned, the more chances there are to mine, ensuring the POS
concept and the entire ecosystem is based on the POB principle.
Although the POB consensus exhibits similarities with both PoW and PoS, it follows its own way of reaching consensus and
validating blocks.
Proof-of-Weight(PoWeight)
Understanding Proof-of-Weight
Proof-of-Weight (PoWeight) is a consensus algorithm based around the Algorand consensus model.
In other words, we can say that this is a notable upgrade of the PoS system in which the more tokens one owns, the better
their chances are to discover more. But this whole idea makes the system somewhat biased.
Well, when it comes to Proof-of-Weight, it tries to solve such a biased nature of the PoS.
In a PoWeight system, instead of using your portion of tokens owned in the network to reflect your chance of “discovering”
the next block, some other weighted value is employed.
The Proof-of-Weight Concept
Proof-of-Weight is based on the Algorand consensus model.
Every user on a PoWeight network has a “weight” assigned to them. This weight is determined by the amount of money in
the user’s account.
The network will stay secure as long as the total weighted proportion of users is honest – usually two-thirds or more. This
approach safeguards against double-spend attacks on the network.
Proof-of-weight techniques, on the other hand, can form a committee made up of random network users to perform each
step of the protocol. As a result, the procedure ensures that the majority of committee members are truthful while
simultaneously introducing some centralization.
Algorand and Proof-of-stake may seem similar, but actually, they are not. In a PoS environment, the number of tokens held
defines the amount of additional rewards users earn. Proof-of-weight, on the other hand, uses an entirely different weighted
value.
Advantages and Disadvantages of PoWeight
Advantage:
PoWeight is known for its super scalability and high customization. The fundamental algorithm can be adopted by the
developers to allow for the formation of committees.
Disadvantage:
Despite its advantages, it has proven challenging to get consumers enthused about the concept due to a lack of
incentivization, as the protocol does not pay users for maintaining a node and validating transactions.
Leased
Proof-of-Stake(LPOS)
Understanding LPOS
LPoS allows users to lease out their interests to miners. Mining nodes, in return, share some part of their earnings with the
leaser.
It is a novel way to benefit from mining without really needing to mine.
This consensus is considered to be a more powerful branch of Proof-of-Stake as it extends the capabilities of PoS and
facilitates additional features such as balance leasing (discussed later), passive income generation, and secure transactions.
The Waves platform currently supports LPoS.

How Does It Work?
The Waves platform currently supports LPoS.
Only full nodes in Waves may validate transactions.
The platform's lite users are unable to maintain a full node.
Validators are chosen based on their stake among full node owners.
To participate in mining, a lite user can either upgrade to a full node or lease WAVES tokens to a full node owner in order to
assist them in getting selected as a validator.
Features of LPOS
Balance Leasing
Users can earn passive income by leasing coins from their wallets or other cold storage to miners.
Fixed Tokens
In LPoS mining, no tokens are added to the network. Tokens have a set value and are not transferable. Leased tokens are
locked in leaser accounts and cannot be exchanged or transferred until the leaser terminates the lease.
Decentralized
Most Blockchains reward users who join a mining pool, which results in a centralized structure. In LPoS, however, rewards
are divided linearly based on the amount of stake; hence there is no need for a mining pool.
Transaction Fee As Rewards

Miners in LPoS, on the other hand, earn transaction fees as a reward for processed blocks, as opposed to block rewards in
other Blockchain networks.
Benefits of LPOS
● Validate with Less Stake
● Earn with Fewer Tokens
● Control Over Funds
● Fewer Energy Consumptions
● Higher Processing Speed
Disadvantages of LPOS
Possible Cartel Formations
On the LPoS, when members lease a single full node, malicious activity can be staged. This node will always be ahead of the
pool of validators, providing it an edge over other nodes.
New Technology Shortcomings
It is vulnerable to the flaws that any new technology faces, such as skepticism and a lack of regulations, which can hinder
adoption.
LPOS Vs. POS
LPoS is a more powerful branch of PoS. It extends the capabilities of PoS to provide customers with additional features such
as balance leasing, passive income generation, and secure transactions.
Here it is important to note that the major difference between LPoS and PoS is that regular users can rent their WAVES
tokens in order to generate nodes in exchange for rewards to participate in block generation.
And the best part is that since the lease can be canceled at any time, token holders have complete control of the funds.
The addition of LPoS to the Wave platform has given decentralized ledger technology a new feature. Waves network works
on an LPoS consensus mechanism combined with the Waves-NG protocol.
Example of LPOS: WAVES
The addition of LPoS to the Wave platform has given decentralized ledger technology a new feature.
Waves network works on an LPoS consensus mechanism combined with the Waves-NG protocol.
On the Waves LPoS platform, node operators can use the mining power of another person to generate new blocks without
having to transmit any WAVES, which means coins never leave the leaser's wallet.
It is always possible to cancel a lease agreement and discontinue leasing. The user leasing is responsible for screening for an
appropriate node operator.
To operate a node on the Waves platform, for example, a certain minimum balance must be obtained (1000 WAVES).
In addition, when more transactions are completed on the network, the leaser is rewarded.
Blockchain Solutions:
Steps and Measures
Steps to create your Blockchain Solution
● Identify a suitable use-case: Identify a use-case that makes business sense.
● Identify the most suitable consensus mechanism: Depending upon your use-case, choose the consensus mechanism
that makes the most sense.
●
● Identify the most suitable platform: Depending upon the consensus mechanism, choose the suitable platform.
Designing the Nodes: Blockchain solutions can be private, public or hybrid.
Design the Blockchain Instance: Carefully planned configuration for the following elements:
● Permissions
● Asset issuance
● Asset creation
● Atomic exchanges
● Key management
● Multi signatures
● Parameters
● Native assets
● Address formats
● Key formats
Building the APIs: Some blockchain platforms come with pre-made APIs while some don’t. The major categories of APIs that
you would need are for:
● Generating key pairs and addresses
● Performing audit-related functions
● Data authentication through digital signatures and hashes
● Data storage and retrieval
● Smart-asset lifecycle management –issuance, payment, exchange, escrow and retirement
● Smart contracts
Design the Admin and User Interface: Select the front end and programming languages such
Centralized Architecture
In the centralized architecture, there are two types of nodes that participate in
the system. The first one is the server or super node and the second one is the
client or user node. The super node is the heart of the network which stores the
data and provides services to the clients connected to it.
The advantages of this approach are:

● It is simple for deployment.
● The development time for this approach is relatively short.
● It is cheaper, which means the development, deployment and
maintenance costs are less.
● It is practical when there is a need to control the data at one location.
● There is always a chance that the system is prone to failure.
● Higher security and privacy risks for users.
● It requires longer time for accessing the data for users who are physically
far from the server.
Decentralized Architecture
As the name suggests, the system is not centric, it is distributed to multiple super nodes
or servers. Every super node in the network is connected with at least one another super
node. Each super node contains the same copy of data available and must provide the
same services as other nodes.
The advantages of using decentralized system are:
● The system is less likely to be unavailable for users than a centralized system.
● It assures better performance in availability and response time.
● It provides space for diverse and flexible systems.
● There are some security and privacy concerns to be taken care of as the data is
available at multiple locations.
● The maintenance costs are higher because we are maintaining multiple servers
which are high performing computers with advanced hardware.
● The system needs to be properly optimized, else it leads to inconsistent
performance.
Distributed Architecture
A distributed system is the same as a decentralized system with no central owners. In
distributed systems, users have the same level of data access, though user privileges can be
be restricted if needed.
The pros of distributed systems are:
● The system is highly fault-tolerant.

