The DataHour Synopsis: Introduction to Blockchain
Overview on Blockchain
Analytics Vidhya has long been at the forefront of imparting data science knowledge to its community. With the intent to make learning data science more engaging to the community, we began with our new initiative- “DataHour”.
DataHour is a series of webinars by top industry experts where they teach and democratize data science knowledge. On 31st May 2022, we were joined by Valerii Babushkin for a DataHour session on “Introduction to Blockchain.”
Valerii Babushkin works at Blockchain.com as a Head of Data Science. Before that he worked on Facebook at the WhatApp User Data Privacy as Staff Engineer, at Alibaba Russia as the VP of Machine Learning, and at X5 Retail Group as a Senior Director of Data Science. Also, Valerii is a Kaggle Competition Grand Master, ranked globally in the top 30.
Are you excited to dive deeper into the world of AI and Blockchain? We got you covered. Let’s get started with the major highlights of this session: Introduction to Blockchain.
Every one of you must be heard of Blockchain. It’s a revolutionary technology having the ability to reduce risk and fraud in a scalable manner. Through this session we’ll be able to learn:
- why blockchain is a computer and
- how this computer is layered.
- what different environments of Blockchain do we have at the moment.
Blockchain as a Technology
Blockchain –> A virtual computer that runs on top of a network of physical computers that provide strong, auditable, game-theoretic guarantees that the code it runs will continue to operate as designed. This type of technology is designed as displayed in the image Architecture of Blockchain.
The Architecture of Blockchain Computers
The Result: Trust Guarantees
- The game theory of nodes plus consensus mechanism provides trust guarantees to anyone using it – users, developers, creators, businesses other computers or services- that no previous computer architecture could provide.
- Because remember were shown to be impossible, this trust guarantee means that the rules of the system can change without due process as defined by the system governance protocols. Don’t be evil becomes can’t be evil.
- This trust guarantees also enable the credible creation of computing primitives such as digital money, digital goods, smart contracts decentralized organizations, etc.
You have a consensus layer which is a card called the heartland or any blockchain. You have a compute layer which you might call a blockchain computer. Then an application list – a lady team of Motoko whatever and you have a user interface which some people can call a web 3.0.
- A number of qualities persistence. Once added data can never be removed.
- Consensus – all honest participants have the same data
- Liveness – honest participants can add new transactions and
- Openness – anyone can be a participant no authentication
Layer 1.5 Compute Layer/Blockchain Computer
- Rules are enforced by a public program public source code. This means that there is transparency – no single trusted third party
- The app program is executed by parties who create new blocks so there is public verifiability – anyone can verify state transitions
Execution Environment (Bitcoin Blockchain and Ethereum Blockchain)
- limited instruction set (no loops)
- sufficient for some tasks – atomic swaps, payment channels
- EVM is a general-purpose computing environment
- App code updates the internal state in response to transactions
- Calling app costs fees (gas) – which prevents denial of service attacks and miners storing on-chain state costs fees because coding up caused fees
Blockchain as a Company
The Difference between a Custodial and Non-custodial Wallet
Applied Machine Learning in Blockchain
Pricing – so pricing is let’s say you can go to blockchain.com. You can deposit USDT that’s a stable coin packed into USD and receive your interest rate of nine percent. Why do that to attract people the same thing that banks are doing with deposits what if I could attract the same people with eight percent? So I’d pay less for them so I would love to do that.
Real-world use case of Blockchain
For example Insurance – is very connected to healthcare so sometimes people do fake examinations or certifications to receive some benefits. So with blockchain, you could avoid that.