Saint marry university

Accounting department Section G

Course:-emerging technology

Title:- About block chain

Group members ID number

1. Sara mulugeta---------------------------------------------------------------RAD/2316/2016

2. meheret meseret -----------------------------------------------------------RAD/2254/2016

3. Gelila Solomon ------------------------------------------------------------RAD/2156/2016

4. Meseret assefa--------------------------------------------------------------RAD/2179/2016

5. Berhane Nano--------------------------------------------------------------RAD/2306/2016

6. Yohanes Gelete------------------------------------------------------------ RAD/2257/2016

7. Wendmagegn fidele ------------------------------------------------------RAD/2242/2016

8. Feysel ----------------------------------------------------------------RAD/2153/2016

9.Mikias esunew--------------------------------------------------------------RAD/2240/2016

10.kidane marega-------------------------------------------------------------RAD/2177/2016

Submitted to:- Frehiwot T

Submission date:-11/07/2016
 Table of content

7.3 what is block chain technology-----------------------------------------------------------------1

7.31 History of block chain technology------------------------------------------------------------1-8

7.3.2 Block chain explained--------------------------------------------------------------------------8

7.3.3 The three pillars of Block chain technology-------------------------------------------------8-10

7.3.4 How block chain works------------------------------------------------------------------------10-11

7.3.4.1 Advantage and disadvantage in working and using block chain------------------------11-12

7.3.5 Why do people use the peer to peer network------------------------------------------------12-13

7.3.6 Application of block chain---------------------------------------------------------------------14-15

 7.3 What is block chain technology ?

Block chain technology is a decentralized, distributed ledger that stores the record of ownership
of digital assets. Any data stored on block chain is unable to be modified, making the technology
a legitimate disruptor for industries like payments, cyber security and healthcare.

Block chain technology:-is advanced database mechanism that allows transparent information
sharing within a business network a block chain database stores data in blocks that are linked
together in a chain. the data is chronologically consistent because you cannot delete or modify
the chain without consensus from the network . As a result, you can use block chain technology
to create an unalterable or immutable ledger for tracking orders, payment, accounts, and other
transactions. The system has built in mechanisms that prevent unauthorized transaction entries
and create consistency in the shared view of these transactions.

Block chain, sometimes referred to as distributed ledger technology (DLT), makes the history of
any digital asset unalterable and transparent through the use of a decentralized network and
cryptographic hashing.

A simple analogy for how block chain technology operates can be compared to how a Google
Docs document works. When you create a Google Doc and share it with a group of people, the
document is simply distributed instead of copied or transferred. This creates a decentralized
distribution chain that gives everyone access to the base document at the same time. No one is
locked out awaiting changes from another party, while all modifications to the document are
being recorded in real-time, making changes completely transparent. A significant gap to note
however is that unlike Google Docs, original content and data on the block chain cannot be
modified once written, adding to its level of security.

Block chain technology it self is non-controversial and worked flawlessly over the years and is
being successfully applied to both financial and non financial world application.

Block chain technology is a soft ware; a protocol for the secure transfer of a unique instances of
value (eg. Money, property,contracts, and identity credentials) via the internet without requiring
a third-party intermediary such as a bank or government.

Block chain is the technology of bitcoin which is decentralized in nature it is specifically

designed to distribute and transmit currency for the operators of the bitcoin.
Block chain technology is well known due to its feature of security and data integrity.

7.3.1 History

Block chain as an entity has a relatively short history, its influence today is widespread and its
applications wide ranging and growing.

1979

One of the early pre-block chain technologies is the Merkletree, named after computer scientist
and mathematician Ralph Merkle. He described an approach to public key distribution and
digital signatures called tree authentication in his PHD thesis for Stanford university. Merkle
eventually patented this idea as a method for providing digital signatures. The Merkle tree
provides a data structure for verifying individual records.

1982

In his PHD dissertation for the university of California, Berkeley, Davide chaum described a
vault system for establishing, maintaining and trusting computer system among mutually
suspicious groups. The system embodied many of the elements that comprise a block chain
chaum is also credited with inventing digital cash and in 1989, he founded the company digicash.

1991

Stuart Haber and .scott stornetta published an article describing how to timestamp digital
documents to prevent users from backdating or forward-dating electronic documents. The goal
was to maintain the documents complete privacy without requiring record- keeping by a time
stamping service. Haber and storntta updated the design to incorporate Merkletrees, which
enabled multiple document certificates to live on a single block.

1993

The beginnings of the poW(proof of work) concept were published in a paper by Cynthia dwork
and Moni naor to provide “computational technique for combating junk mail,in particular, and
controlling access to a shared resource, in general.”

1997

Adam Black introduced hash cash, a poW algorism that provided denial-of-service
countermeasures.

