Blockchain Technology

Module 1: Introduction to Blockchain

CSDC 7022 | Mrs. Manila Gupta | Computer Engineering – RCOE

Course Overview

Course Code Course Name Credits

CSDC 7022 Blockchain 3

Program Institute Prerequisite

Cryptography and System

Computer Engineering RCOE
Security
Course Objectives

1 Understand fundamental concepts and working principles of blockchain technology.

2 Analyse and compare different types of blockchain networks and their applications.

3 Evaluate cryptographic techniques used in blockchain for security and integrity.

4 Design and implement smart contracts for decentralised applications (dApps).

5 Assess real-world use cases in finance, healthcare, supply chain, and more.
Course Outcomes

CO1 Explain blockchain architecture, consensus mechanisms, and distributed ledger technology.

CO2 Compare public, private, and consortium blockchain platforms.

CO3 Apply cryptographic algorithms (hashing, digital signatures) in blockchain scenarios.

CO4 Develop and deploy smart contracts using Solidity/Ethereum.

CO5 Evaluate blockchain solutions for real-world industry problems.

Course Modules at a Glance

Module 1 6 hrs Module 2 6 hrs

Introduction to Blockchain Ethereum and Smart Contracts

Module 3 8 hrs Module 4 6 hrs

Hyperledger Fabric Blockchain Applications

Module 5 6 hrs Module 6 6 hrs

Consensus Algorithms Blockchain Security & Future

01
Introduction to Blockchain
What it is, how it works, and why it matters
What is Blockchain?

Year
Definition
2009

A blockchain is a type of Digital Ledger Technology (DLT) in which

transactions are recorded with an immutable cryptographic
signature called a HASH. Creator

Blocks of transaction records are linked together, forming a Satoshi Nakamoto

CHAIN — distributed across thousands of nodes.

1st Use
— Satoshi Nakamoto, Bitcoin Whitepaper (2009)
Bitcoin
Why Do We Need Blockchain?

The Problem The Solution

- Centralised financial systems controlled by banks + Decentralised peer-to-peer network

- High transaction fees + Low-cost or no-fee transactions

- Slow cross-border transfers + Near-instant settlement

- Single point of failure + Distributed across thousands of nodes

- Lack of transparency + Fully transparent and auditable

- Data manipulation by intermediaries + Immutable, tamper-proof records

Origin of Blockchain

Evolution — from secure timestamps to Bitcoin

Built on Secure Hash Functions

Haber & Stornetta propose a cryptographically secure chain of A cryptographic hash function converts
1991 timestamped documents to prevent tampering. any input into a fixed-length string.

Key properties:
- Deterministic — same input, same hash
Merkle trees added, allowing many documents to be collected into - One-way — cannot be reversed
1992 one secured block. - Collision-resistant
- Avalanche effect — a tiny change alters
the whole hash

Satoshi Nakamoto publishes the Bitcoin white paper, combining Each block stores the previous block's
2008 hashing, Merkle trees and consensus. hash, chaining blocks so that any
tampering breaks the chain.

The first Bitcoin block (Genesis block) is mined — blockchain goes

2009 live.
How Blockchain Works — Transaction Flow

1 2 3 4 5 6

Transaction Block Broadcast to Validated by Block Added Transaction

Initiated Created Network Nodes to Chain Complete

Network
User requests a Data bundled Block sent to all Block appended Record is final
consensus
transaction into a new block P2P nodes permanently and immutable
validates it
Blockchain — A Permanent Secure Record

Ledger A record-keeping book that tracks financial transactions

Permanent Once written, records cannot be deleted or modified

Secure Protected by cryptographic hashing and consensus

Chronological Transactions are ordered in time sequence

Immutable Resistant to tampering — any change breaks the chain

7 Components of a Blockchain Network

1 2 3 4

Node Ledger Wallet Nonce

5 6 7

Consensus
Hash Mining
Protocol
Component: Node

A node is any electronic device (computer, phone, server) connected to the blockchain network. Each node
holds a copy of the distributed ledger.