● The network is transparent and more secure.
● It promotes resource sharing that can reduce burden on single or selected machines.
● The network can be extremely scalable.
The cons of using distributed systems are:
● It is more difficult to deploy a network.

● The maintenance costs are higher than any other method.
Blockchain Use Cases in
Finance and Business
Financial Sector
Payments Across Borders - Payments
3
Blockchain - Payments Across Borders
4
Blockchain in Payments Across Borders
Barclays bank offers $5.5 million in support for the Crowdz - a blockchain start-up for trade finance.
Utilizing blockchain-based "Invoice Exchange," Crowdz seeks to transform the payments system with an emphasis on the
global receivables market of $9 trillion. The service helps enterprises to digitize invoices seamlessly and speed up payment
collections.
This means that, in particular, all small and medium-sized enterprises (SMEs) have access to the cash flow they need to
thrive and expand. Unfortunately, millions of these firms have long been removed from the economy, accounting for 75
percent of global B2B exchange and which require invoice support the most.
A multi-sector national initiative to build a digital identity structure focused on smart contracts is being funded by major
Spanish banks.
5
Blockchain Use Cases in Insurance
In the US alone, every year fraudulent claims account for more than $40 billion, which is excluding health insurance. The
traditional techniques fail to detect fraud, despite digitization. To a great degree, Blockchain will aid in fraud detection and
prevention.
Blockchain makes sure that all transactions executed are immutable and time-stamped i.e. no one can change the records,
even the insurers, to prevent some sort of breaches. This information can further aid in identifying patterns of irregular
transactions that can be used by insurers in their fraud detection algorithms.
Blockchain can be applied throughout the insurance industry and across many lines of business, including:
● Registries of high-value items and warranties
● Know-your-customer (KYC) and anti-money laundering (AML) procedures
● Parametric (index-based) products
● Reinsurance practices
● Claims handling
● Distribution methods
6
Blockchain in Insurance - Etherisc
Etherisc is insurtech startup based in the Munich. Etherisc was the winner of “most innovative blockchain startup award”.
For millions of investors, Etherisc offers new forms of insurance while democratizing access to the reinsurance market.
The goal of the start-up is to 'reinvent insurance' by developing a forum and transparent protocol for decentralized insurance
applications, making insurance purchasing and selling more effective, allowing lower running costs, offering greater
insurance sector transparency compared to traditional insurance operations, and democratizing access to the reinsurance
market.
IBM has also introduced a top-notch insurance solution called openIDL, with the intervention of AAIS, a national insurance
consulting firm. It's an open Hyperledger blockchain network that seeks to reshape how data is gathered by improving the
reporting and regulatory criteria of insurance regulations.
7
Blockchain - Accounting and Auditing
Blockchain-based methods are rather stable, and often helps users to eliminate human errors when handling accounting or
auditing.
Cryptocurrencies and blockchain technology continue to be embraced by banks, and accountants have already started to
accept these innovations. A significant volume of different documents, from invoices to infinite financial spreadsheets
containing hypersensitive data, are stored. Blockchain can assist with processing this vital knowledge effectively.
DLT-powered racking data will lead to the automation of certain accounting processes using AI, which, in turn, may minimise
errors and insider fraud by employees.
Blockchain may offer several advantages to Accountants like Improved Efficiency, Reduced Errors, Easier Reconciliation,
Reduced Cost, Reduced Fraud, Improved Regulatory Compliance and Reduced Auditing.
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Blockchain in Accounting and Auditing - PwC
A blockchain audit service has been announced by Price Waterhouse Cooper LLP, a Big Four accounting company that has
backed numerous blockchain ventures.
The service enables enterprises to have an external analysis on their usage of blockchain technologies, while ensuring that
they use it correctly and encouraging workers to track the blockchain transactions of the organization.
PwC understands the challenges to the implementation of technologies.
This include issues within industries and institutions over compliance, as well as concerns over risk management and
internal controls. Although blockchain is also called tamper-proof, it poses challenges comparable to the implementation of
any information technology in its adoption.
9
Blockchain Use Cases
in Business Sector
Traditional Supply Chain Management
Supply chain management includes integrated planning as well as the execution of different processes.
A supply chain is a network of individual entities, businesses, resources as well as technologies, combine together in the
manufacturing of a product or service.
2
Key Issue in Supply Chain Management
3
How Blockchain is Reforming Supply Chain
4
Blockchain and Oil Supply
Abu Dhabi National Oil Company (ADNOC) with IBM, piloting a Blockchain-based automated system to integrate oil and gas
production across the full value chain.
It will reduce the time taken to execute transactions between ADNOC’s operating companies and significantly increase
operational efficiencies across its full value chain.
Blockchain application will eventually be linked to customers and investors, providing seamless integration among
stakeholders.
5
Blockchain and Diamond Supply
In general, diamonds are mined under violent circumstances or in unsuitable conditions, and in the continent, sales of
diamonds often serve for funding various conflicts in the region.
De Beers put an end to these issues with the help of a blockchain supply chain program.
Tracr, an Ethereum blockchain-based platform, tracked diamonds from the mining stage until the product reaches a retail
store.
6
Blockchain in Healthcare
The risky and unpredictable nature of the clinical
trial process is a major driver of high costs for
pharmaceutical drugs.
Blockchain streamline the communication between

doctors and patients during the trial.
7
Blockchain in Record Management
Blockchains can enable
sharing as well as security.
Combined with IoT sensors in

Wearables, data can be
automatically uploaded to the
Blockchains.
Smart contracts can be defined to

govern the rules of access for
different entities.
8
Blockchain in Clinical trials
9
Blockchain in Media Industry
The emergence of Blockchain in Media industry is
triggered by further transforming content mass-market
commodity and security practices, undermining the
content security.
Through offering real-time monetization models,

