BlackChain Technology

BlockChain Technology Overview

The post is written to my fellow afghan's who is interested in blockchain technology and half of these Information I have gathered from internet and saved in my notes.

Blockchain technology is a digital innovation that is poised to significantly alter financial markets within the next few years, within a cryptographic ecosystem that has the potential to also significantly impact trusted computing activities and therefore cybersecurity concerns as a whole.

How many of you :

: Have heard of bitcoins ?
: Own cryptocurrency ?
: Feel you understand the underlying blockchain technology ?
: Feel you can summarize for us the benefits of the “trust economy”?
: Are involved in projects that involve blockchain technology implementation or related activities ?

: Where it All started ?

Blockchain technology was first introduced in a white paper entitled: “Bitcoin: A Peer-to-Peer Electronic Cash System, “ by Satoshi Nakamoto in 2008.

: No reliance on trust
: Digital signatures
: Peer-to-peer network
: Proof-of-work
: Public history of transactions
: Honest, independent nodes control majority of CPU computing power
: Nodes vote with CPU computing power
: Rules and incentives enforced through consensus mechanism

: Cryptocurrency Summarized

: Bitcoin was the first digital, i.e., cryptocurrency
: A maximum of 21 million Bitcoins can be generated
: Just as with real world mining, energy must be invested to solve complex mathematical problems by which systems earn Bitcoins

:Most circulated : Bitcoin, Ethereum, Litecoin

What is BlockChain

The blockchain is often described as digital ledger. And perhaps a very, very simple definition should just leave it at that. It is a ledger, a distributed, digital ledger.

A more wordy definition:

The blockchain is a distributed database that provides an unalterable, (semi-)public record of digital transactions. Each block aggregates a timestamped batch of transactions to be included in the ledger – or rather, in the blockchain. Each block is identified by a cryptographic signature. These blocks are all back-linked; that is, they refer to the signature of the previous block in the chain, and that chain can be traced all the way back to the very first block created. As such, the blockchain contains an un-editable record of all the transactions made.

See below for more details about the technology of the blockchain. See also:
“What is Blockchain?” by W. Ian O’Byrne – that article has helpful graphics.

The History of the Blockchain

The blockchain was first defined in the original source code for Bitcoin. While the recent interest in the blockchain often tries to separate it from that, it’s worth looking at this history – the two, together.
Bitcoin is a virtual currency, invented in October 2008 with the publication of “Bitcoin: A Peer-to-Peer Electronic Cash System,” a paper written by Satoshi Nakamoto (an alias. The real identity of Satoshi Nakamoto, the inventor(s?) of Bitcoin remains unknown, despite several well-publicized – and failed – attempts to “out” him).

The code was released as open source in January 2009. (The next section of this guide examines the technology of Bitcoin and the blockchain in more detail.)
Thus, the Bitcoin network began in 2009 when Satoshi Nakamoto “mined” the first Bitcoins.

Satoshi Nakamoto disappeared from the public – that is, from Bitcoin forums, papers, and code contributions – in April 2011. But even in Satoshi Nakamoto’s absence, Bitcoin continued to be developed and marketized, with the community working to address various issues with the code (including, for example, a technical glitch in 2013 that caused a fork in the blockchain).
Bitcoin really took off in 2013, as more websites started accepting the currency, as investors started funding more Bitcoin-related startups(more on investment in a section below), and as the price surged, hitting a record high of $1108 per Bitcoin in November of that year. But as its popularity grew, Bitcoin also faced scrutiny from law enforcement. The Department of Homeland Security shut down the Bitcoin exchange (formerly a Magic the Gathering exchange) Mt. Gox in 2013, which was at the time handling almost 70% of Bitcoin transactions. Mt. Gox declared bankruptcy the following year, amidst reports that some 744,000 bitcoins had been stolen from the site.
(Some of this history might seem a bit extraneous to a discussion about the blockchain in education, but I’d argue that it’s all important to consider when we think about the security, the infallibility, and most importantly ideology of blockchain – the latter the topic of a subsequent article in this research project.)
One Bitcoin is currently worth about $415.
Other cryptocurrencies have been developed based on the Bitcoin technology – Litecoin and Dogecoin, for example – although their volatility has made some investors and pundits wary. That volatility – in the code and in the community – has in recent months led many well-known Bitcoin developers to call it a failure. In a widely-circulated blog post published in January of this year, Mike Hearn wrote that “In the span of only about eight months, Bitcoin has gone from being a transparent and open community to one that is dominated by rampant censorship and attacks on bitcoiners by other bitcoiners.” In its coverage of the fallout, The New York Times cautions that “The current dispute, though, is a reminder that the Bitcoin software – like all computer code – is an evolving product of the human mind, and its deployment is vulnerable to human frailties and divergent ideals.”
As interest (and arguably and, yes, ironically, trust) in Bitcoin has waned, the reverse seems to be true about the blockchain, the technological underpinning of the cryptocurrency, which in the last year or so has received interest from banks, businesses, and governmental organizations alike.

