Blockchain and Cryptography

What You’ll Learn 📚

• Core concepts of blockchain and cryptography
• Key terminology with friendly definitions
• Step-by-step examples from simple to complex
• Common questions and clear answers
• Troubleshooting common issues

Introduction to Blockchain and Cryptography

Blockchain and cryptography are two of the most talked-about technologies today. But what exactly are they? 🤔 Let’s break it down!

What is Blockchain?

Imagine a digital ledger, like a notebook, that records transactions. Each page in this notebook is a ‘block’, and these blocks are linked together in a ‘chain’. Hence, the name ‘blockchain’. It’s decentralized, meaning no single person or organization has control over it. Instead, it’s maintained by a network of computers.

Think of blockchain as a shared Google Doc that everyone can access, but no one can change the past entries.

What is Cryptography?

Cryptography is the art of securing information. It involves techniques to protect data from unauthorized access. In simple terms, it’s like writing a secret message that only the intended recipient can understand. 🔐

Cryptography is like sending a locked box with a key that only the recipient has.

Key Terminology 🗝️

• Block: A record of new transactions.
• Chain: A sequence of blocks linked together.
• Decentralized: No single point of control.
• Encryption: Converting data into a secret code.
• Hash: A unique identifier for data.

Simple Example: A Basic Blockchain

class Block:
    def __init__(self, previous_hash, transaction):
        self.previous_hash = previous_hash
        self.transaction = transaction
        self.hash = self.calculate_hash()

    def calculate_hash(self):
        return hash((self.previous_hash, self.transaction))

class Blockchain:
    def __init__(self):
        self.chain = [self.create_genesis_block()]

    def create_genesis_block(self):
        return Block('0', 'Genesis Block')

    def add_block(self, transaction):
        previous_hash = self.chain[-1].hash
        new_block = Block(previous_hash, transaction)
        self.chain.append(new_block)

# Create a blockchain and add some blocks
my_blockchain = Blockchain()
my_blockchain.add_block('Transaction 1')
my_blockchain.add_block('Transaction 2')

# Print the blockchain
for block in my_blockchain.chain:
    print(f'Previous Hash: {block.previous_hash}, Transaction: {block.transaction}, Hash: {block.hash}')

Progressively Complex Examples

Example 2: Adding Proof of Work

Proof of Work is a mechanism to ensure that creating a new block requires computational effort. This prevents spam and abuse.

import hashlib

class Block:
    def __init__(self, previous_hash, transaction, nonce=0):
        self.previous_hash = previous_hash
        self.transaction = transaction
        self.nonce = nonce
        self.hash = self.calculate_hash()

    def calculate_hash(self):
        return hashlib.sha256(f'{self.previous_hash}{self.transaction}{self.nonce}'.encode()).hexdigest()

    def mine_block(self, difficulty):
        while self.hash[:difficulty] != '0' * difficulty:
            self.nonce += 1
            self.hash = self.calculate_hash()

class Blockchain:
    def __init__(self, difficulty=2):
        self.chain = [self.create_genesis_block()]
        self.difficulty = difficulty

    def create_genesis_block(self):
        return Block('0', 'Genesis Block')

    def add_block(self, transaction):
        previous_hash = self.chain[-1].hash
        new_block = Block(previous_hash, transaction)
        new_block.mine_block(self.difficulty)
        self.chain.append(new_block)

# Create a blockchain and add some blocks with proof of work
my_blockchain = Blockchain()
my_blockchain.add_block('Transaction 1')
my_blockchain.add_block('Transaction 2')

# Print the blockchain
for block in my_blockchain.chain:
    print(f'Previous Hash: {block.previous_hash}, Transaction: {block.transaction}, Hash: {block.hash}, Nonce: {block.nonce}')