Functional steps of the Blockchain
Transcript
[Music] so now that we understand what is the blockchain we'll go into a conversation on the technology itself what is the technology that powers the blockchain so let's not think of it as a technology more as a process I promised that this wouldn't be a over technical session so you know we'll keep it very light and talk about the process behind the blockchain the step one application request a transaction that's super simple to think of from the high level me and you agree to a purchase
that transaction via the application is then broadcast out to the blockchain what is the bot change and exactly so when I say it's broadcast out to the blockchain what does that look like practically well that's a set of nodes on a network that network can be a local area network that's just within your for corporate walls or it can be as distributed as a global set of net of pcs or servers spread across the globe so you figure it as small as a few pcs in
a room versus millions of pcs or observers spread across the globe that transaction is Fredd is broadcast out to either all of those nodes or a subset of the nodes most of the blockchain technologies broadcast those transactions out to all of the nodes whether or not those each one receives the broadcast or not you know what that's not relevant the concept today is that every node receives the transaction then there's the validation of the transaction and this is where I think some of the challenges will
blockchain at least some implications of blockchain comes up and Bitcoin is a great example of this when I buy a service let's say from a eBay seller I'll use PayPal to conduct the transaction there's two levels of protection when I make that purchase the first level of protection is eBay eBay is saying that the seller and the buyer are both validated they are trusted entities within this network so as a seller I have a a base core I have an eBay history as a buyer I
also have an eBay score I have an eBay history I have credit card numbers in a bank accounts on record with a trusted provider provider of eBay then there's a second layer of protection it's my payment system whether that's PayPal or a traditional credit card processor that credit card processor guarantees the seller is that I will receive you as a seller I will receive the funds and as a buyer the seller will provide the services promised if either one of those things break down then I
have recourse at the eBay layer so layer so the platform itself promises that there's recourse then also have validation at the payment processor layer whether it's PayPal or Visa as a seller or a buyer if I have a dispute I can take it to each one of those entities blockchain in itself does not provide that verification of validation detail the promises of that transaction it's a ledger it just says that the buyer and the seller agreed upon it therefore it's a recorded transaction and that transaction
can be anything and it can be taking a picture and saying that you know what the picture that was taken is the picture that was taken we sent out a hash everyone agrees upon that we do some mathematical calculations whether it's the whole network or a subset of network has agreed that that what the application sent is what was received by the network validated so there are some blockchain solutions that look to solve that reputation problem but the whole point of sending the transaction out to
the blockchain is so that that the entire network agrees upon the integrity of the data not necessarily the validity of the data step 4 now that the blockchain has completed the transaction that a an immutable record is created in the blockchain so a note can go down in the blockchain and this is I think the beauty of blockchain we can as a let's say that I have a supply chain I'm part of the supply chain blockchain warehouse gets infected with one a cry and I have
to rebuild my entire computer systems from tape backup and I no longer have those transactions and my copy of the blockchain well that's irrelevant that data set is still stored in the global supply chain blockchain and that I have no reasonable risk of losing that transaction data now what consists of the transaction data obviously time but some type of timestamp the details of the transaction so it could be party XP issued a payment of $45 for Y product but don't think of it of just you
know that small a metadata associated with the transaction a blockchain can store any amount of data it could actually store let's say a video file and that video file is part of the ledger itself and that and I think that's one of the both interesting points and challenges of the blockchain obviously as the data sets get bigger and bigger and you talk about a distribute ledger sending a entire one gig video file across a million devices becomes a logistical nightmare but the flexibility of the blockchain
is there that you can have any amount practically any amount of data within the blockchain itself to complete the trend or to record transactions