The Technology of the Blockchain

Let’s expand on the very, very simple definition of blockchain at the beginning of this article: the blockchain is distributed, digital ledger.

One of the key features of the blockchain is that it is a distributed database; that is to say, the database exists in multiple copies across multiple computers. These computers form a peer-to-peer network, meaning that there is no single, centralized database or server, but rather the blockchain database exists across a decentralized network of machines, each acting as a node on that network.

Transactions on the blockchain are signed digitally, using public key cryptography. (And now a brief description of that technology: public key cryptography uses two keys, which makes it harder to crack. There is a public and private key – related mathematically but because of the complexity of that math, nearly impossible (or at least computationally infeasible) to guess. The public key can be used to sign and encrypt a message that’s being sent; the recipient – and only the designated recipient – can decrypt that transaction with their private key. (Here’s my public key, by the way.) In addition to encrypting messages, public key cryptography can be used to authenticate an identity as well as to verify that the message – or in the case of a transaction on the blockchain – has not been altered.)

Because of the distributed nature of the blockchain database, data about all new transactions must be propagated to all nodes on the network so that the blockchain stays in sync as one “world wide ledger,” and not as many conflicting ledgers. That means that in order to update the blockchain, these multiple, distributed copies of it must be reconciled so that they all contain the same version. This happens in the blockchain via a consensus process: the majority of the nodes in the system must concur. (Note: there are other synchronization methodsfor distributed databases.) This consensus process is one of the key innovations of the blockchain: it is “emergent,” rather than happening at a scheduled time or interval as each new transaction and block is verified computationally.

Each block of the blockchain is made up of a list of transactions. Each block also contains a block header. That header, in turn, contains (at least) three sets of metadata: 1) structured data about the transactions in the block; 2) the timestamp and data about the proof-of-work algorithm (this is how new blocks are mined and verified – more on this in a minute); 3) a reference to the parent block – that is, the previous block – via a “hash” (in order words, a cryptographic algorithm). This creates the “chain” part of the blockchain. Each block in the blockchain can be identified by a hash of its header.

New blocks are created by a process called “mining,” which validates new transactions and adds them to the chain. In Bitcoin, a new block is mined every 10 minutes (that rate is different for different cryptocurrencies’ blockchains). The miner (the machine) that mines the new block is rewarded financially – in the case of Bitcoin, the miner receives Bitcoin (currently 25 per block, but that figure will halve later this year), as well as a cut of the transaction fees for all transactions on the block.

To mine new blocks, miners on the network compete to solve a unique, difficult math puzzle. As noted above, the “proof of work” of that solution is included in the block header which allows the block to be verified. Solving this math problem is nontrivial. Since Bitcoin’s creation, the difficulty of this problem has increased exponentially, as has in turn the computational power needed to solve it. Blockchain.info estimates that Bitcoin miners are now trying 450 thousand trillion solutions per second to solve these puzzles. As such, in 2015, O’Reilly Media estimated that it takes about $600 million a year to maintain the mining infrastructure of the Bitcoin system.

One of the benefits of the increasing complexity of the “proof of work” algorithm is that Bitcoin (purportedly at least) becomes ever more secure. But now, it is impossible to mine Bitcoin on a personal home computer; most mining operations are that, operations – vast farms of pooled computing resources. (I wrote “purportedly” in that last sentence because of fears that these mining pools make Bitcoin susceptible to a “51% attack,” whereby an entity that has majority control could alter the blockchain.)

While cryptocurrency might be virtual, all this mining and computational puzzle-solving obviously takes an enormous amount of energy. According to one Motherboard estimate, “each Bitcoin transaction uses roughly enough electricity to power 1.57 American households for a day.” Bitcoin currently handles about 360,000 transactions per day. You do the math.

