Blockchain Basics

A non-technical introduction in 25 steps

About the Book

This book bridges the gap between purely technical and purely business-focused explanations of the blockchain.

In 25 concise steps, this book teaches the basics of blockchain technology in a non-technical fashion. Besides the technical nature of the blockchain this book does not require any previous knowledge in computer science, mathematics, programming or cryptography. Due to its didactic concept, this book provides a self-contained learning path through all the components of the blockchain and their underlying technical concepts and principles.

Why this Book?

If you want to learn how the blockchain works, you may find yourself lost in a universe of books that either quickly skim through the technical concepts or that discuss the underlying technical principles at a highly formal level. The former may leave you unsatisfied because these books miss to explain the technical details necessary to understand and to appreciate the blockchain while the latter may leave you unsatisfied because those books already require the knowledge you want to acquire. "Blockchain Basics" is different because it not only fills the gap between purely technical books and purely business-focused books but also teaches all concepts and principles of the blockchain in a non-technical fashion. It does so by using a didactic concept that is based on pictorial explanations, analogies, and metaphors.

Features of the book
Covered Technologies and Concepts
  • Hash Values

  • Cryptographic Hash Functions

  • Hash Puzzles

  • Asymmetric Cryptography

  • Public-Private-Key Cryptography

  • Digital Signatures

  • Security

  • Identification

  • Authentification

  • Authorization

  • Merkle Trees

  • Blockchain Data Structure

  • Immutability

  • Proof of Work

  • Ownership

  • Transfer of Ownership

  • Transaction Data

  • Secure Transactions

  • Double Spending

  • Software Architecture

  • Distributed Systems

  • Peer-to-Peer Systems

  • Network Communication

  • Integrity

  • Distributed Consensus

  • 51% Attack

  • Blockchain Algorithm

  • Blockchain Technology Suite

Scope of the book
Didactic Concept
"Blockchain Basics" consists of 25 steps that form a learning path which incrementally builds up your knowledge of the blockchain. The individual learning steps are grouped into five major learning stages that address the major questions to be asked when being introduced to a new technology: What is it? Why do we need it? How does it work? What can we do with it? How may it evolve in the future?

Stage 1: Terminology and technical foundations

The first learning stage explains major concepts of software engineering and sets the terminology necessary for understanding all successive steps. By the end of this stage you will have gained an overview of fundamental technical concepts and an appreciation of the big picture in which the blockchain is located.

Stage 2: Why the blockchain is needed

The second stage explains why the blockchain is needed, what problem it solves, why solving the problem is important, and what potential it has. By the end of this stage you will have gained a good understanding of the problem domain in which the blockchain is located, the environment in which it provides the most value, and why people are so excited about it.

Stage 3: How the blockchain works

The third learning stage is the centerpiece of this book since it explains how the blockchain works internally. This stage guides you through the major components of the blockchain and their underlying technical concepts. By the end of this stage you will have reached a solid understanding of all the major components and concepts of the blockchain, how they work in isolation, and how they interact in order to create the big machinery that is called Blockchain.

Stage 4: Limitations and how to overcome them

The fourth learning stage focuses on major limitations of the blockchain, the reasons, and possible ways to overcome them. By the end of this stage you will understand why the original idea of the blockchain as explained in the previous stages may not be suitable for large scale commercial applications, what changes are needed to overcome these limitations, and how these changes work.

Stage 5: Using the blockchain, further developments, and outlook

This stage concludes our intellectual journey of the blockchain. It considers how the blockchain can be used in real life, what generic use cases exist, and how to analyze existing blockchain applications. This stage also points out areas of active research and further development. By the end of this stage you will have gained a well-grounded understanding of major application scenarios of the blockchain, its most important advances, its possible long-term accomplishments and its major disadvantages.

Table of Contents

Stage 1: Terminology and Technical Foundations

  • Step 1: Thinking in layers and aspects
  • Step 2: Seeing the big picture
  • Step 3: Recognizing the potential

Stage 2: Why the Blockchain Is Needed

  • Step 4: Discovering the core problem
  • Step 5: Disambiguating the term
  • Step 6: Understanding the nature of ownership
  • Step 7: Spending money twice

Stage 3: How the Blockchain Works

  • Step 8: Planning the blockchain
  • Step 9: Documenting ownership
  • Step 10: Hashing data
  • Step 11: Hashing data in the real world
  • Step 12: Identifying and protecting user accounts
  • Step 13: Authorizing transactions
  • Step 14: Storing transaction data
  • Step 15: Using the data store
  • Step 16: Protecting the data store
  • Step 17: Distributing the data store among peers
  • Step 18: Verifying and adding transactions
  • Step 19: Choosing a transaction history
  • Step 20: Paying for integrity
  • Step 21: Bringing the pieces together

Stage 4: Limitations and How to Overcome Them

  • Step 22: Seeing the limitations
  • Step 23: Reinventing the blockchain

Stage 5: Using the Blockchain, Summary, and Outlook

  • Step 24: Using the blockchain
  • Step 25: Summarizing and going further
A detailed preview of the book's content can be found on Google Books.
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