Understanding Blockchain Technology: Challenges and Applications

Grasping the concept of blockchain can be a daunting task due to its multi-faceted nature, requiring knowledge spanning web programming, network, business, economics, and more. However, educational resources and practical exercises, such as those provided in BARTS Blockchain Art Simulation, can aid in comprehending and applying blockchain principles effectively across various domains. The distributed peer-to-peer append-only database ensures secure transactions through cryptographic methods like private and public keys, hashing, and consensus protocols. Practical examples, such as the use of an imaginary digital currency called BARTS, help illustrate blockchain concepts in action, facilitating learning and application for students across different educational levels.

• Blockchain Technology
• BARTS Blockchain Art Simulation
• Distributed Database
• Cryptographic Security
• Practical Applications

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1. BARTS Blockchain ART Simulation Sean P Sanders Department of Computer Science G. Lawrence Sanders Department of Management Science and Systems SUNY-Buffalo This material is in part supported by the NSF under grant No. DGE- 1754085

3. I find it hard to grasp the concept of blockchain in general. Not that I don't understand what it is but to put things together to make a decentralized ledger is quiet (sic) a challenge. I hate the fact that the concepts are (sic) not relatable. Especially blockchain that requires whole knowledge of web programming, network, business, economics, system analysis .. much more. It s on another level. I don t find machine learning or deep learning to be this challenging. Although all these concepts (sic) take a good amount of time to grasp, the blockchain is still harder to grasp and implement. https://www.reddit.com/r/ethereum/comments/92z4ok/how_difficult_is_bloc kchain_technology_to/

4. Technology & Innovation Management Develop business plans and application prototypes. https://marvelapp.com/9c3aa9g Added 12 hours of blockchain concepts. BARTS: Blockchain Art Simulation Four exercises using hashing concepts Harvard BITFURY case: Bitfury: Blockchain for Government Harvard case : Snapper Future Tech: Land Records and Registration using Blockchain. Brief overview of Ethereum smart contract programming using solidity. Overview of an Android application using Java and Ethereum blockchain. Some students develop prototypes of blockchain applications for final projects. https://marvelapp.com/5dj1f6e

5. Where Material Has Been Used Material used in graduate MIS technology course, middle school and high school GenCyber camp , and an undergraduate business course. BARTS simulation and introduction to blockchain concepts are the foundation. The purpose of this exercise is to illustrate how blockchain concepts can be illustrated using an imaginary digital currency called BARTS, to buy and sell drawings.

6. Distributed peer-to-peer append only database Transactions are secured and authenticated using private and public keys, hashing, and consensus protocols (proof -of-work and proof of stake). B1 B2 B3 B4 B5 Sean B1 B2 B3 B4 B5 Gives 2 Coins to B1 B2 B3 B4 B5 Jody B1 B2 B3 B4 B5

7. https://emtemp.gcom.cloud/ngw/globalassets/en/newsroom/images/graphs/Blockchain-HC-2019.pnghttps://emtemp.gcom.cloud/ngw/globalassets/en/newsroom/images/graphs/Blockchain-HC-2019.png

8. Inside The Cryptocurrency Revolution | VICE on HBO Published on Dec 27, 2019 Bitcoin s emergence as a global digital currency has been as revolutionary as it has been erratic. But while fledgling investors obsess over every fluctuation in the cryptocurrency market, nation- states are more interested in the underlying blockchain technology and its ability to revolutionize how business is done on the internet and beyond. VICE's Michael Moynihan travels to Russia with Vitalik Buterin, inventor of the ethereum blockchain, to get a front-row seat to the geopolitical tug of war over Internet 3.0. https://www.youtube.com/watch?v=u-vrdPtZVXc&feature=youtu.be

9. Topics of Discusison Introduction: What is a blockchain? Where blockchain is used What is Mining and Hashing? BARTS Exercise Summary

10. Blockchain BARTS Introduction Satoshi Nakamoto developed the digital currency Bitcoin Blockchain serves as the public ledger. It is managed autonomously through the use of a peer-to-peer network of miners, along with a timestamp server. The miners assist in validating Bitcoin transactions between two parties that are to be added to the blockchain. The miners get paid for validating transaction from fees, and by receiving newly created Bitcoins

11. Where the blockchain is used? Stores Government Supply Chain Financial Institutions Automated Governance Healthcare

12. Benefits of blockchain 1. Eliminates the middle person or third party. 2. Solves the double spending issue. 3. Creates an immutable ledger that cannot be modified.

