9 - Using Hash Functions for blockchain

Question 1

Permissionless Blockchain

Answer 1

Anybody can join, identity and number of users not required

Question 2

Permissioned Blockchains

Answer 2

Users are checked/authorised

Question 3

General principles of blockchain

Answer 3

• Decentralised database (all participants keep ledger copy of all data)
• Data organised in blocks
• Blocks form chain
• New data is collected in new block and added to end
• Blocks NEVER deleted

Question 4

Each block has a hash of what?

Answer 4

The previous block

Creates agreement between blocks and tampering etc

Question 5

If someone changes data in a block, what happens?

Answer 5

They need to change the hashes all the way forward in the blocks. (all blocks after).

Everyone else must also agree though either by collusion of more than 50% agreeing or proof of work

Question 6

Typically, data put in blockchain is authenticated by…

Answer 6

digital signatures

Question 7

Proof Of Work

Answer 7

Ensures a valid message can only be created by spending a certain amount of resources

Question 8

Using a hash function H for proof of work

Answer 8

• message m, append a nonce r (random string of bits, small fixed length)
• Compute H(m||r)
• Check if resulting hash conforms to a pattern (eg 20 zeroes start). If not, repeat with another r.

Requires trying many nonces r.
Publish m||r with success

Question 9

Bitcoin miner

Answer 9

• Takes list of transactions
• checks they are valid (sig genuine and bitcoin not spent)
• Builds new block

They compute a “proof-of work” for that block and write the successful nonce as a block field.

• Successful nonce is broadcast by whoever finds it first.

Question 10

Bitcoin miner: what do other participants do when successful block found?

Answer 10

• Check it’s valid by checking the transactions and proof-of-work.
• Add block to their copy of blockchain

Question 11

Using proof of work for anti spam

Answer 11

• sender must produce nonce r that H(m||| address || r) satisfies the condition (pattern etc)
• Required for each individual email address sent to, so cost is proportional to recipients