Hey, everyone. Thanks for attending this course. Before we go deep into the world of blockchain, let's first get started by defining what blockchain is. There is a lot of confusion in the world, related to blockchain and cryptocurrencies. And through this course, we aim to provide clarity for the same. On my recent visit to one of the colleges, my first question was, do you know about blockchain?

And out of 250 students in audience only four raise their hands. But when I asked, Do you know about Bitcoin, almost 95% of the attendees raised their hands. blockchain is termed as Bitcoin or cryptocurrencies by layman users. And in a way blockchain is also getting a bad name because of the same but in reality, blockchain is the tech and the cryptocurrencies are the earth The mainstream manifestation of its potential. Before we define blockchain, let's take a small example of how blockchain is solving some real world difficulties. Let us assume two individuals, Alice and Bob, who want to transfer money in the traditional way of physical transfer of money would take place between Alice and Bob, where they would have to meet in person at a common place to do so.

Human settlements over long distances have increased with time, and have therefore made it difficult for people to meet in person and transfer the funds. Now with the advancement of technology, instead of meeting in person, we started providing digital money to each other by using Internet services to transfer the money. In our example, Alice sends the digital cash to Bob, but there is a problem with digital money as well. is not receiving the physical money. Bob cannot be sure whether Alice is sending the digital money only to him. It could be a case that Alice is sending the digital copies of the money to different people.

At the same time. Alice could be sending the digital money to Dave, apart from sending the same money to Bob, to make sure that this kind of scenario is not happening within the transaction. For Alice and Bob, they decided that they will appoint one single person who will note down all the transactions in the book. This will make sure that their network is secure and people who are transferring money are not able to cheat. Dave is going to note down all the transactions Henceforth, moving on with our example, when Bob sends the digital cash to Carol, then Dave notes down the transaction in the records book. Similarly, when Carol sends the digital money to Eugene Again, they've not found the transaction in the record book.

This is the same process however banks are working. But soon the network started to become big. And the digital money is being transacted between hundreds and thousands of people, with Dave noting down all the transactions. Now, another problem came in front that there could be a possibility that Dave has also become money hoarder, and tries to change some of the transaction or manifest fake transactions for his benefit. To avoid such behavior by a single entity, who is in charge of the records. The whole group who is using the digital cash, decided that every single person inside the digital cash network will hold the copy of the ledger for recording the transactions.

Now when Allison's traditional cash to Bob, then every person inside the system is noting down the transaction similarly, Really, when Bob is sending the digital money to Carol, again, everybody is indicating the transaction in their copy of the book. If Dave decides to alter the transactions for his gain, then everyone in the network can verify that the alter transaction has not taken place, and somebody is trying to cheat the system. How this solves the traditional problems, noting down the transactions in the ledger, make sure that double spending is not allowed. If Alice tries to send two copies of digested money to different people, it can be verified through ledger, that this is not allowed. Moreover, it removes the trust we put into centralized system. Initially in our network, we were trusting Dave to make sure that everything is working fine in the system.

But now providing the ledger to everyone within the network. We are making sure that the trust is developed through constant is where everyone who is connected to the network is making sure the system is working truthfully. For example, if Dave decides to change the network by changing the transaction in his copy of records from Dave to Carol, to a fraudulent transaction like Alice to Carol, on Dave's part, this is to make sure that his account is never getting deducted for the digital cash. But everybody inside the network can verify that this transaction has not happened. And Dave is trying to cheat the network. Finally, they can remove the culprit from the system.

This is how Bitcoin blockchain is solving the traditional problems related to transfer of Finance. Taking from over example, if we want to define blockchain in simple terms, then we would say it is a distributed database technology available over peer to peer network or in other words, we can say it's certainly distributed ledger of all records or transactions. blockchain was initially device to power Bitcoin, but it has much more significant use, then realizing the cryptocurrencies, we will see in the next sessions how you can utilize blockchain in different aspects of industries. Every blockchain which is available in the market is primarily built into three technical functionalities. The first one is private key cryptography, which involves algorithms like ECC and RSA. For example, Bitcoin and aetherium are working on ECC algorithm, which is part of ecdsa umbrella.

ECC algorithm states occur where mirror points are chosen as a key pair. The next technical functionality required for the blockchain is a peer to peer network. A peer to peer system is devised in such a way that the network by Participants do not need to trust a central server. They are connected and creates trust through consensus. In the example we discussed at the start of this session, we created a peer to peer network by distributing the copy of ledger to everyone in the system. And the third most important technical aspect for blockchain is the blockchain protocol.

Protocols are used to define how your chain will operate. For example, the Bitcoin defines that a new block will be added after every 10 minutes, a reward will be distributed for confirmation of blocks, and the block size could only go up to one MB. Other blockchains have some different protocols. Some block chains might also include protocols for assets and data. Now let's go in relate blockchain with some real world examples and see how it goes Jane can be explained with some different analogies.