1999

Markus Jakobsson and Ari Juels published the term proof of work.Also the p2P(peer to peer
netwok) was popularized by the now defunct peer-to-peer file sharing application Napstyer was
not a true P2P network because it use a centralized server .but the service still helper breathe life
into the P2P network ,making it possible to build a distributed system that could benefit from the
compute power and storage capacity of the thousands of computes.

2000

Stefan Konst introduced the concept of cryptographically secured chains in his paper “secure
log files Based on cryptographically concatenated aentries.” His model , which showed thst
entries in the chain can be traced back from the Genesis block to prove authenticity, was the
basis for todays block chain models.

2004

Hal finney introduced reusable PoW, a mechanism for receiving a non exchangeable or non
fungible hash cash token in return for an RSA signed token . The PoW approach today plays a
vital role in bitcoin mining crypto cutrrencies like bitcoin and litecoin use PoW, and Ethereum
shifted to the proof of stake protocol to secure a network using a fraction of the enegy that PoW
uses.

2008

Satoshi Nakamoto, thought to be a pseudonym used by an individual or group of individuals

published a white paper introducing the concept of cryptocurrency and block chain and helped
develop the first bitcoin software .Block chain infrastructure, according to the white paper,
would support secure,P2P transactions with out the need for trusted third parties such as banks or
governments. Nakamotos real identity remains a mystery ,but there has been no shortage of
theories.

The Bitcoin /block chain architecture was introduced and built on technologies and concepts
from the previous three decades. Nakamotos design also presented the concept of a “chain of
blocks,” making it possible to add blocks without requiring them to be signed by a trusted third
party. Nakampoto efined an electronic coin as a” chain o digital signatures,” in which each
owners transfer the coin to the next owner by “digitally signing a hash of the previous
transaction and the public key of the next owner and adding these to the end of the coin.”

2009

Crypto currency was launched during the Great Recession, when the government pumped large
amounts of money into the economy. Bitcoin was worth less than a penny then. Nakamoto mined
the first Bitcoin block, validating the blockchain concept. The block contained 50 bitcoin and
was known as the Genesis block -- aka block 0. Nakamoto released Bitcoin v0.1 to the web
service SourceForge as open source software. Bitcoin is now on GitHub.

The first Bitcoin transaction took place when Nakamoto sent Hal Finney 10 bitcoin in block 170.
The Bitcoin-dev channel was created on the text-based instant messaging system Internet Relay
Chat for Bitcoin developers. The first Bitcoin exchange -- Bitcoin Market -- was established,
enabling people to exchange paper money for bitcoin. Nakamoto launched the Bitcoin Talk
forum to share Bitcoin-related news and information. In the spirit of crypto currency as money
with fixed supply, Nakamoto set up a system to ensure the number of bitcoin mined won't ever
exceed 21 million.

2010

On May 22, Bitcoin made history when a programmer Laszlo Hanyecz paid 10,000 bitcoin for
two delivered Papa John's pizzas. The two pizzas back then were valued at about $40, a
transaction that would balloon to a value of more than $260 million at today's bitcoin price
level.A short time later that year, programmer Jed McCaleb launched Mt. Gox, a Tokyo-based
Bitcoin exchange. Mt. Gox was short for Magic: The Gathering Online exchange -a carryover
from a fantasy card game. At its peak, Mt. Gox handled more than 70% of all Bitcoin
transactions. But in August, a hacker exploited a bug in the blockchain code and created more
than 184 billion bitcoin in block 74,638, tarnishing Bitcoin's reputation. Nakamoto published a
new version of the Bitcoin software, but by the end of the year, he disappeared from the Bitcoin
scene completely.

2011

One-fourth of the 21 million bitcoin had been mined. By early February, the value of a bitcoin
was equal to the U.S. dollar. Shortly thereafter, McCaleb sold Mt. Gox to Mark Karpelès. And
soon after that, the bitcoin reached parity with the euro and British pound sterling. WikiLeaks
started accepting bitcoin donations. However, Mt. Gox was hacked and bitcoin were stolen,
causing an artificial drop in value and resulting in suspension of trading. Litecoin was released in
October, representing one of the earlier Bitcoin spinoffs and considered the first alternative
cryptocurrency.

2012

The interest in cryptocurrencies solidified. Bitcoin's price hovered around $5 for most of the year
with several fluctuations. Early that year, Mihai Alisie and Ethereum creator Vitalik Buterin
launched Bitcoin Magazine and published their first issue in May. A few months later, the
Bitcoin Foundation was established to promote Bitcoin and restore public perceptions of
cryptocurrency after several scandals. McCaleb and Chris Larsen founded OpenCoin, which led
to the development of the Ripple transaction protocol for currency transactions and real-time
payments. Coinbase raised more than $600,000 in its crowd-funded seed round on its way to
becoming one of the top Bitcoin exchanges.