13. Hashing is a key concept Hashing algorithms are used to verify digital currency transactions and then to add them to the distributed blockchain ledger. This process of validation is applicable to a variety of applications, not just cryptocurrency applications.

14. A hash is like a fingerprint of the data Fingerprints are used to authenticate identification. They are unique and the patterns do not change over ones lifetime. Once the fingerprint is captured, the raw data is processed to extract the essential data called minutia. Minutia consist of ridges, valleys, curvature and thickness. https://semiengineering.com/fingerprint-senor-technology-and-security-requirements/ https://www.fingertec.com/companyprofile/development/wp-fingerprint.html

15. Hashing Hashing Hash functions take text, convert it into binary digits and run Hash functions take text, convert it into binary digits and run mathematical operations on the digital data, and transform it mathematical operations on the digital data, and transform it into a fixed length number of binary digits. Hashing is the into a fixed length number of binary digits. Hashing is the process of converting a string of characters into a short fixed process of converting a string of characters into a short fixed- - length value. length value. A hash is implemented by using a Secure Hashing Algorithms A hash is implemented by using a Secure Hashing Algorithms (SHA) in a computer program, a programming function or a (SHA) in a computer program, a programming function or a subroutine. subroutine. Examples of hash functions are SHA Examples of hash functions are SHA- -224, SHA SHA SHA- -512, SHA 512, SHA- -512/224, and SHA 512/224, and SHA- -512/256. The number of fixed binary digits output for the hashes range The number of fixed binary digits output for the hashes range from 160 bits for SHA from 160 bits for SHA- -224 to 512 bits for the SHA 224 to 512 bits for the SHA- -512. 224, SHA- -256, SHA 512/256. 256, SHA- -384, 384, 512.

16. H Hash Example ash Example A hexadecimal representation of data. A hexadecimal representation of data.

17. Again, the hash is like a fingerprint of the Again, the hash is like a fingerprint of the data: Data goes in and hash comes out data: Data goes in and hash comes out Hello World b08022d315cf1eb12d2665bded0e6af40653c0a0be975232fb49bcbd021cfc 36 SHA 256 Hash algorithm The data fingerprint

18. Notice the hash value is different after processing two data stings through the SHA 256 Jody 3 BARTS to Sean 6341a2308b516ba386a8290d14d82fd82eb25b4ed0ecbb7eecc8ff9ff9f80f0c Jodi 3 BARTS to Sean c2608a6a1f62e75cb87e4f9bdff4bfc6afb54f886c2c9848a4a1ca044250ed39

19. SHA 256 SHA 256 the SHA256 Hash SHA256 Hash Algorithm Process Algorithm Process Details on Details on the

20. SHA 256 SHA 256 the SHA256 Hash SHA256 Hash Algorithm Process Algorithm Process Details on Details on the

21. 1. Text is input into the SHA256 algorithm 2. Converts text into binary 3. Does a number of transformations 4. Outputs a 256 bit number in hexadecimal format 1. Buffalo is always warm 2. 01000010 01110101 01100110 01100110 01100001 01101100 01101111 00100000 01101001 01110011 00100000 01100001 01101100 01110111 01100001 01111001 01110011 00100000 01110111 01100001 01110010 01101101 00001010 3. 0001011010001000100101010010100001101001110011100011000000000 0000000000000000000000000000000000000000000000000000000000000 0000000000000000000000000000000000000000000000000000000000000 0000000000000000000000000000000000000000000000000000000000000 0000000000 SHA 256 Hash algorithm 4. 45a2254a1a738db3b789c2b6d57e871e75ed8d6c3ee76b5022875a419b1a8ab5

22. NOTE: It does not matter how large the text is; the hash function only outputs a 256 bit string in hexadecimal format. Four score and seven years ago our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal. Now we are engaged in a great civil war, testing whether that nation, or any nation so conceived and so dedicated, can long endure. We are met on a great battle-field of that war. We have come to dedicate a portion of that field, as a final resting place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this. But, in a larger sense, we can not dedicate -- we can not consecrate -- we can not hallow -- this ground. The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us -- that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion -- that we here highly resolve that these dead shall not have died in vain -- that this nation, under God, shall have a new birth of freedom -- and that government of the people, by the people, for the people, shall not perish from the earth. Abraham Lincoln November 19, 1863 4f23fe7c74321509282780d70627bb9b537411855beb823ee52a0cfd7a1c76d9 SHA 256 Hash algorithm