Full Node Partial (Light) Node

- Stores the entire blockchain history - Stores only block headers

- Validates and relays transactions - Relies on full nodes for data

- Maintains complete independence - Lightweight and fast

- Ensures network security - Used in mobile wallets

Components: Ledger, Wallet & Nonce

A distributed database maintained simultaneously across multiple nodes. Every

Ledger participant holds an identical copy. Any transaction is visible to all authorized
participants.

A software program storing public and private keys. Enables sending and receiving
Wallet cryptocurrency. Does NOT store coins — coins exist on the blockchain.

"Number Used Once" — a 32-bit field in the block header. Miners iterate through
Nonce nonce values to find a valid hash. Critical to the Proof-of-Work mechanism.
Components: Hash, Mining & Consensus Protocol

A fixed-length alphanumeric string generated by a hash function (SHA-256). Any

Hash change to input data produces a completely different hash — ensuring data
integrity.

The process of adding verified transactions to the blockchain. Miners compete to

Mining solve a complex mathematical puzzle (find the correct nonce). Winner adds the
block and earns a reward.

Consensus Rules for how nodes agree on the valid chain state. Examples: Proof of Work
(PoW), Proof of Stake (PoS), Delegated PoS. Prevents double-spending and
Protocol fraudulent transactions.
Consensus Protocol
How decentralised nodes agree on a single, valid version of the ledger — without a central authority.

What it is Why it is needed

A set of rules that all nodes follow to validate transactions In a trustless P2P network, nodes may fail or act
and add new blocks, ensuring every copy of the ledger dishonestly. Consensus prevents double-spending and
stays identical. keeps the chain consistent and secure.

Common Consensus Mechanisms

PoW PoS PoB PoET

Proof of Work Proof of Stake Proof of Burn Elapsed Time

Solve a hard puzzle Stake coins to validate Burn coins for rights Fair random wait time
Blockchain Evolution Timeline

Satoshi Nakamoto Ethereum ICO boom.

publishes Bitcoin proposed by Blockchain enters
whitepaper Vitalik Buterin mainstream

2008 2009 2013 2015 2017 2018

Bitcoin network Ethereum mainnet Hyperledger &

goes live. launches with Enterprise adoption
Genesis block mined Smart Contracts grows rapidly
Key Features of Blockchain

1 2 3

Distribution Encryption Immutability

Data stored across thousands of nodes SHA-256 cryptography and Once a block is confirmed it cannot be
worldwide — no central authority public/private keys secure all data altered or deleted

4 5

Tokenization Decentralization

Physical and digital assets represented No single entity controls the network —
as digital tokens on-chain power is distributed
Benefits of Blockchain Technology

Accuracy Cost Savings

Eliminates intermediaries, reducing transaction
Removes human error by automating verification
costs

Efficiency Security
Cryptographic protection makes tampering nearly
Speeds up settlement from days to seconds
impossible

Transparency Traceability

All participants see the same version of truth Complete audit trail for every transaction

Privacy Immutability

Pseudonymous addresses protect user identity Records cannot be altered retroactively

Limitations of Blockchain

Scalability Energy Consumption

! ! Proof of Work mining requires enormous

Bitcoin handles ~7 TPS vs Visa's ~24,000 TPS
computational energy

Storage Overhead Irreversibility

! Full nodes store the entire chain; size grows ! Transactions cannot be reversed — errors are
continuously permanent

Regulatory Uncertainty Complexity

! ! Integration with existing systems requires

Legal status of cryptocurrencies varies by country
significant expertise
Merkle Trees

A Merkle tree is a hash-based data structure. Every leaf node contains the hash of a data block; every non-leaf
node contains the hash of its children. Enables efficient and secure verification of large data sets.

Root Hash

Hash(A+B) Hash(C+D)

Hash(A) Hash(B) Hash(C) Hash(D)

Leaf nodes hold the hash of each individual transaction

Block Structure

BLOCK Header Fields Explained:

Block Header Version Protocol version number

- Version
- Previous Block Hash Links this block to the previous
Prev Block Hash
one
- Merkle Root
- Timestamp
Merkle Root Hash summarizing all transactions
- Difficulty Target
- Nonce
Timestamp Unix timestamp of block creation
Block Body
Difficulty Target for PoW mining puzzle
Transaction Counter + Transaction List
(All transactions in this block)

Nonce Value iterated to solve the puzzle

Block in Blockchain — How Blocks Connect
Each block stores the hash of the previous block, forming an unbreakable chain.

