1. Let’s build a Blockchain!
(In 40 minutes)
So good afternoon! Still got some every left? Thank you for coming to this session. My name is Michel Schudel. I’m a software developer from a Dutch IT company called Craftsmen, I’m currently working for Dutch Railways, buidling systems for traffic control, very interesting stuff. So today, let’s build a blockchain from scratch and hopefully have it working in 40 minutes!
@MichelSchudel
#technation

2. So why this session. I’ll explain. Does anyone have any cryptocurrency
So why this session? I’ll explain. Does anyone have any cryptocurrency? How’s it going so far? Well, I started to get really exited about all these crypto currencies and the technology behind them. So I started looking for articles. Problem was, the articles were either like this:

4. …or this, way too complex examples that also pulled in signing, double spending etc.

6. Central authority Ledger transaction transaction transation
Distributed
ledger
transaction
Central
authority
Ledger

7. A Blockchain is an implementation of a distributed ledger
B1B2B3
B1B2B4
In essence, a blockchain is…. Each block contains one or more transactions, and each block has some kind of backreference to the previous block. This will give the blockchain its immutability.
Furthermore, a blockchain is distributed. So each participant in the network has the same copy of the blockchain. So if you’re the odd one out, you won’t be accepted as having a valid blockchain.

8. A Blockchain is an sequential, immutable chain of records called Blocks
transaction
Block
transaction
Block
transaction

9. Immmutability is implemented by hashing
index : 1
previous hash: 0
Genesis block
index : 2
previous hash
payload
transaction
index : 3
previous hash
payload
transaction
Important point to discuss is that immutabilty is implemented by hashing. Each block contains a hash of the previous block. You can imagine that if you change a transaction in block 2, all subsequent block’s hashes will change as well. So you’ll have to recalculate all these hashes as well. Apart from convincing everyone your blockchain is the correct one, making new blocks or changing existing blocks is not easy. It requires something called proof-of-work, which we will see when we’re going to build the blockchain.
transaction

10. Let’s build a Blockchain, then!
Kudo’s

11. Let’s build a Blockchain, then!
GET /api/blockchain
POST /api/createtransaction
GET /api/pendingtransactions
POST /api/mine
API
Interacts
with
BlockchainRestController
Network
Manages
Manages
Blockchain
TransactionPool
Has
Has
Block
Transaction
Block
Transaction
Block
Transaction
Block
Transaction

12. Step 1: Create the initial blockchain
index : 1
previous hash: 0
Genesis block
So, let’s get started with an initial block! Not to worry about this hashing thingy, let’s just set up the model, right?

13. Step 2: Create something to store in the blocks
Kudo’s (from, to, kudos)
Pool of transactions
Out of scope:
Transaction integrity (signing)
Transaction inputs and outputs
Transaction pool
transaction
transaction
transaction

14. Step 3: making (mining) a new block
Block should contain hash of previous block (immutability, trust)
Creating a block should give a reward (incentive, generation transaction)
Creating a block requires proof-of-work (supports consensus)
index : 1
previous hash: 0
Genesis block
index : 2
previous hash
payload
transaction

15. Proof-of-work It should be hard to create a new block
Makes cheating unattractive
It should be easy to verify a new block

16. Remember this Nonce thingy?
Creating a proof-of-work (hard)
“(new block with nonce x)”
“00005c3df8...”
SHA256 hash
X = 100
Verifying proof-of-work (easy)
“(new block)”
“00005c3d2d...”
SHA256 hash

17. Step 4: consensus with other nodes
The longest blockchain that is valid “wins”
A blockchain is valid when
Previous hash field of each block matches hash of previous block
Proof-of-work (nonce) is verified and correct for each block

18. Step 5: Implementing decentralization
Transactions are propagated
Everybody should have the chance to mine
Blocks are propagated
Validation is performed before accepting
This could prevent downloading all chains

19. https://gitlab.com/craftsmen/workshop-blockchain
Summary
We created a blockchain in 40 minutes with:
Blocks
Transactions
Mining
Reaching consensus
Propagation
Now go and build one yourself!