23. Great overview of why you cant cheat at Bitcoin. From a twitter feed at: https://twitter.com/JacBurns_Comext/status/8 78587756431233024

24. ARTBARTS Inc. at https://artbarts.com/ The Blockchain ARTSimulation (BARTS) Blockchains help solve problems in both the public and private sectors involving government, business, medical, security, food processing, and transportation applications. To aid in the process of understanding blockchain concepts, we are introducing the Blockchain ART Simulation (BARTS). The simulation is used to illustrate the interrelationship of blockchain mining, cryptocurrency, and hashing concepts. The hash algorithm, SHA3, is used in cryptocurrency mining to make sure that there is no cheating, double spending, and to eliminate denial of service attacks. To participate as a miner, please bring a laptop, tablet or smartphone that is wifi enabled. ARTBARTS Inc. is a blockchain-based network for buying and selling pencil drawing and sketches (Figure 1). The initial coin offering for the 200 million BARTS tokens took place in July of 2018. Two hundred famous pencil artists received from 1,000 to 20,000 BARTS tokens if they agreed only to sell their pencil drawings through the ARTBARTS network for two years. Over 10,000 gallery owners, investors, dealers, collectors and even artists purchased 60 million BARTS for approximately $100 million in US funds. There are now over 60,000 artists and buyers participating in the marketplace. BARTS miners must use the interactive online mining software for solving a hash problem.

25. The BARTS Simulation https://marvelapp.com/43gbd1f An example of a BARTS Wallet https://marvelapp.com/43gbd1f

26. BARTS Players Coordinator or instructor 3 Artists 3 Gallery Owners At least 3 Mining Pools with two miners in each pool. One of the miners will be the spokesperson for the mining pool.

27. Artist Drawgud creates a picture and sells to Flipflop Mining pools try to find a nonce with a leading zero for the transaction Transaction is added to ledger after 50% of mining pools agree that it is a valid transaction

28. Artists use this sheet to draw. The Gallery owners enter Sender name, amount and receiver.

29. BARTS Simulation Process Instructor: Is like the core blockchain coordinating software Announces the transaction to everyone in the room. I.e. Sean 2 Matt Mining Pools: Placer Kings, Gold Gulch and Spider Miners, etc. Each member of mining pool will use the BART Mining Program at www.artbarts.com Start the nonce at 1 and keep incrementing until there is a leading zero on SHA 256 hash. Yells Eureka when a leading zero is found. Instructor Asks the individual that yelled eureka what nonce value generated the leading zero. Instructor announces the nonce value to the miners. If three or more mining pools can generate a hash with the same leading zero, then the transaction is added to the blockchain using https://tinyurl.com/BARTSBlockchain

30. Lets practice Go to https://artbarts.com/ Click on BARTS Mining Process Enter in Sender Name: Sean Enter in Amount: 2 Enter in Receiver Name: Matt Enter in Nonce: 1

31. Hash Program for each miner at https://tinyurl.com/BARTSMining

32. Lets begin the simulation Who wants to draw? Who wants to buy the drawings? The remaining individuals are miners and will be in one of the eight mining pools.

33. Debriefing Lets go over additional details

34. This is a simulation: Many similarities and several differences. Contd Bitcoin blocks usually contains 1,000 to 3,000 transactions. Miners also receive transaction fees for Bitcoin. The instructor is a centralized validator of the transactions and the participants. Digital currencies use many nodes in a peer-to-peer network to verify transactions.

35. Consensus approaches differ Proof of work (Bitcoin and BARTS): Miners try to solve hash problem. The first miner to solve the hash problem will get a reward, (12.5 bitcoins) their transaction will be added to the blockchain after it has been validated by other miners. Proof of stake (Ethereum): One miner (actually called validator) is sort-of-randomly elected or selected to mint or forge new blocks. The minter or forger node with the highest number of coins in possession has a higher probability of being elected as the forger for the block. 51% Attack is supposedly harder with proof of stake. Problem with proof of stake is that rich can get richer.

