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Mining in BlockChain

Blockchain mining involves validating transactions and adding them to blocks in a decentralized manner. Miners select transactions, solve complex puzzles to form blocks, and add them to the blockchain if the solution is validated by others on the network. Consensus algorithms like proof-of-work and proof-of-stake allow nodes to securely agree on the transaction history in a distributed ledger.

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Pranav Bansal
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171 views

Mining in BlockChain

Blockchain mining involves validating transactions and adding them to blocks in a decentralized manner. Miners select transactions, solve complex puzzles to form blocks, and add them to the blockchain if the solution is validated by others on the network. Consensus algorithms like proof-of-work and proof-of-stake allow nodes to securely agree on the transaction history in a distributed ledger.

Uploaded by

Pranav Bansal
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Mining in Blockchain

What is Mining?

 Blockchain mining refers to the activity performed by miners on


the network to get the new blocks added to the blockchain.

 Mining is the mechanism that allows the blockchain to be created


securely and in a decentralized manner.
Token dispatch-When a user tries to perform a transaction of some
value through the network, he/she dispatches crypto or tokens to
another user.

Blockchain Broadcasting of transaction- transaction is added to the pool of

Mining unconfirmed transactions where it waits for its turn to be picked up


by a miner.

Process Selection of a transaction for a block- Now, a miner picks up the


transaction from the pool of unconfirmed transactions to create a
block. Miners validate new transactions and record them on the
blockchain.

Formation of block-Miners elect the transactions and club them


together to form a new block.

Now, the block needs a signature to be added to a blockchain. This


signature is known as Proof Of Work.
 Addition of block in to the blockchain-
The miner, who is the first to get the
qualified output or signature for the next
block to be added in the blockchain, will
introduce this block and its signature to
other miners.
 Verification of signatures legitimacy- the
other miners will examine the validity of the
signature launched by the miner by hashing
the string of data of the broadcasted block
and matching the hash out with the
signature. If it matches the miners gives
their confirmation on its validity.
CONSENSUS
 Blockchain technology allows all the network participants to reach an
agreement, commonly known as consensus.

 A procedure to reach in a common agreement in a distributed or decentralized


multi-agent platform

 Important for a message passing system


Objectives

The Blockchain consensus protocol consists of some specific objectives:

 Coming to an agreement

 Collaboration and co-operation

 Equal rights to every node

 Mandatory participation of each node in the consensus process.

 Thus, a consensus algorithm aims at finding a common agreement that is a win


for the entire network.
Byzantine Fault Tolerance
 Byzantine Fault Tolerance(BFT) is the feature of a distributed network to
reach consensus(agreement on the same value) even when some of the nodes
in the network fail to respond or respond with incorrect information.

 The objective of a BFT mechanism is to safeguard against the system failures


by employing collective decision making (both – correct and faulty nodes)
which aims to reduce to influence of the faulty nodes.
Byzantine Generals Problem
Proof of Work (PoW)

 The central idea behind this algorithm is to solve a complex mathematical


puzzle and easily give out a solution.

 This mathematical puzzle requires a lot of computational power and thus, the
node who solves the puzzle as soon as possible gets to mine the next block.
Proof of Stake (PoS):

 In this, nodes are known as validators. They validate the transactions to earn
transaction fees.

 Validators will validate blocks by placing a bet on it if they discover a block


which they think can be added to the chain.

 Based on the actual blocks added in the Blockchain, all the validators get a
reward proportionate to their bets and their stake increase accordingly.
P2P Network

 The blockchain is a peer to peer


(P2P) network working on the IP
protocol.
 A P2P network is a flat topology
with no centralized node.
 All nodes equally provide and can
consume services while
collaborating via a consensus
algorithm
 P2P networks are generally more
secure because they do not have a
single point of attack or failure as
in case of a centralized network.
Distributed Ledger
Technology
 Distributed ledgers use
independent computers to
record, share and synchronize
transactions in the network.
 Transactions details are recorded
in multiple places at the same
time.
 Blockchain is one type of a
distributed ledger.
Types of Blockchains

 Public Blockchain (Bitcoin and Ethereum)

 Private Blockchain (Hyperledger and Corda)

 Federated/Consortium Blockchain (Quorum and Dragonchain)


Blockchain Platforms

1. Ethereum

2. Hyperledger

3. IBM Blockchain

4. Multichain

5. Hydrachain

6. Ripple

7. R3 Corda

8. BigChainDB

9. Open-chain

10. IOTA
Ethereum

Ethereum is one of the highly active and open source


Blockchain which also forms the base for development of
other applications.

Key features of Ethereum :

 Open for public use

 Proof-of-work based system


Hyperledger

 This is one of the most recently developed Blockchain platform.


 Linux Foundation made it.
 Its objective is to boost the use of Blockchain technologies
across different industries.

 Hyperledger in finance, banking, IoT, supply chain,


manufacturing and technology.
Blockchain Technology & Use Cases
Some examples of the use of blockchain technology to solve real-life issues:

 Financial sector
 Digital identity
 Education sector
 Logistics sector
 Health sector
 Insurance sector
 Retail sector
 Energy sector
 Blockchain in Agriculture
 Land registrations
Blockchain-related initiatives (India)
 Andhra Pradesh
• Blockchain Database
• Cybersecurity
• Healthcare
• Land Registry
• Vehicle Registration
 Assam
• Public Service Delivery
 Delhi
• Monitoring Growth and Maintenance of Saplings and Plants
 Goa
• Land Registry
 Gujarat
• Fertilizer Subsidy Management
• e-Governance
Cont..

 Karnataka
• Agriculture
• Digital Certificates
• Forest and Land Acquisition
• Public Service Delivery
• Idea Marketplace
• IP Protection
 Kerala
• Farm Insurance
• Agriculture Insurance
 Maharashtra
• Land Registry
• Digital Certifications
• Organ Transplants
• Rationing Distribution
• Farm Insurance
Contd..

Rajasthan

• Electronic Health records (EHR)


• Land Registry
Tamil Nadu

• Agriculture
• Healthcare
• Education
Telangana

• Land Registry
• Chit Funds Operations
• Digital Education Certificates
Uttar Pradesh

• Land Registry
• Power Sharing
West Bengal

• Land Registration
• Duty Payments
• Record Management
• Cybersecurity
• Digital Birth Certificates
• Data Management
Career Opportunities in Blockchain
 Blockchain Developer
 Blockchain Software Engineer
 Blockchain Principal Program Manager
 Business Analytics Associate
 Cloud engineer with bitcoin protocol/blockchain
 Cryptocurrency analyst
 Cryptocurrency developer
 Cryptocurrency mining engineer
 Financial analyst
 Research analyst: blockchain

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