Blockchain helps content creators combat these
challenges and maximize their revenues.
This approach has the potential to slash payment
costs by 40-80%.
10
Blockchain in Media & Entertainment
Streamlining Internal Processes:
● Telecom supply chain management: Telecoms provide a dynamic supply chain that relates to the management of
physical and intangible infrastructure through various parties. The quality of the supply chain can be dramatically
increased across manufacturers and distributors by using blockchain to exchange data in a safe and open manner.
● Linear advertising sales: Streamlining the ad sales process among publishers, agencies, and advertisers in the TV ad
space using blockchain increases clarity across the various parties and has a positive effect on the media companies'
bottom line.
● Dispute resolution: Telecoms fund much of the infrastructure and resources they deliver, and blockchain can be used
to boost the competitiveness of business funding by exchanging data in a safe and open way, reducing conflicts
between the respective parties.
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Providing services built on blockchain:
● Roaming, fraud, and overage management: Complying with roaming contracts, reports, and payment settlements
between communications service providers (CSPs) and recognizing possible fraud with user authentication through
roaming networks is a common issue for telecoms. When subscribers travel through various networks, Blockchain can
be used to increase the visibility of core components, such as billing, fraud, overage, and identification.
● Collection of music royalties: Monitoring copyright metadata to streamline the method of obtaining royalties for the
music industry directly influences media corporations' income. The use of blockchain helps the multiple parties to
control copyright fees more efficiently, simplify expensive reconciliation procedures, improve the negotiating
authority of the digital rights agency, and promote engagement with consumers of digital music.
● Identity management: A decentralised, trustworthy identity that can result in creative interaction with consumers
with sizes. This identity service can be offered by telecoms when they have access to consumer data that can be
combined using sources from industries with blockchain as the underlying trusted data driver.
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Collaborating in business ecosystems:
● Portability of mobile numbers: various stakeholders, including authorities, the donor CSP, the receiver CSP, and the
subscriber, need end-to-end control of number portability. With access to reliable records, CSPs are able to minimize
procedure times, reduce costs by reducing information handoffs, and reduce risk by streamlining error-prone
measures.
● Mobile payment with eSIM activation has excellent benefit, delivering facilities built on top of established CSP deals.
For e.g., a smart mobile payment vending machine and eSIM activation for IoT monitoring devices are added
resources that a CSP can develop on top of the blockchain when partnering with key partners.
● Transparent ad supply chain: Due to lack of auditability, lack of evidence, and a broken system of documents, the
existing ad supply chain is complicated. The digital advertising supply chain can be automated and optimized using
blockchain for advertising companies, marketers and publishers.
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Blockchain in Real Estate
14
Benefits of using Blockchain in Real Estate
15
Government & Public Sector
Blockchain - Election
To properly run voting, accountable individuals need to ensure that the following components are available: accurate
identity authentication, secure monitoring of votes, and trustworthy counterparts for estimating votes.
During elections, blockchain devices and platforms can serve as an underlying infrastructure for votes tracking and tallying.
In this way, the governments may avoid the need to re-check and deter electoral fraud, such as fake voters and fraudulent
votes.
Governments and voters would have checked record storage by tracking ballots on the blockchain, preventing human
mistakes and voices corrupted by fake social practises.
Blockchain in Election (Examples)
● Voatz, a platform that offers services for government elections, custom events, and convention voting, is a real-life
example of blockchain-based organizations.
● Votem is another provider of voting platforms serving private customers and government, public and military sector
customers.
● The experience of these businesses demonstrates that blockchain is effectively used for government and private
purposes to hold secure, electronic elections.
Blockchain for Non-Business Entities
Blockchain for Non-Business Entities (Examples)
● Airbus – Their heritage blockchain project gives charities a full-service blockchain platform that helps improve
operational efficiency. Blockchain helps them lowering their administrative costs.
● Bitgive – Giving/donation tracking on the blockchain. It helps in giving their chain transparency.
● CryptoKitties – Auctioned ‘Honu Kitty’ to save the ocean. Blockchain helps them in auctioning digital collectibles.
● Unicef Australia – Created a page where people can mine for charity.
● Cudo Donate – People can download app and mine for charities.
Blockchain Use Cases in other
Industries
Blockchain in Additive Manufacturing
Blockchain in Additive Manufacturing
● In manufacturing, blockchain offers a 3D digital thread of instructions that are electronically communicated
throughout the process in chronological order instead of having 2D blueprints of the lifecycle of a product.
● It eliminates the need for human interpretation, translation or data transfer, which equals saved time and money.
● If a data thief, someone we call a 'bad actor,' grabs the Manufacturer 1 file and tries to send a fake data file to
Manufacturer 2 to cover his crime, Manufacturer 2 will know something's wrong because the blockchain fingerprint
of the real file will not be there.
● The dispersed factory of the company enables clients to work with the right 3d model for their output and transfer
production files directly through a 3d model safely, without human interference. This platform gives benefit to
consumers with low turnover, expensive management, who have overloaded inventory. It's also useful for firms who
need to periodically track manufacturing processes.
Challenges faced by Gaming Industry
Server outages: Due to overloads or hacks, games with more players can suffer server outages. This exists because
centralized servers are run by many. That is why all players feel it when the server is down.
Cheaters and bad players: Centralized video games are very easy to hack on. A gamer says that an average of 17,000 players
are banned for cheating on PUBG on a daily basis. Much of the time, as there is no algorithm to search for playing
irregularities, other players are the "police" who report bad players.
No earnings: Gamers only play for a personal and social thrill with no earnings. Collectibles are not transferable to other
players or to other gaming sessions in these games. For selling in-game tips, there are no game arenas. People who teach
'how-tos' of the game to others are not encouraged for their time and hard work.
Storage: Online players can quickly lose their progress in gameplay because most online games store player progress and
experience player data as temporary files that are discarded as soon as players complete their gaming session. Such
information is stored by other gamers in centralized storage that is open to hackers and viruses.
Blockchain - viable Solution to these challenges
Decentralization (No server Outage): Without the need for a central source server, IPFS has made it very convenient to
exchange data at a very high speed. Each server that connects to the stream becomes a source for data to be retrieved by
newer servers. This is possible with the validation of nodes that validate the files exchanged across the network are genuine.
This way, the entire network is not compromised even though a server suffers an interruption.
Transparency: With transparency, it would be very difficult for any bad guy to compromise the game code. Wunbit goes a lot
better than that. It makes the game codes available for players to freely access and see that they are not being cheated and
proved to be a fair engine. Via the smart contracts that each game works with, this form of data can be managed.
Earning: For their activities on the platform, players on the Wunbit platform can receive WUN tokens. For eg: after the
complete platform launch, Fly2Win will reward the top three players with WUN tokens, which will be exchanged for fiat
currencies.
Storage: With Wunbit, players can now permanently store their game-states and high scores on the blockchain. The
blockchain is permanent, so it is not possible to alter, modify, or erase data stored on it.
Issues faced by Gaming Industry
Ineffective tracing of contaminated and diseased products: The global food supply chain puts together producers,
wholesalers, manufacturers, shopkeepers, owners of stores, warehouses and factories under one umbrella. With this large
volume of data, inefficiencies in the chain are expected to occur.
Frauds and scandals: The food industry is no stranger to illegal acts and scandalous actions due to existing procedures that
are vulnerable to human error and the malicious intent of those persons involved.