20. https://gitlab.com/craftsmen/workshop-blockchain
@MichelSchudel

21. (in case you didn’t see the demo)
Code slides
(in case you didn’t see the demo)

22. Create the block structure
public class Block { private long index; private Set<Transaction> transactions = new HashSet<>(); private String previousHash; private long nonce;
…getters, setters, toString etc }

23. Making the initial chain
public class Blockchain { private LinkedList<Block> blocks = new LinkedList<>(); static Blockchain create() { Blockchain blockchain = new Blockchain(); Block block = new Block(); block.setIndex(1); block.setPreviousHash("0"); block.setNonce(0); blockchain.blocks.add(block); return blockchain; } }

24. Creating a transaction
public class Transaction { private String id; private String from; private String to; private int kudos;
..getters, setters…
… equals and hashcode based on id only! }

25. Creating a transaction pool
public class TransactionPool { private Set<Transaction> transactions = new HashSet<>(); public void addTransaction(Transaction transaction) { transactions.add(transaction); } public void clearTransactions() { transactions.clear(); } public Set<Transaction> getAllTransactions() { return new HashSet<>(transactions); } }

26. Creating a transaction
@PostMapping("/api/createtransaction") public long Transaction transaction) {
//give the transaction an id
transaction.setId(UUID.randomUUID().toString());
//add the transaction to the pool
transactionPool.addTransaction(transaction);
//return the height of the next block
return blockchain.height() + 1; }

27. Mining a new block
@PostMapping("/api/mine") public Block mine() { Block block = getBlockchain().mine(transactionPool.getAllTransactions()); transactionPool.clearTransactions(); return block; }

28. Mining a new block public class Blockchain {
public Block mine(Set<Transaction> allTransactions) { Block block = new Block(); block.setIndex(this.blocks.size() + 1); block.setPreviousHash(DigestUtils.sha256Hex(blocks.getLast().toString())); block.setTransactions(allTransactions); //create reward Transaction reward = new Transaction(); reward.setId(UUID.randomUUID().toString()); reward.setFrom(""); reward.setTo("Me!"); reward.setKudos(3); allTransactions.add(reward); block.calculateProofOfWork(); blocks.add(block); return block; } }

29. Proof of work public class Block { …
public void calculateProofOfWork() { this.nonce = 0; while (!DigestUtils.sha256Hex(this.toString()).startsWith("0000")) { this.nonce++; } } }

30. Comparing with other blockchains
In your service…
public void init() { this.blockchain = Blockchain.create(); this.blockchain = network.retrieveBlockchainsFromPeers() stream() filter(b -> b.isValid()) filter(b -> b.height() > this.blockchain.height()) max(Comparator.comparing(Blockchain::height)) orElse(this.blockchain); }

31. Comparing with other blockchains
public boolean isValid() { for (int i = blocks.size() - 1; i > 0; i--) { Block currentBlock = blocks.get(i); Block previousBlock = blocks.get(i - 1); if (!previousHashMatches(previousBlock, currentBlock)) { System.out.println("previous hash doesn't match!"); return false; } if (!currentBlock.isValid()) { System.out.println("proof of work is invalid"); return false; } } return true; } private boolean previousHashMatches(Block previousBlock, Block currentBlock) { return currentBlock.getPreviousHash()
.equals(DigestUtils.sha256Hex(previousBlock.toString())); }

32. Comparing with other blockchains
public class Block { …
boolean isValid() { return DigestUtils.sha256Hex(this.toString()).startsWith("0000"); } }

33. Propagating transactions
@PostMapping("/api/createtransaction") public long Transaction transaction) {
…create transaction…
network.notifyPeersOfNewTransaction(transaction); }

34. Receiving transactions from the network
@PostMapping("/api/addtransaction") public void Transaction transaction) { if (!transactionPool.getAllTransactions().contains(transaction)) { transactionPool.addTransaction(transaction); network.notifyPeersOfNewTransaction(transaction); } }

35. Propagating blocks @PostMapping("/api/mine") public Block mine() {
Block block = getBlockchain().mine(transactionPool.getAllTransactions()); transactionPool.clearTransactions();
//propgate transaction
network.notifyPeersOfNewBlock(block);
return block; }

36. Receiving blocks from the network
@PostMapping("/api/addblock") public void Block block) { //only add block if it is valid
if (blockchain.isValid(block)) { blockchain.addBlock(block);
//clear all transactions that are already in the block transactionPool.clearTransactions(block.getTransactions());
//propagate block through the network
network.notifyPeersOfNewBlock(block); } }

37. Receiving blocks from the network
public class Blockchain { ... private boolean previousHashMatches(Block previousBlock, Block currentBlock) { return currentBlock.getPreviousHash()
.equals(DigestUtils.sha256Hex(previousBlock.toString())); } public boolean isValid(Block block) { return block.isValid() && previousHashMatches(blocks.getLast(), block); } public void addBlock(Block block) { blocks.add(block); } }