Who’s Investing in the Blockchain?

For the last few years, blockchain and Bitcoin have been hailed as “the next big thing,” and there have been plenty of predictions about a coming boom in funding for the sector. The Bitcoin news site CoinDesk has compiled a database of investments in Bitcoin- and blockchain-related startups, and from that (in mid 2015) it created a list of the ten most influential venture capital firms in the industry.

Although many of those on CoinDesk’s list are VC firms that are interested primarily in the financial sector and in financial technologies, there are some familiar names among them, including some of the most high profile Silicon Valley investors. Those who also have substantial investments in education technology include Union Square Ventures, Khosla Ventures, Lightspeed Venture Partners, and Andreessen Horowitz.

The latter has invested $227 million in Coinbase and 21 Inc, which according to CoinDesk, “more than $1 in $4 so far invested in the industry.” It’s hardly a surprise then that Marc Andreessen has become one of the most vocal proponents of Bitcoin, calling it in a New York Times op-ed in 2014, one of the most important technologies since the advent of the Internet.

(Of course, Andreessen also once called the now-defunct Kno “the most powerful tablet anyone has ever made.” So grain of salt and such.)
Although many of the proponents of the blockchain contend that it can be separated from Bitcoin – that is, it can be utilized for something other than an alternative currency – Andreessen has argued that the two are inextricable: “a distributed ledger naturally both creates and requires a corresponding currency.”
And while much of the most recent excitement about the blockchain’s potential relevance to education does not involve Bitcoin, there has been (at least) one example of an education-oriented cryptocurrency: EduCoin. Initially inspired by a college student at a football game holding a “Hi Mom. Send Bitcoin” sign, EduCoin sought to become a new way to finance one’s education. In 2014, EduCoin described itself this way: “We need a digital currency that can help students, educators, and third parties make secure transactions without fees, rates, or long approval times. EduCoin aims to be the worldwide standard for student transactions in the learning economy.” (Several years later, this project appears to no longer be maintained or active.)
As noted above, as the popularity of Bitcoin and related cryptocurrencies has waned (arguably at least), interest in the blockchain has remained if not grown. Blockchain-related startups now focus on things like identity management and “smart contracts.” The next section will look at some of the possible applications of the blockchain in educationin more detail, but clearly these two elements – identity and contracts, particularly in the form of transcripts and assessments – have particular relevance in education. To see the breadth (or lack thereof) in the types of startups offering blockchain-related products and services, you can view a sample of 200+ of them via the funding website AngelList. Elsewhere, fintech investor Collin Thompson has posted his list of “The Top 10 Blockchain Startups to Watch in 2016” on LinkedIn.
One of the names that comes up with increasingly frequency here is Ethereum, developed by a Swiss non-profit the Ethereum Foundation. (Its founder, Vitalik Buterin, dropped out of Waterloo University and received a $100,000 Thiel Fellowship for his work on the project.) Ethereum isn’t a startup per se, although it’s clearly what tech industry folks would call a “platform move”: it’s building a blockchain – an alternate blockchain, to be clear, that isn’t connected to Bitcoin – for others to build their own startups upon in turn.
Ethereum describes itself as moving beyond a “world ledger” – it’s a “world computer,” a “perfect machine.”
Ethereum was first proposed by Buterin in 2013, and the second version of the Ethereum platform, called Homestead, was released earlier this year. (Here is a more complete history of Ethereum via the Ethereum Foundation’s blog.) The organization now boasts the fifth largest crowdfunding campaign ever, having raised over $18 millionfor the project in 2014 by the sale of “ether,” Ethereum’s currency.
Ethereum seems to be the platform upon which many big companies, such as IBM and Microsoft, are starting to experiment with the blockchain.
And it’s probably worth noting that, to date, it’s been a big company rather than a little startup that’s made the first overtures towards blockchain-in-education. The company in question: Sony, which announced in February that it plans to develop a blockchain-based platform for assessment. Sony’s press release doesn’t give much indication of what this will look like – if it plans to use Ethereum, for example, or build its own blockchain.
To clarify the heading of this section: when we consider who is “investing” in the blockchain in education we should look at venture capital funding, technological contributions, product adoption, and, of course, marketing.