Botched means of payment: The rest of farmers' earnings are swallowed up by intermediaries and transaction costs.
Farmers are not paying what they should be for their produce, especially in places like India, where agriculture is still the
most dominant industry.
How can Blockchain Help?
Transparency and openness: There is no space for any disruptive efforts to exploit the food supply chain because of the
existence of the business blockchain. Because of the blockchain's food safety utilities, any activity such as tampering with the
product or misleading advertisement can be automatically rectified and the culprits caught long before the produce made it
to the supermarkets.
Better tracing capability: The ability to properly monitor and display the status of food goods is one of the apparent
advantages of integrating blockchain for food safety. Retailers can locate and withdraw damaged goods easily, saving a lot of
overhead in total recalls. And, because of the blockchain for food protection, if action has to be taken on tainted products,
their source can easily be tracked and necessary measures are taken.
Preventing losses due to diseases and/or fraud: Using blockchain technologies in the supply chain, and using blockchain for
food protection, a follow-up from the previous argument will potentially help to get rid of subsequent damages generated by
the consumption of contaminated and/or diseased items.
Blockchain in Food Industry
Blockchain in Food Industry (Examples)
CHINA:
China has upped its game to ensure that the food it offers to its people is the very finest, after being shaken by the 2008'
melamine in milk' controversy.
Studies have shown that the public is indeed aware of the risks faced by unhealthy foods, with food safety being seen as a
major concern in the world by at least 40 percent of the population.
The Blockchain Food Safety Partnership, which includes the country's main supermarkets and retailers, is a major step
toward rules and guidance on food safety, and definitely goes a long way to giving consumers back trust and belief in the
food they purchase.
With the food industry now obviously under the blockchain surge, China is doing its utmost to take advantage of all the
advantages of this incredible technology to ensure food safety.
Blockchain in Food Industry (Examples)
THE UNITED ARAB EMIRATES:
Although the UAE does not grow any of its food domestically, it has still made effective use of digitization in tracking the
approximately USD 200 billion worth of food that it imports per year.
Like China, the UAE is applying IoT and blockchain technology to track and control food goods from the point of production
to the point of consumption.
A digital network, Food Watch, was unveiled at the 11th Dubai International Food Safety Conference in 2017 to incorporate
all the information about food products served on the food safety blockchain by 20000 retailers.
The aim of the platform is to collect data on high-risk foods, the institutions that treat them, and the manufacturers or
importers. This enables vital information on demand to be generated by customers and officials.
Other Use-Cases of
Blockchain
Blockchain in IoT
Why IoT Need Blockchain?
IoT devices are powered by centralized servers, which won't be enough for long-term solutions.
Thus, if IoT devices want to reach their full potential, they must move away from the centralized servers and switch to the
concept of decentralization.
Apart from that, IoT devices suffer from various shortcomings such as lack of compliance in the manufacturing stage,
security holes in the device updates, vulnerability to DDoS attacks, etc.
Thus, for transforming their operations in terms of accountability and security, enterprises and organizations can send their
IoT data to an immutable blockchain ledger for added accountability and security.
How Blockchain can Help IoT?
Brings Trust: As we know, with Blockchain, there is no centralized server in control of your data; thus, technology maintains a
complete level of trust.
Cost-Efficient: Blockchain and IoT can manage everything on their own without any issues, reducing the additional cost
associated with security.
Streamline Processes: Blockchain in IoT can streamline the entire process without involving any third-party intermediaries.
Additionally, Blockchain can help alleviate the security and scalability concerns associated with IoT in various ways such as:
● Tamper-proof
● Robust level of encryption
● Transparency
● Coordination among billions of connected devices
Applications of IoT and Blockchain
Blockchain in Agriculture
The combination of Blockchain and IoT has the ability to completely transform the food processing market, from farm to
grocery store to home. By installing IoT sensors in the farming area and sending data directly to Blockchain can bring overall
transformation in the food supply chain.
Tracking Components and Maintaining Compliance
The ability to track components that go into an aircraft or automobile is critical in terms of safety and regulatory
compliance. IoT data stored in Blockchain enables all the involved parties to see component provenance throughout a
product's life.
Healthcare
Maintaining privacy is crucial, especially in the healthcare sector, as there are possibilities of counterfeit medicines. Thus
the transparency and traceable nature of Blockchain, along with the embedded IoT sensors, can help monitor and trace the
shipment of drugs right from their origin to the supply chain destination.
Applications of IoT and Blockchain
Freight Transportation
Moving freight is a complicated procedure that involves multiple stakeholders with varying priorities. Temperatures,
position, arrival times, and status of shipping containers can all be stored on an IoT-enabled blockchain as they travel.
Immutable nature of blockchain transactions ensure that all parties can trust the data and act promptly and efficiently to
move products.
Log Operational Maintenance Data
IoT devices monitor the status of critical machines' safety and maintenance. From engines to elevators, blockchain delivers
a tamper-proof database of operating data and the maintenance that comes with it. Third-party repair partners can keep
an eye on the blockchain for preventative maintenance and then log their work on it.
Conceptual Architecture of IoT Blockchain Platform
Conceptual architecture of the IoT Blockchain platform depicts the IoT Blockchain platform's hypothetical scenario, which
includes IoT devices, user devices, data storage, local bridges, and servers connected via a peer-to-peer network of
Blockchain.
IoT Server: The IoT server can be defined as a service provider that can communicate or interact with local bridges and the
Blockchain network to offer several services to end-users.
Data Storage on Cloud: Environmental data obtained by sensors, physical device profiles, and device owner profiles can all
be stored securely in the Blockchain network's data storage.
User Client: End users can read and publish data to the Blockchain network using a user client, which can be any terminal
device like smartphones or laptops.
Communication Protocols: Developers can use a variety of communication protocols for IoT systems such as Bluetooth®,
WiFi, 2G-3G-4G cellular, and others.
Conceptual Architecture of IoT Blockchain Platform
Communication Strategy: Two methods are presented for communicating with physical devices, either through local
bridges or with the help of direct wireless communications.
IoT Devices: Sensors and actuators are two types of IoT devices: sensors collect environmental data like temperature and
communicate it to servers for further processing, whilst actuators conduct actions (like turning on the light) in response to
requests from end-users.
Current Blockchain IoT Players
● Chain of Things (CoT)
● IOTA
● Riddle&Code
● Modum.io
Central Bank Digital
Currency
Understanding CBDC
CBDC stands for Central Bank Digital Currency, which is controlled directly by the country's central bank and is backed by
national credit and government power.
In most simple words, CBDC is an electronic form of central bank money that can be used to store value and make digital
payments seamlessly.
Three aspects that define a central bank digital currency:
● Digital assets
● Central bank-backed
● Central bank controlled.
Categories of CBDC
Wholesale CBDC
● This type of CBDC can be exchanged and traded between central banks and private banks.
● Such exchanges help in streamlining payments between these institutions and enable faster cross-border
transactions and reduce counterparty credit and liquidity risks.
● These CBDCs are considered to be the most attractive project because of its ability to make existing wholesale
financial systems faster, economical, and safer at the same time.
Retail CBDC
● It is digital money meant for ordinary consumers and average people who will use it to conduct transactions for their
daily activities.
● Such CBDC is based on distributed ledger technologies like Blockchain offers, traceability, anonymity availability
24/7/365, and the feasibility of an interest rate application.
● It mitigates third-party involvement, thereby eliminating the chances of criminal activities.
Benefits of Wholesale CBDC and Retail CBDC
Benefits of Wholesale CBDC
● Increased availability
● Streamlined reconciliation process
● Encouraged use of digital technology
● Enhanced monetary policy
Benefits of Retail CBDC
● Improved settling of interbank payments

