Blockchain and data processing

Lecture 15-16: Blockchain and data processing

-understand the motivation for blockchain technology

• remove the middle man, that is, no central, trusted point of control
• less administration, less bureaucracy
• less fees
• faster transactions
• more control over records handed to users
• ability to be anonymous
• users can verify data in the blockchain
• more secure solution(maybe)

-understand what problems is it trying to solve?

-understand what are the benefits of blockchains

Benefit of blockchain

• A middleman (trusted party) holds private records
  • Money: transfer money -> bank
  • Health: share healthy data -> hospital/doctor
  • Education: share academic credentials -> university
• NO middleman:
  • No central, trusted point of control
  • Benefits:
    • Less administration
    • Less expensive
    • Faster transactions
    • More control over records handed to users
    • Ability to be anonymous
    • User can verify data in the blockchain
    • More secure solution

-understand how are blocks chained together in the blockchain and what is the benefit of this chaining?

• Blockchain = peer to peer network of computers each running blockchain software
• Each computer in the blockchain network has a complete copy of public ledger
• File = sequence of blocks
• each block contains a header & some data
  • ID of parent block
    • If parent block is modified -> it header change -> parent’s ID change
    • If parent’s ID changes -> change previous block has insider the child’s header …
    • Changing a block produces a cascade effect requiring recalculation of all subsequent blocks
  • Timestamp of block’s creation
  • Hash of the data inside a block
• Block ID = hash of its head
  • If block’s header changes -> block’s ID changes
• Adding data
  • User’s computer broadcasts data to neighbours it is connected to in the blockchain network
  • Neighbours receive the fact, validate the correctness of its format
  • Neighbours broadcast it to peers they are connected to
  • These peers recursively follow the same procedure
  • At some point, a peer will aggregate a collection of facts it has received, place them into a bloc, create an appropriate header & broadcast the block to its neighbour

-understand why it is virtually impossible to modify content within blocks that are part of the blockchain and what are the advantages and disadvantages of this modification property

1. why secure
   • each computer hold a copy of the ledger, the public ledger is called the blockchain (a file)
   • file is a sequecen of blocks, each block contains a header and some data(list of transactions)
   • block ID equals to a hash of its header
   • each block contains the ID of its parent block
   • therefore, any change will results in different hash results, and all of it child will change relatively
2. advantage
   • the advantage of this property is that the content is very hard to modify once it been created
   • no central authority
3. disadvantages
   • after it created, if there is a mistake, it is very hard for us to correct.
   • sometimes advatages can becomes disadvantages.

-understand how hashing is used to identify and link blocks

-understand how digital signatures be used to verify data on the blockchain

• using private key and public key, A place a digital signiture on a block, B can use public key to verify if it is true.
• Digital signature = evidence of authorising the contents of document
• Sensitive facts
  • Apply a hash to the fact
  • Adds this hash output to the blockchain along with a digital signature
  • No-one can reverse the has function to uncover the fact
  • Now fact is stored and privacy is preserved
  • Some wants to access data:
    • Can apply hash function to the fact
    • can verify the fact was digitally signed

-understand how hashing can be used to make information on the blockchain private

• applies a hash to the fact then adds this hash output to the blockchain along with a digital signature. No one can reverse the hash function to uncover the fact, and it store on the blockchain but privacy is preserved. Alternatively could encrypt the fact using Alice's public key.

-understand how blockchain might be used to deliver benefits in health and education applications

• Health
  • Patient data is added to the blockchain
    • Each visit to the doctor
    • Blood test
    • CT scans
    • Vaccinations
      • ……….
  • Data is encrypted with patient’s public key
    • Patient may provide public key to insurer / health provider -> they can review medical history
    • Reduce time, fuller information & quicker
  • E.g. Estonia
    • Developing a blockchain system for 1 million medical records
• Education
  • Issuing degrees on the blockchain
  • Uses Blockcerts system
    • Software that is built on top of the bitcoin blockchain
    • Allows education credential information to be stored
  • Advantages
    • University
      • Secure
      • Easy to access
      • Less expensive
      • Store micro-credentials
    • Student
      • Don’t need extra copies
      • cheap
    • Employer
      • Doesn’t need to talk to university
      • Trust
• Issues
  • Revocation
  • Permissions & privacy
    • The right to be forgotten