36. Gas in Ethereum-type blockchains In Ethereum-type ledgers, you can pay additional cryptocurrency to have your transaction added to the blockchain faster. This is called gas and it can be used to reduce transaction times.

37. Research and Development The BARTS simulation can illustrate how R&D can be used to reduce the time to find a hash with a leading zero and increase mining performance. For example, process innovation would occur when miners in a mining pool start at different numbers for the nonce. For example, if there were three miners, one miner could start at 1, the second at 11, and the third at 20. Another way to increase mining performance is to find or develop a program to automatically generate a hash with a leading zero. Of course, the instructor could then have the miners generate a hash with more leading zeros.

38. Mining complexity is controlled by number of leading zeros The number of leading zeros required for a transaction can be used to control the speed of the mining process. If we had a room with 200 miners, we could have them generate a hash with two leading zeros. That would on average take 162 or 256 attempts to find a text with two leading zeros.

39. Digital currency market demand concepts Drawings can only be bought and sold through the BARTS market using the BARTS transaction paper. Before the simulation was started, 50 out of the 200 million BARTS cryptos were sold at an initial coin offering. People purchased the original BARTS using a credit card or direct deposit. Demand is created, if people had to turn to the BARTS environment to purchase the lovely drawings you saw today.

40. Names of BARTS participants would be encrypted in an actual crypto application The name of the parties participating in the BARTS transactions would be hashed encrypted signatures. Names are typically not used with cryptos. The process of authentication and validation would involve something like the elliptic curve cryptography. This is a very technical topic that could be covered in more technical courses. It is essentially a secure user-id/password-type validation procedure.

41. More on the Bitcoin Address We use names such as Matt, Sean, Drawgud, or Crafty instead of a 160 bit hashed public key as the Bitcoin destination address. A Bitcoin address is a virtual location. It is the public half of the asymmetric public and private key pair. A new keypair is generated for each receiving address (with newer HD wallets, this is done deterministically). The public key and their associated private keys (or the seed needed to generate them) are stored in the wallet data file. This is the only file users should need to backup. A "send" transaction to a specific Bitcoin address requires that the corresponding wallet knows the private key implementing it. This has the implication that if you create an address and receive coins to that address, then restore the wallet from an earlier backup, before the address was generated, then the coins received with that address are lost; this is not an issue for HD wallets where all addresses are generated from a single seed. Addresses are added to an address key pool prior to being used for receiving coins. If you lose your wallet entirely, all of your coins are lost and can never be recovered.We do not use a private key, which is like a password, to make sure that the sender is a valid owner of BARTS tokens. https://en.bitcoin.it/wiki/Technical_background_of_version_1_Bitcoin_addresses

42. The 5 Dollar wrench Attack

43. Survey of Blockchain Content Surveyed MS Students last year and this year about the blockchain concepts. This year had 76 out of 120 students completed the survey after the December 31 2019. The results last year and this year are surprisingly similar.

44. The material covered in the blockchain teaching module helped me gain a clearer understanding of blockchain concepts Mean 4.11 Count 75 1 Strongly Disagree to 5 Strongly Agree

45. What is the percentage of new understanding of blockchain concepts did you get from the teaching module? Minimum Maximum Mean Count 19 100 68 76

46. I would like the following additional material presented in the course ? 2019 Mean 3.97 4.08 3.85 4.22 4.22 Etherium and smart contracts. Blockchain development platforms Tokens for designing new blockchain applications. Blockchain applications in healthcare, operations, finance and government The economics of cryptocurrency 2018 Mean 4.09 4.17 4.04 4.26 4.15 Count 107 109 105 104 108 Etherium and smart contracts. Blockchain development platforms Tokens for designing new blockchain applications. Blockchain applications in healthcare, operations, finance and government The economics of cryptocurrency

47. How many addition hours of blockchain and cryptocurrency concepts would you like to have? Minimum 0 Maximum 50 Mean 12.27

48. I liked the BITFURY case Mean 4.31

49. I liked the Snapper Future Tech case I messed up this question and left off the Strongly Agree anchor on the survey. However 67 out of 76 Agreed that they liked the case.

50. Questions? Terms of the Trade

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