● Reduced risk of a counterparty
● Increased participation in the digital asset markets
● Enhanced competitive edge in the market
Can CBDC Drive Financial Inclusion?
● Lack of money and inadequate knowledge of the importance of financial inclusion are the main reasons for people
being unbanked.
● CBDCs can play a crucial role in promoting financial inclusivity.
● In developing countries, CBDCs can allow and enhance public access to government-backed payment methods even
without requiring bank accounts.
● Experts believe that if utilized well, they have the potential to create frictionless economic opportunities as well. But
for all this to happen, CBDC needs universal acceptance.
● Moreover, it should be interoperable with other payment methods and other digital currencies as well.
Blockchain in Retail
Fashion and Luxury
Blockchain in Retail Fashion and Luxury
Blockchain, which is a distributed ledger technology, is known to provide retailers, manufacturers, and end-users
unparalleled transparency, traceability, and tradability in the domain of retail fashion and luxury.
Transparency, tradability, and traceability which are the core capabilities of Blockchain ensure other benefits to
stakeholders across retail fashion & luxury, including:
● Reinforcement of sustainable practices

● Redefined user experience
● Improved brand authenticity
● Improved customer trust
● Advanced data management
● Lower cost and settlement time
Benefits to Stakeholders Across Retail Fashion
and Luxury
Reinforcement of Sustainable Practices
Blockchain can be used to track the progress of assets, record data, and display past asset records. It has the ability to grow
the worldwide production and consumption of any commodity sustainably and ethically.
Redefined User Experience

Sustainability has evolved from a nice-to-have to a near-essential requirement. Retailers are leveraging Blockchain for
redefining luxury and customer experience by tokenizing tangible assets and allowing consumers to see where their things
are sourced.
Improved Brand Authenticity

Brands can use blockchain technology to tokenize non-fungible assets, allowing them to be easily retained, purchased,
exchanged, and traded. Customers can create and prove ownership of a luxury asset on a brand's website, which can then
be validated and transferred to another party.
Benefits to Stakeholders Across Retail Fashion
and Luxury
Improved Customer Trust
Brands can use Blockchain to digitize, track, and trace a luxury item's whole lifecycle. Furthermore, brands may use
Blockchain to create an irreversible record of all supply chain operations, capture specific data points such as sustainability
certifications and claims, and make this data publicly accessible.
Advanced Data Management

Data management in silos results in inefficient processes and key reconciliation concerns. On a blockchain, critical data may
be easily appended and securely shared across business lines, operations, and partners.
Lower Cost and Settlement Time

By providing improved data management tools, improving supply chain management, and minimizing the risk of
counterfeit and grey markets, blockchain technology can drastically cut operating expenses in retail fashion and luxury.
Additionally, advances in data management result in cost savings through new Just-In-Time inventory management and
improved trust in outsourcing.
Blockchain Use-Cases in Retail Fashion and Luxury
Digitization of Assets: The digital representation of the product on the Blockchain network, known as tokenization, allows
stakeholders to access tracking data and interact in real-time without jeopardizing delicate data.
Product Traceability: Blockchain, which is a distributed ledger technology, allows brands to manage and control their
supply chain right from raw material to the final consumer and manage large data sets efficiently and transparently.
Loyalty Programs: Customers' expectations for frictionless transnational transactions are rising as they embrace global
lifestyles. Tokenization ushers in a new loyalty program paradigm, allowing luxury buyers to transact with a variety of
partners outside of the brand.
Blockchain in Sports
and eSports
Challenges in Sports and eSports
● Only a small portion of the total industry revenue goes to the players.
● There is no credible, self-sufficient environment for gamers and brands.
● Unless fans and followers follow players on social media platforms such as Twitch or YouTube, they have no easy
means of knowing who they are.
● There isn’t a transparent system to provide fair rewards to service providers.
● Investment in eSports is difficult without a centralized portal that allows for secure eSports participation.
Why Use Blockchain?
Technology is extensively utilized to reward fan participation and create one-of-a-kind experiences.
Athletes can also use Blockchain to crowdfund their performances by using income share agreements.
Blockchain is rethinking the fan experience to enable new ways for fans’ engagement.
Furthermore, through tokenized teams and loyalty reward schemes, Blockchain has established new revenue sources for
teams and clubs while monetizing fan involvement.
Blockchain is fast gaining traction in the collectibles and gaming industries, as well as sports betting.
The Incorporation of Smart Contract
Smart contracts, either in place of or in addition to traditional contracts, will help all parties involved in the sports sector.
Not only does it make contract drafting easier, but it also has the high potential to reduce or eliminate contract-related
disputes.
Let's have a look at an example that portrays how the sports industry can utilize the Blockchain with the help of smart
contracts via incentive-use payments.
Consider a power-hitting professional baseball player. Let's call him Player X.
Assume Player X and the team have agreed to a smart contract in which Player X will receive a $250,000 incentive if he hits
35 home runs this season.
With Blockchain, if Player X now has 34 home runs and then hits number 35, the transaction will automatically complete
due to the smart contract's specified requirements being met.
The data (in this case, Player X's amount of home runs) will be pulled from the Blockchain by the smart contract. The
transaction is completed after the predefined condition is met, and $250,000 is directly sent to Player X.
Another example that illustrates how smart contracts can be exploited in the sports industry is endorsement deals.
Professional athletes and third-party sponsors have a high incidence of disagreements. Smart contracts, which can be used
to replace regular contracts, can help with these concerns.
Let's suppose that Player A has signed a sponsoring agreement with Company Z. Player A will be paid $500,000 after he
appears at ten Company Z sponsored events.
The process will work likewise, as above, with a contract signed between Player A and a team. Data here (in this case,
Player A's number of appearances) will be pulled from the Blockchain via smart contract.
The agreement is completed, and $500,000 is paid once the predetermined condition (in this case, ten appearances) is
fulfilled.
But what if the desired condition is not met? In that case, the transfer will not occur, and the Player will not receive any
funds.
Use-Cases of Blockchain in Sports and eSports
Fan Tokens
The appeal of fan tokens arises from their capacity to increase interaction while also providing extra revenue streams for
teams. Fans can purchase tokens using FIAT currencies such as dollars, pounds, and euros, which can then be traded for
souvenirs, collectibles, or exclusive experiences.
Digital Trading Cards and Collectibles
Digital collectibles, powered by Non-Fungible tokens (NFTs) are individually unique and limited in quantity. This means that
NFTs can be used to produce “limited edition” collectibles, and the immutability can be used to verify their uniqueness. As
a result, they're the ideal tool for clubs and teams to use to create digital trading cards, in-game assets, and gaming
memorabilia for fans to buy and trade.
Fan Loyalty and Engagement Platforms
Fan Loyalty and Engagement Platforms allows teams to foster a sense of community and belonging among their fans. With
the help of these blockchain-based platforms, fans can get rewarded for interacting with clubs’ sites, sharing and liking
content, or with the help of loyalty programs that allow them to collect rewards to spend on digital collectibles.
Use-Cases of Blockchain in Sports and eSports
Blockchain-Based Ticketing Systems
Blockchain can be applied at the ticketing level as a more secure way of purchasing or transferring tickets among owners.
Fans who are unable to attend an event can switch their ticket without paying penalty fees, thanks to its decentralized
nature.
Decentralized eSports Ecosystems
Blockchain technology can provide a robust single platform to bring multiple stakeholders altogether. Its decentralized
structure enables industry stakeholders to communicate in a peer-to-peer (P2P) manner, eliminating intermediaries and
enabling the smooth distribution of prize money, player transfers, and more via programmable smart contracts.
Blockchain in Legal
Industry
Advantages of Blockchain in Legal Industry
Accessibility: Lawyers may use Blockchain to streamline and simplify their transactional work, as well as digitally sign and
store legal agreements in an immutable manner.
Transparency: With Blockchain, even non-technologists can also gain a better understanding of the transactions they make
and what the smart contract outlines.
Reduced Costs: Many laborious activities may now be automated, reducing the time spent creating and modifying legal
papers dramatically.
Automation: Lawyers can automate non-billable administrative tasks and transactional labor using a legal agreement
repository and pre-fabricated smart contracts. Cutting back on excessive physical work will help speed up legal proceedings,
lowering customer expenses.
Efficient: Many legal processes can be streamlined, re-engineered, automated, disintermediated, and secured using
blockchain technology without compromising judicial authority.
Use-Cases of Blockchain in Legal Industry
● Electronic Signatures
● Intellectual Property
● Property Rights
● Chain of Custody
● Tokenization
● Decentralized Autonomous Organizations (DAO)
● Limited Liability Autonomous Organizations (LAO)
● Automated Regulatory Compliance
● Machine to Machine Payments
● Blockchain-Based Arbitration System
Electronic Signatures: The authentication process is made faster, more efficient, and less expensive with electronic
signatures. Moving signatures to Ethereum also reduces the amount of time and money spent on manual processes and
high costs while coordinating and facilitating signature authentication.
Intellectual Property: Non-fungible tokens, or NFTs, are significant Blockchain-based intellectual property innovations.
Creators of a product can use Blockchain to upload, register, and time-stamp their original work on a public ledger, resulting
in irrefutable proof of ownership.
Property Rights: Property owners can avoid costly central intermediaries by electing to register and sell their properties on
the Blockchain in a transparent and immutable manner. Public ledgers of Blockchain offer a new form of property rights
management, which causes a reduction in transaction costs.
Chain of Custody: By utilizing Blockchain, one could track a unique evidence token for every item collected and received,
which is auditable in a public/private blockchain.
Tokenization: It is the process of converting an asset's rights into a digital token. Interested parties can create tokens on a
platform that supports smart contracts, allowing them to be bought and sold on exchanges. When combined with IP rights
and microtransactions, creators will be able to tokenize and lawfully sell fractions of their assets.
Blockchain in Social
Impact
Players in Blockchain for Social Impact
Blockchain for Social Impact Coalition
The Blockchain for Social Impact Coalition, or BSIC, is a non-profit group that advocates Blockchain solutions that are
tailored for environmental and social concerns, as well as working toward the UN's Sustainable Development Goals. BSIC is
focusing on various sectors such as supply chain, environment & energy, human rights, education, health & wellness, along
with others.
Consensus Blockchain for social impact and NGOs