2013
Ulbricht for a litany of crimes, including drug trafficking Bitcoin's upward trajectory continued.
In February, Coinbase reported selling $1 million worth of bitcoin in a single month at more than
$22 each. By the end of March, with 11 million bitcoin in circulation, the currency's total value
exceeded $1 billion. And in October, the first reported bitcoin ATM launched in a Vancouver,
B.C, coffee shop.But it wasn't all good news for digital currency. Both Thailand and China
banned cryptocurrencies. The U.S. Federal Court seized Mt. Gox's funds in the U.S. for
transmitting money without a license. And the FBI shut down the dark web marketplace Silk
Road, confiscating about 144,000 bitcoin worth more than $1 billion and resulting in a life prison
sentence for the owner Ross, computer hacking and money laundering.

2014

Despite setbacks, one of the more important milestones in blockchain's history occurred
when Bitcoin Magazine co-founder Buterin published a white paper proposing a decentralized
application platform, leading to the creation of Ethereum and the Ethereum Foundation.
Ethereum paved the way for blockchain technology to be used for applications other than
cryptocurrency. It introduced smart contracts and provided developers with a platform for
building decentralized applications.Financial institutions and other industries began to recognize
and explore blockchain's potential, shifting their focus from digital currency to the development
of blockchain technologies. But Bitcoin stayed in the spotlight -- for better and worse. The Mt.
Gox Bitcoin exchange filed for bankruptcy. The Bitcoin Foundation vice chairperson was
arrested for money laundering. And the U.K. tax authority classified bitcoin as private money.
Yet several companies accepted bitcoin by year's end, including the Chicago Sun-Times,
Overstock.com, Microsoft, PayPal and Expedia. Bitcoin's acceptance only added fuel to
blockchain's fire.

2015

. The Ethereum Frontier network launched, enabling developers to write smart contracts and
decentralized apps that could be deployed to a live network. Ethereum was on its way to
becoming one of the biggest applications of block chain technology. It drew in an active
developer community that continues to this day. In addition, Nasdaq initiated a block chain trial.
The Linux Foundation launched the Hyperledger project. And nine major investment banks
joined forces to form the R3 consortium, exploring how blockchain could benefit their
operations. Within six months, the consortium grew to more than 40 financial institutions.

2016

The term block chain gained acceptance as a single word, rather than being treated as two
concepts, as they were in Nakamoto's original paper. The Chamber of Digital Commerce and the
Hyperledger project announced a partnership to strengthen industry advocacy and education. A
bug in the Ethereum decentralized autonomous organization code was exploited, resulting in a
"hard fork" in the Ethereum network. The Bitfinex crypto currency exchange was hacked and
nearly 120,000 bitcoin were stolen -- a bounty worth about $66 million.

2017

Bitcoin hit a record high of nearly $20,000. Japan recognized bitcoin as legal currency. Seven
European banks formed the Digital Trade Chain Consortium to develop a trade finance platform
based on block chain. The Block one software company introduced the EOS block chain
operating system, based on the EOS crypto currency and designed to support
commercial decentralized applications. About 15% of global banks used block chain technology
in some capacity.

2018

Entering its 10th year, bitcoin's value continued to drop, ending the year at about $3,800. The
online payment firm Stripe stopped accepting bitcoin payments. Google, Twitter and Facebook
banned crypto currency advertising. South Korea banned anonymous crypto currency trading but
announced it would invest millions in block chain initiatives. The European Commission
launched the Block chain Observatory and Forum to accelerate the development of block chain.
Baidu introduced its block chain-as-a-service platform.

2019

Walmart launched a supply chain system based on the Hyperledger platform. Amazon
announced the general availability of its Amazon Managed Block chain service on AWS to help
users build resilient Web 3.0 applications on public and private block chains. Ethereum network
transactions exceeded one million per day. Block chain research and development took center
stage as organizations embraced block chain technology and decentralized applications for a
variety of use cases.

2020

A Deloitte survey revealed that nearly 40% of respondents incorporated block chain into
production, and 55% viewed block chain as a top strategic priority. Ethereum launched the
Beacon Chain in preparation for Ethereum 2.0. Stable coins, whose value is tied to another asset
class, rose significantly because they promised more stability than traditional cyber currencies.
Interest increased in combining block chain with AI to optimize business processes.