Education and the Blockchain

And to be clear, most of what we’re hearing right now about the blockchain and education is precisely that: marketing. There are only a very, very few organizations currently utilizing the blockchain for educational purposes, although many claim they’re actively exploring the possibility.
The blockchain had a big marketing splash at SXSWedu this spring, for example, thanks to two think tanks, the Institute for the Future (IFTF) and the ACT Foundation. They presented the idea of “the Ledger” as a new technology that could tie learning to earning. Onsite in Austin, the promotion of the “Learning is Earning” initiative was framed as a “think like a futurist” game and intertwined with a keynote delivered by well-known game designer and writer Jane McGonigal, who is a research affiliate at the Palo Alto-based IFTF.
An excerpt from the “Learning is Earning” promotional video:
Welcome to the year 2026, where learning is earning. Your ledger account tracks everything you’ve ever learned in units called Edublocks. Each Edublock represents one hour of learning in a particular subject. But you can also earn them from individuals or informal groups, like a community center or an app. Anyone can grant Edublocks to anyone else. You can earn Edublocks from a formal institution, like a school or your workplace. The Ledger makes it possible for you to get credit for learning that happens anywhere, even when you’re just doing the things you love. Your profile displays all the Edublocks you’ve earned. Employers can use this information to offer you a job or a gig that matches your skills. We’ll keep track of all of the income your skills generate, and use that data to provide feedback on your courses. When choosing a subject to study in the future, you may wish to choose the subject whose students are earning the most income. You can also use the Ledger to find investors in your education. Since the ledger is already tracking income earned from each Edublock, you can offer investors a percentage of your future income in exchange for free learning hours. Our smart contracts make these agreements easy to manage and administer. The Ledger is built on blockchain, the same technology that powers bitcoin and other digital currencies. That means every Edublock that has ever been earned is a permanent part of the growing public record of our collective learning and working.
There’s a lot to unpack ideologically in this vision of the future of education and work (and as I noted above, I’m going to look more closely at the ideology of the blockchain in a follow-up article to this guide). But the video hits on many of the key themes that are echoed across various other education-related blockchain discussions – that is to say, the blockchain could be utilized to better manage assessments, credentials, and transcripts. (See, for example OTLW or BadgeChain.)
These claims dovetail quite neatly with those made more broadly about the future of the blockchain – that it will be utilized for identity management and for “smart contracts.” They also dovetail quite neatly with areas in education that are already backed by funding and by policy (by money and politics). (From my list of last year’s “Top Ed-Tech Trends,” for example: “Standardized Testing” and “Credits and Credentialing” and, to borrow a phrase from George Siemens, “The Employability Narrative.”)
For their own part, a handful of schools have also started to experiment with the blockchain, primarily in creating cryptographically-signed, verifiable certificates. These include MIT (the Media Lab, specifically), the University of Nicosia in Cyprus, and the (unaccredited) Holberton School, an alternative, teacher-less software engineering school in San Francisco.
(It’s probably worth noting here too that at the height of the Bitcoin frenzy, several universities, including the University of Nicosia, The King’s College in New York, and Simon Fraser University in British Columbia, also announced that they would accept the cryptocurrency for tuition payments.)

Things to Consider…

Let’s be honest: blockchain-related projects in education are still very much in their experimental stages. Nevertheless, the blockchain itself is incredibly overhyped, with fairly wild claims about “revolution” and a radical decentralization of key institutions – in the case of education, of universities as well as their accrediting bodies, for example. If you believe the spin, all functions – economic, civic, scientific – will soon be blockchained.

Late last year, Gideon Greenspan, the CEO of a blockchain platform Coin Sciences, offered a list of eight conditions that should be met in order to avoid “pointless blockchain projects.” These include needing a database, having multiple people writing to that database, having some interactions between transactions, operating with an absence of trust, and not needing a trusted intermediary. Riffing on that article, BadgeChain team member Doug Belshaw recently wrote a follow-up about “Avoiding pointless (Open Badges-related) blockchain projects,” in which he used Greenspan’s list to argue that, indeed, Open Badges meets all the Coin Sciences’ requirements to move forward with the blockchain.

And maybe it does.
Or maybe we are layering one technology (and its correspondent ideology) onto another technology (and its correspondent ideology) and expecting (or hoping) institutions be disrupted. There are many underlying assumptions that are made about institutions and their practices when we talk about using the blockchain, and I think scrutinizing these assumptions, not simply checking off a list written by a blockchain company, is fundamental as we consider the applicability of the blockchain to education.
With that in mind, here are a handful of the concerns I have about the blockchain in education – some of these are technical, but most of them are not:

Is learning transactional?