Consensys manages the Consensus blockchain for social impact and NGOs. Their goal is to make the world a better place by
putting in the necessary effort to help programs dealing with environmental and social issues succeed.
Accenture Blockchain for Social Impact

When it comes to Blockchain for social effect, Accenture is another organization to contribute. Their goal is to leverage
Blockchain to have a positive societal impact. To assist them in achieving their goals in social projects and to partner with
governments, NGOs, and businesses to create a better and more sustainable society.
Blockchain Role in Social Impact Initiatives
Fraud and Risk Reduction
The decrease of fraud and dangers linked with the project itself is one of the most significant benefits of Blockchain for
social impact. Each transaction on the Blockchain is confirmed using consensus mechanisms, making it completely
tamper-proof. There is no reliance on a centralized authority; hence there is no risk of fraud.
Reduced Administrative Costs
It is feasible to manage financial and legal intermediaries using smart contracts. Automation is usually beneficial and so
makes it simple to deal with components that are repetitive or non-creative.
Accountability and Transparency
Charities may now be held accountable and transparent thanks to Blockchain technology. People are well-known for their
skepticism about charities. Donors, on the other hand, can be sure of what they're doing with Blockchain.
Blockchain Role in Social Impact Initiatives
Faster Border Transfers
Charity organizations can employ digital currencies that can be transferred over a network without the need for a
centralized authority if they use Blockchain. They don't have to pay intermediaries and also do not have to wait too long for
the transactions to get completed.
Improved Accessibility
Anyone will now be able to send or receive money, all thanks to Blockchain. They don't have to rely on banking to
accomplish all of this. This is great news for charities and non-governmental organizations (NGOs) that aid individuals from
all walks of life.
Design Principles of Using Blockchain for
Social Impact
Governance legitimacy: Developing credible and legitimate applications and platforms requires a transparent, accountable,
and inclusive process. Data accountability rules and guidelines must be developed by project owners from the start.
Ethically sound: To establish confidence and validity, Blockchain initiatives' ethics must be considered. Because of the
reason that identity-based applications may involve considerations of access and individual rights, ethical concerns are
exceptionally essential.
Not technologies, but resolutions to real problems: Non-blockchain alternatives should be considered by decision-makers,
which should make every attempt to convey the true value proposition of their suggested approaches.
Ecological footprint: Due to the high quantities of energy necessary to process and authenticate activities, most
Blockchains have a significant and expanding environmental imprint. As a result, alternatives that do not contribute to
global warming are required.
Design Principles of Using Blockchain for
Social Impact
Synchronized with existing initiatives: Conducting adequate due diligence and research at the onset, as well as engaging
existing expertise, are two approaches to guarantee that projects operate together and build on existing knowledge.
Interoperability and open standards: The establishment of open technical standards and ensuring the interoperability of
multiple systems will be crucial to achieving long-term usability and accessibility.
Securing first block accuracy: While the immutability and integrity of Blockchain maintain the accuracy of on-chain data,
the first block on the chain remains a single critical point of failure. Thus, it is advised that project designers must assure
the accuracy of this first block by implementing vetting and quality control methods, as well as searching out processes and
intermediates to validate and cross-check information.
Points to Keep in Mind While Implementing
Blockchain for Social Impact
● Digitizing off-chain assets and analog data
● Refining effective identity solutions
● Clarifying Blockchain governance
● Instituting Blockchain-specific rules and regulations
● Developing Blockchain ethics
● Combatting disinformation through Blockchain
● Exploring the intersection of futuristic technologies
● Incorporating differential privacy into Blockchain solutions
Social Sectors Impacted Using Blockchain
Agriculture
The major goal is to improve three key areas of the agricultural supply chain. Transparency, traceability, and efficiency are
all things that can be improved. It will ensure that farmers have a strong connection to their customers.
Projects: AgriDigital, Grassroots Cooperative, Bext360
Democracy and Governance

The next area in which Blockchain has the potential to make a significant impact is democracy and governance.
Governments are currently enthusiastic about Blockchain and its potential to improve democracy and governance.
Projects: e-Estonia, Votem
Energy, Climate and Environment

The temperature, energy, and ecology could all be affected by blockchain technology. Blockchain can increase peer-to-peer
transmission while also allowing users to establish micro-grids. Apart from this, the energy domain can bring efficient and
reliable solutions.
Projects: Grid Singularity, ME SOLshare.
Social Sectors Impacted Using Blockchain
Health
The use of Blockchain in healthcare can help to improve digital health records. It also helps to control the pharmaceutical
supply chain.
Projects: Modium.io
Philanthropy and Aid