Genesis Block Block Block

Block #0 Block #1 Block #2

Prev. Hash: links Prev. Hash: links Prev. Hash:

0000000000 0x8f2a... 0x3c7b...

Data: Data: Data:

First block Tx records Tx records

Hash: Hash: Hash:

0x8f2a... 0x3c7b... 0x1e9d...

The Genesis Block is the very first block (#0). It has no real previous block, so its previous-hash is all zeros. Every later block points back to
the one before it — changing any block breaks every hash after it.
5 Layers of Blockchain Architecture

Application Layer
5
DApps, Smart Contracts, User Interfaces

Consensus Layer
4
PoW, PoS, PBFT — agreement mechanisms

Network Layer
3
P2P communication, propagation, validation

Data Layer
2
Block structure, hash pointers, Merkle trees

Hardware/Infra Layer
1
Physical nodes, servers, mining hardware
1.2
Types of Blockchain
Module 1 · Section 1.2 — Public · Private · Consortium
Public Blockchain — Theory

Definition Key Characteristics

A public blockchain is an open, permissionless network • Open and permissionless

that anyone can join. Any user can read the ledger,
submit transactions, and take part in validating blocks. It • Fully decentralised
is fully decentralised — no single authority controls it.
• Completely transparent

How it works
• Secured by PoW / PoS
- Anyone can download the software and run a node
• Anyone can be a validator
- Transactions are broadcast to the whole peer-to-peer
network
Examples
- Blocks are validated by open consensus (PoW / PoS)
Bitcoin (BTC), Ethereum (ETH),
- The entire ledger is publicly visible to all Litecoin, Cardano
Public Blockchain — Advantages & Disadvantages

Advantages Disadvantages
• Fully decentralised • Poor scalability
No single authority can control, censor, or shut it down. Low throughput — Bitcoin handles only about 7
transactions per second.

• Highly transparent • High energy use

Anyone can inspect and audit every transaction on the ledger. Proof of Work mining consumes very large amounts of
electricity.

• Very secure • Slow confirmations

Thousands of nodes make tampering practically impossible. Transactions can take minutes to be confirmed as final.

• Trustless & open • No privacy

No permission needed; strangers can transact without trusting All transactions are public, which is unsuitable for
each other. confidential data.

• Censorship-resistant • Large storage need

No party can block a valid transaction or exclude a user. Every full node must store the entire, ever-growing
ledger.
Public Blockchain — Network Structure
Private Blockchain — Theory

Definition Key Characteristics

A private blockchain is a permissioned network • Permissioned (restricted)

controlled by a single organisation. Only authorised
participants may join, read the ledger, or validate • Centralised control
transactions. It is centralised or semi-centralised.
• Fast transaction processing

How it works
• High privacy & confidentiality
- A central administrator grants and revokes access
• Selected validators only
- Only pre-approved nodes can validate transactions

Examples
- Consensus is by trust/voting, not costly mining
Hyperledger Fabric, Corda (R3),
- Data is confidential to the organisation Multichain, Quorum (JPMorgan)
Private Blockchain — Advantages & Disadvantages

Advantages Disadvantages
• Fast & scalable • Centralised
Few known validators mean high throughput and quick A single authority controls it — the core blockchain
confirmation. benefit is reduced.

• High privacy • Less secure

Data stays confidential within the organisation. Fewer nodes make tampering or collusion easier than on
a public chain.

• Energy efficient • Requires trust

No PoW mining, so running costs are far lower. Participants must trust the owner not to alter records.

• Full control • Not transparent

The owner sets the rules and can fix errors quickly. Outsiders cannot audit the ledger.