: The blockchain is a ledger, and we most often think of ledgers as containing financial transactions. As the blockchain moves beyond financial technology to other sectors, it’s still used to record transactions of some sort. What are those transactions in education? Completing an assignment or a course? Publishing a blog post or a book? Chatting, favoriting, retweeting, liking? What is gained and what is lost as we increasingly record (and assess) these transactions or activities? (See Amy Collier on “Not-yetness and learnification.”)

Who is trusted and mistrusted in education?:

“The spread of blockchains is bad for anyone in the ‘trust business’ – the centralised institutions and bureaucracies, such as banks, clearing houses and government authorities that are deemed sufficiently trustworthy to handle transactions,” The Economist argued back in 2015. A “decentralized trust” would, proponents argue, then serve as a challenge to the centralized authority that, say, accrediting and accredited bodies have in issuing degrees. But this strikes me as a very shallow analysis of how trust and prestige operates in educational signals like degrees.
Furthermore, discussions about “trust” and the blockchain in education often frame students (and/as potential employees) as being untrustworthy – as lying about their degrees or their skills. (And a lot of ed-tech certainly views students as cheaters.) The blockchain would purportedly verify those credentials. But it’s worth asking too if institutions are trustworthy. Which students, which institutions are and are not trusted? Why? By whom? What is actually the source of “trust” in our current credentialing system? (Spoiler alert: it's not necessarily accreditation.) How would the trustworthiness of blockchained credential-issuing institutions be measured or verified? If it’s by the number of transactions (eg. badges issued), doesn’t that encourage diploma milling?
The blockchain is based on a computational sort of trust, we’re told – but why trust “code” and not, say, democracy?

Is education (teachers, students, schools) prepared to handle the complexity of the blockchain?: It’s 2016 and “123456” remains the most popular password. Is education ready for public key cryptography? Can it afford the necessary computational power to run blockchain nodes? Can it handle the complexity of working with blockchain technology? Can individuals? Does any of this improve upon existing practices? If so, how? I’d note here that this is one of the rhetorical sleights-of-hand of the word “decentralization” in technology circles: knowledge and wealth continues to be concentrated in the hands of the technological elite.

What is the incentive to mine in an education-related blockchain project?

: As I explained in the technology section of this guide, mining is the process in which new blocks in the blockchain are created and validated. Cryptocurrencies like Bitcoin award coin to those who solve the necessary cryptographic puzzle to create a new block. This is the incentive for throwing the massive amount of computational power at the problem. Will education-related projects follow this model? Will they utilize third-party platforms, like Ethereum, to build their projects? What does it mean to build financial incentives into these new educational models? And what are the implications of relying on third party platforms for what some are arguing is going to be “the future” of identity management and legal paperwork?

What happens to privacy in a “world ledger” of education transactions? Do we really want education records to be unalterable?:

When Sony announced its plans for a blockchain-based assessment platform, Sony Global Education President Masaaki Isozu told Education Week that “We want to keep life-long learning records … securely in the cloud forever. While these records are usually held privately, we want to make it possible for students and educators to securely share verified, trustworthy information with others. Trading these records securely would be an all-new service in the education sector.” “This will go down on your permanent record.” We recognize the threat, I’d wager, but we quickly recognize that there are many ways in which it’s an empty one. But the blockchain would create a permanent record where data cannot be changed or removed. This raises all sorts of problems for education, particularly if we view learning as a process of growth and change.
The question of who owns education data remains unresolved – indeed, the US Department of Education says that schools do, although they need to act as good stewards on behalf of students. So would students have control of the privacy of their data on the blockchain? Or would this be something that schools would negotiate access to with their vendors? What happens if the data on the blockchain is wrong? What happens if the data is prejudicial, re-inscribing the prejudices that data collection and school practices already enact?
What happens if a student wants or needs a “fresh start”? (What happens, for example, if they transition or seek gender confirmation surgery? What happens if they have a stalker or need to obscure their identity because of an abuser?) How might we design education technologies (including those that would use the blockchain) so that they protect privacy by design?
How might a demand for transparency about data be a question or power and privilege?

What problems can blockchain solve in education? What problems – technologically, ideologically – might the blockchain's adoption in education create?

Even if we understand how blockchain "works," there remain a lot of unanswered questions...