In reality, the majority of help never reaches the intended recipients. People have also stopped contributing to these
non-profit organizations. But all of these issues can be solved using Blockchain, which can assist non-profits to gain
confidence in their ability to use funds.
Projects: Ixo Foundation, Disberse, RootProject
DeFi in Blockchain
Introduction to Decentralized Finance
Decentralized finance is made up of financial applications that operate through a decentralized blockchain, thereby
removing the need for users to trust any third-party.
Decentralized Finance, or DeFi, is at the heart of the recent cryptocurrency bull market. DeFi is the hottest topic in crypto
space right now, similar to how Initial Coin Offerings (ICOs) were all the rage in 2017.
It transforms traditional finance services from centralized to decentralized play of execution.
It serves as an alternative to the traditional financial world and thus reduces inefficiencies and alleviates pain points.
Based on Blockchain technology, it aims to give people access to new financial opportunities, and more control of their
assets.
We can also define DeFi as a programmable money.

Characteristics of DeFi
● Involves no third parties: Decentralized applications rely on smart contracts instead of the humans responsible for
operations.
● Governed by users: When it comes to governance, DeFi is unique, and this is because it moves towards
decentralization.
● Easy to enter: Due to its permissionless nature, anyone in any corner of the world can start using the platforms
without disclosing any personal information and applications for access.
● Community-driven: Since DeFi applications and protocols are open source and decentralized, it facilitates
community developers to add new features and build new apps as per their needs.
● Truly global: It means the products are not customized for specific countries and are developed in such a way that a
person sitting in Europe and a person sitting in India will have the very same experience and access to features.
DeFi Use-Cases
Stablecoins
Understanding Stablecoins
Stablecoins are cryptocurrencies designed to reduce the uncertainty of a coin's price as compared to a "stable" asset or a
basket of assets. Stablecoins can be pegged to currencies or securities traded on exchanges.
● Stablecoins are available all around the world and can be submitted via the internet. Once you have an Ethereum
account, receiving and sending them is easy.
● Since stablecoins are in high demand, you can gain interest by lending yours. Before you lend, make sure you're
mindful of the risks.
● Stablecoins can be exchanged for Ethereum tokens such as ETH and other Ethereum tokens. Stablecoins are used by
many dapps.
● Cryptography is used to encrypt stablecoins. No one can work on your behalf and forge transactions.
Uses of Stablecoins
Stablecoins are a form of cryptocurrency that can be used for decentralized finance operations such as liquidity mining,
lending, and borrowing.
Stablecoins may be used as a substitute for fiat money. Since transactions are settled on the blockchain, they are frequently
quicker and less expensive than fiat currency.
Stablecoins have the potential to change people's lives in impoverished countries all around the world. In addition to their
Visa relationship, Circle recently assisted medical staff in receiving USDC during Venezuela's economic crisis. It is the first
time stablecoins have been used to combat hyperinflation.
Lending and
Borrowing
DeFi - Lending and Borrowing
Users may deposit and lock their cash into smart contracts on DeFi lending and borrowing platforms, from which other
users can borrow and pay interest on them.
DeFi allows users to lend and borrow money directly from each other, bypassing the need for a banking middleman.
Once the requirements are defined, balance verifications are performed on a blockchain, assets are transferred to a smart
contract as collateral, and interest rates are subtracted without the need for human interaction.
To avoid liquidation when market prices vary, these loans demand a high collateralization rate.
DeFi P2P Lending platforms are platforms that provide these types of lending services, and there are more popular
decentralized applications (Dapps) accessible in the crypto market that give DeFi P2P lending alternatives.
Working of DeFi Lending
Working of DeFi Borrowing
Key Advantages of DeFi Lending and Borrowing
● Highly Flexible lending and borrowing process
● Faster Fund Transfer
● Ultra Transparency in Transactions
● Lender Passive Income
● Higher Interest Rates over Traditional Saving
● Permissionless Processing
● Open access to everyone
● Immutable, that no one can edit or delete any transactions
Synthetic Assets
Understanding Synthetic Assets
In order to understand synthetic assets, it is important to note that synthetic assets are derivatives.
Basically, a derivative is an asset that derives its value from an underlying asset.
Synthetic assets are financial instruments that simulate another asset's payoff. Thus, they are synthetic, not actual assets,
and also referred to as synths.
These are blockchain-based crypto derivatives that act like traditional derivatives, but truly, they are not.
A synthetic asset is nothing more than a tokenized derivative that imitates the value of another asset.
For example, if you want to trade Gamestop stocks but don't want to retain the $GME asset, you can trade $sGME
(synthetic GME), which mimics the actual asset by following its price using data oracles like Chainlink.
Benefits of Synthetic Assets Over Traditional
Derivatives
Anyone can issue: Blockchain-based synthetic assets can be minted using Synthetix and Mirror, which are open-source
protocols.
Global liquidity: Synthetic assets can be traded on any crypto exchange, including unstoppable DEX.
Borderless transfers: Synthetic assets are blockchain assets; thus, one can send and receive them between standard crypto
wallets.
Frictionless flow: Additionally, one can switch between equities, synthetic silver/gold, and other assets without owing or
holding the underlying asset.
Other Benefits of Synthetic Assets
Apart from global liquidity, borderless transfers, and frictionless flow, there are some other benefits of synthetic assets.
Liquidity Provision - Liquidity demonstrates how quickly and easily an asset can be bought and sold. If there is enough
liquidity, a rapid purchase could be made without changing the asset's original market value. Creating a synthetic asset will
produce a significant volume of liquidity to DeFi platforms.
Universal Market access - Blockchain-based financial access offers universal market access in comparison with fiat financial
infrastructure.
Low funding charge - Customized cash flow patterns make investors offer funds at the lowest price. The investor's principal
goal is to raise demand for the asset without changing the interest rate.
Prediction Markets
What are Prediction Markets?
Prediction markets are groups of people who are betting on the result of a certain event.
Market rates will reveal what the general public believes the likelihood of an event is.
In a prediction market, there are two kinds of securities: "YES," or long shares, and "NO," or short shares.
● YES: Gives you a payout if an event happens, but none if it doesn't.