• Enterprise-friendly • Limited immutability

Easier to meet regulatory and audit requirements. The controlling organisation could, in principle, rewrite
history.
Private Blockchain — Network Structure
Hybrid Blockchain — Theory

Definition Key Characteristics

A hybrid blockchain combines the features of both public • Controlled openness

and private blockchains. Part of the data is kept private
and restricted to authorised members, while a selected • Private + public in one system
part is made public and verifiable by anyone.
• Selective transparency

How it works
• Faster than a fully public chain
- A private, permissioned network stores confidential records
• Owner decides what is public
- Selected data (e.g. a hash or proof) is published to a public
chain
Examples
- A gateway controls what is exposed publicly
XinFin (trade finance), Dragonchain,
- Anyone can verify the public data, but cannot access private IBM Food Trust (hybrid deployments)
data
Hybrid Blockchain — Advantages & Disadvantages

Advantages Disadvantages
• Privacy with transparency • Not fully transparent
Sensitive data stays private while proofs are publicly verifiable. Users must trust the owner about the hidden private
data.

• Better scalability • Partial decentralisation

Fewer validating nodes than a public chain, so it is faster and A central authority still controls the private portion.
cheaper.

• Flexible control • Complex to implement

The owner decides exactly which data is public and which is Managing two layers and the gateway between them is
private. difficult.

• Lower cost & energy • Upgrade difficulties

Avoids the heavy PoW mining cost of fully public chains. Changes need coordination across both public and private
parts.

• Regulatory compliance • Less community trust

Confidential data can be withheld to satisfy data-protection Lacks the openness that gives public chains their
laws. credibility.
Hybrid Blockchain — Network Structure
Consortium Blockchain — Theory

Definition Key Characteristics

A consortium (federated) blockchain is a permissioned • Semi-decentralised

blockchain that is governed jointly by a group of
organisations rather than a single entity. Control and • Governed by a group, not one owner
validation are shared among the pre-selected members.
• Permissioned (members only)

How it works
• Fast, uses BFT / voting consensus
- A group of organisations pre-select the validating nodes
• Shared, joint governance
- Consensus requires agreement among these members

Examples
- No single organisation can alter records alone
R3 Corda (banking), IBM Food Trust,
- Access to read/write is restricted to members Hyperledger-based bank consortiums
Consortium Blockchain — Advantages & Disadvantages

Advantages Disadvantages
• No single point of control • Less decentralised
Shared governance — no one member can manipulate the Power rests with a few members, not the public.
ledger.

• Fast & scalable • Slow decision-making

Few known validators, so higher throughput than public Members must agree on rules and upgrades —
chains. governance overhead.

• Low energy cost • Setup complexity

Uses BFT/voting consensus instead of expensive PoW mining. Requires legal agreements and coordination between
organisations.

• Privacy among members • Risk of collusion

Data is confidential to the consortium, not the whole world. A majority of members could collude against the minority.

• Trust between competitors • Not publicly verifiable

Rival firms can cooperate without any one owning the Outsiders cannot audit the ledger, so less transparency.
platform.
Consortium Blockchain — Network Structure
Blockchain Types — Comparison

Feature Public Private Hybrid Consortium

Permission None (Open) Single Org Selective Group of Orgs

Speed Slow Fast Medium Fast

Privacy Low High Medium Medium

Decentralisation Full None Partial Partial

Energy Use High (PoW) Low Medium Low

Example Bitcoin Hyperledger XinFin R3 Corda

Textbooks & References

Textbook Bashir, I. (2017). Mastering Blockchain. Packt Publishing.

Textbook Swan, M. (2015). Blockchain: Blueprint for a New Economy. O'Reilly.

Reference Nakamoto, S. (2009). Bitcoin: A Peer-to-Peer Electronic Cash System. [Link]

Reference Buterin, V. (2013). A Next-Generation Smart Contract and Decentralised Application Platform.

Reference Antonopoulos, A.M. (2017). Mastering Bitcoin (2nd Ed.). O'Reilly.

Online Hyperledger Foundation — [Link]

Online Ethereum Developer Docs — [Link]/en/developers

 Thank You
Module 1 Complete — Questions Welcome

CSDC 7022 Blockchain | Mrs. Manila Gupta | RCOE