● NO: If an event does not occur, you will receive a reward, so if it does, you will receive none.
The amount of money paid out is solely determined by how much the customers are willing to offer and how much the
sellers are willing to take.
Why DeFi Prediction Markets?
All centralized prediction markets are separated by borders and legislation. The issue is that a prediction market power is
directly proportional to its scale. The more business players and regulators there are, more the entry to the markets is
limited, reducing its effectiveness.
In addition, centralized markets have a low betting cap, which prevents actors who choose to make high-risk/high-reward
bets from participating.
This exchanges normally charge trading commissions and take a share of the gains since they act as an intermediary. If you
are a frequent customer, both of these payments will add up quickly.
Finally, a shortage of consumers results in lower participation, making these markets highly illiquid.
Advantages of DeFi Prediction Markets
DeFi has no centralized ownership, and this phenomenon is considered as the heart of DeFi. Due to the reason of having no
centralized ownership, DeFi also enjoys some benefits over CeFi.
● The lack of a single overseer allows for free and fair competition in markets. Anyone, everywhere, at any moment,
will bet on any result.
● DeFi prediction markets provide you access to assets that were previously unavailable to you.
● If users so like, they can even build their own markets.
● Since DeFi prediction markets are devoid of intermediaries, counterparty risk is eliminated, and fees are significantly
reduced.
● Open and unrestricted participation improves the pool's profitability, significantly boosting the potency of DeFi
prediction markets.
DeFi Insurance
DeFi Insurance
A finance sector is generally a risky place, and therefore, it is imperative to have a mechanism that guards against risks and
threats.
DeFi Insurance is one such idea that acts as a protective gear for the DeFi ecosystem.
The transparency, immutability, and trustless aspect of Blockchain that forms the foundation of DeFi have the ability to
disrupt unethical functioning.
Decentralized insurance protocols serve as protections for the crypto industry by exhibiting security steps.
There are several use-cases for decentralized insurance that can help avoid certain outcomes such as smart contract theft,
cyber-attacks on exchange sites, and other crucial incidents.
Use-Cases of Decentralized Insurance
Use-Cases of Decentralized Insurance
Crypto Wallet Insurance: Crypto Wallet insurance aims to protect against the risk of piracy and attacks on the crypto wallet
and smart contracts.
Collateral Protection for Crypto-backed loans: In the case of Crypto loans, if the collateral provided by the borrower is
destroyed somehow, then the loan is paid off by the insurance policy. Various companies such as Etherisc, Celsius, Libra
Credit, and others have established a consortium that safeguards collateralized crypto-backed loans.
Smart Contract Cover: Another crucial product of DeFi insurance is Smart Contract Cover. In this product, insurance covers
the loss in case the designated smart contract address is hacked or attacked.
Additionally, it also covers those losses where the funds are permanently missed and cannot be recovered.
Benefits of DeFi Insurance
Directed Acyclic Graphs
(DAGs)
Understanding DAG
The Directed Acyclic Graph (DAG) is a DLT variation that has been presented as a Blockchain alternative.
Due to their arrangement in a directed graph, the cooperating nodes of a DAG are capable of cross verification.
The use of DAG improves the network's scalability and lowers transaction fees by allowing fee-free nano-transactions
DAG does not require miners or the underlying energy-intensive infrastructure since it achieves consensus without
implementing the classic hash-protected PoW.
Significant Features of DAG
Scalability: DAG is well-known for its nearly limitless scalability. In contrast to previously distributed ledgers, DAG improves
scalability as the network grows
Compatibility: By implementing transaction fee-free strategies, DAG, as a decentralized channel, allows participants to make
fast micro or even nano-transactions.
Resilient: Using the Winternitz one-time signature mechanism, DAG makes the underlying distributed ledger less susceptible
to quantum computers with higher-level computing characteristics.
Validation: DAG's quantum resistance allows for masked authenticated messaging and parallelly lined transactions, which is
a great way to transform data using encryption and authentication techniques.
DAG-Based Blockchain
DAG-based blockchain has been proposed as the next generation of Blockchain.
It inherits the key features of both DAG and Blockchain.
The distributed ledger encapsulates transactions in blocks using a DAG structure. It uses a verification mechanism in which
every new transaction must be validated by at least two previous transactions before being added to the Blockchain.
Individual transactions in a DAG give validation for each other. Users on the network can both mine and validate
transactions, but they cannot validate their own. This usually signifies that there is little or no need to pay fees in a DAG.
Advantages and Disadvantages of DAG
Advantages:
DAGs are highly suited to enormous numbers of transactions, including micro and nano-transactions, because they scale
very effectively and prevent or reduce user fees.
DAGs also eliminate the need for miners and, as a result, mining equipment, resulting in reduced energy consumption.
Disadvantages:
As the number of Blockchain transactions grows, so does the amount of storage and network bandwidth required.
DAG projects have so far included centralized features such as central co-ordinators, pre-selected validators or 'witness'
nodes, or completely private network systems. They are unable to sustain 'pure decentralization' till date.

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Introduction to the Certified

Blockchain Expert (CBE)

Reinforce Blockchain expertise as a unique and self-regulating profession.

● Investment Bankers, Consultants & Advisors

Prove your Blockchain skills & understanding.

Grasp a deeper understanding of Blockchain & how it works.

Basic knowledge of Computer Science.

Awareness of different blockchains like Bitcoin, Ethereum etc.

Motivation to acquire a profound understanding of Blockchain.

1 hour for assessment exam.

Training will be online.

Training can be consumed as per candidate’s availability & online speed.

You need to acquire 60+ marks to clear the exam.

You can take the exam for a maximum of 3 times.

Module 2: Origin of Blockchain Technology

Module 3: Introduction to Blockchain

Module 5: Blockchain Ecosystem

Module 6: Blockchain Mining

Module 8: Security and Privacy

Module 9: Other Consensus Algorithms in Blockchain

Module 10: Blockchain Solutions - Steps and measures

Module 12: Other Use-Cases of Blockchain

● Trust is never stable in the financial world.

The widely used and most popular network architectures are:

The advantages of this approach are:

The pros of distributed systems are:

● The system is highly fault-tolerant.

The cons of using distributed systems are:

● It is more difficult to deploy a network.

● The header of the HashCash looks similar like:

● The header contains:

● The smallest subunit of Ether, the wei, is named after him.

● The bitgold system that was proposed by Nick Szabo is non-fungible.

Blockchain is based on decentralized technologies. This functions as a peer-to-peer (P2P) network.

Some real-life examples:

Copyright © Blockchain Council www.blockchain-council.org 2

“Book = Blockchain, Page = Block, An entry in page = Blockchain Transaction”

Entries in page Blockchain Transactions

Copyright © Blockchain Council www.blockchain-council.org 3

Copyright © Blockchain Council www.blockchain-council.org 4

Copyright © Blockchain Council www.blockchain-council.org 5

Copyright © Blockchain Council www.blockchain-council.org 6

Copyright © Blockchain Council www.blockchain-council.org 7

Copyright © Blockchain Council www.blockchain-council.org 8

Copyright © Blockchain Council www.blockchain-council.org 9

CENTRALIZED DECENTRALIZED DISTRIBUTED

All nodes in a P2P distributed network are equal to each other.

Peer-to-Peer systems are classified as:

Basis of comparison Blockchain Cryptocurrency

Nature A technology that records The tools used in the virtual

Use Record transactions Make payments, investments,

Value Have no monetary value Have monetary value

Mobility Can’t be transferred Can be transferred

Bitcoins are not distributed or funded as an asset by any banks or govts.

Meagre Transaction Fee: Bitcoin charges a minimal fee for transfers.

Fast Network Process: The payment process is quick in Bitcoin network.

Non-Refundable: Once sent, Bitcoins cannot be refunded.

A public blockchain is decentralized and has no single network-controlled entity.

Well-known examples of a public blockchain are Bitcoin and Ethereum.

Example: R3’s Corda Blockchain

Permissionless and Permissioned and Permissioned and

● Consensus ● Pre-approved ● Pre-approved

Transaction Speed Slow Lighter and faster Lighter and faster