2021

Bitcoin reached an all-time high of $68,789.63 on Nov. 10, 2021. During its bull run, the bitcoin
market cap surpassed $3 trillion. Coinbase went public and was acknowledged as the seventh
biggest new listing of all time on the U.S. stock exchange. The DeFi market offering services
through smart contracts on block chain grew a whopping 600% from the previous year, reaching
a value of $200 billion. And NFT artwork made headlines, selling for more than $69 million in
Ethereum at the auction house Christie's. Well-known entrepreneurs and athletes attempted to
capture the meteoric rise in bitcoin's value, including Elon Musk initially accepting crypto
currency as payment on new Tesla vehicles and Aaron Rogers taking a portion of his
multimillion-dollar NFL salary in bitcoin

2022

NFTs continued their ascent, eco-friendly block chain networks emerged and block chain
applications increased among companies. Bitcoin mining crept closer to Nakamoto's 21 million
coin limit, reaching 19 million and leaving less than 10% of bitcoin to be mined.Globally,
Danish shipping company Maersk announced the shutdown of the block chain-based Trade Lens
digital ledger it co-developed with IBM because of a lack of player participation. And the
Australian Stock Exchange scrapped a seven-year plan to move its trading platform to block
chain. More than 100 countries were involved in the creation of their own central bank digital
currencies, according to Statista. CBDCs are digital versions of real-world fiat money to
eventually help speed cross-border retail transactions on block chain in contrast to the slower
speeds and price volatility of crypto currency. Block chain's vaunted claims of imperviousness
came under attack -- and not just figuratively. Block chain analysis firm Chainalysis identified
nearly 200 crypto currency or block chain hacks, resulting in losses of $3.8 billion. The most
noteworthy incident occurred when the video game block chain Ronin Network reported the
theft of $625 million worth of Ether and USDC stable coins. The U.S. Treasury Department
blamed a North Korean hacker collective for the attack.

2023

The bad news for crypto currency continued as the SEC indicted executives at the Coin base and
Binance exchanges and filed charges against crypto-asset entrepreneur Justin Sun and three of
his wholly owned companies for the unregistered offer and sale of crypto-asset securities.
Businesses are still moving ahead with block chain, but they're proceeding with greater caution.
While block chain technology has been mostly applicable to finance services and banking, other
viable applications include gaming, media and entertainment, real estate, healthcare, cyber
security, smart contracts, NFTs, IoT, transportation, supply chain management and the
government. But the latest iteration of the internet, Web 3.0, with its offer of decentralization and
data security, may well be the greatest driver of block chain technology. Bitcoin for now has
found some relatively solid footing in the $25,000 to $30,000 range. Bitcoin mining should reach
Nakamoto's 21 million limit sometime around 2140.

Beyond 2023

Block chain's promise of secure and transparent transactions without the need for intermediaries
will potentially change the way enterprises conduct practically every aspect of their daily
business operations for decades to come. Technologies like AI, IoT, NFTs and the metaverse
will be significantly impacted by block chain. Gartner pegs the business value of block chain at
more than $360 billion by 2026 modest when compared to the research firm's estimate of $3.1
trillion by 2030. Other estimates place the block chain market at about $1 trillion by the end of
the decade.

7.3.2 Block chain explained

A Block chain is a digital ledger or database where encrypted blocks of digital asset data are
stored and chained together, forming a chronological single-source-of-truth for the data.

 Digital assets are distributed, not copied or transferred.

 Digital assets are decentralized, allowing for real-time accessibility, transparency and
governance amongst more than one party.
 Block chain ledgers are transparent — any changes made are documented, preserving
integrity and trust.
 Block chain ledgers are public and constructed with inherent security measures, making it
a prime technology for almost every sector.
 There are 4 types of block chain

 Private block chain or permissioned, block chains require approval to access.

These block chains offer enhanced privacy and control over data, making them
suitable for applications that require strict access controls and compliance with
regulations. In a private, permissioned blockchain, such as Multichain, every node
might be able to perform transactions, but participation in the consensus process is
restricted to a limited number of approved nodes.
 Public blockchain or permissionless blockchain doesn't require permission to enter
the block chain network. In a public, permissionless block chain like Bitcoin, every
node in the network can conduct transactions and participate in the consensus
process.
 Hybrid block chain. A hybrid block chain is a type of block chain that combines the
characteristics of permissioned and permissionless block chains. A hybrid block
chain is set up by a single organization and consists of one public system on top of a
private system, giving the organization access control over sensitive data.
 Consortium block chain or federated, block chain is a type of hybrid block chain
in which a group of organizations governs the block chain. Consortium block chains
combine the benefits of decentralization and privacy, making them suitable for
industries that require collaboration and trust among a select group of participants.
However, the breach of just one member node can compromise its security.
7.3.3 What are the main pillars of block chain technology?

Block chain Technology also has its own pillars that help it stand out in the business world –
And the ones that are the main reason for its growth and immense success are:
  Decentralization
 Transparency
 Immutability

But there are many pillars but 3 pillars are mainly important.

1. Decentralization:-Block chain technology is a decentralized system, which means that there

is no central authority controlling the network. Instead, the network is made up of a large
number of nodes that work together to verify and validate transactions. Each and every node
in the block chain network will have the same copy of the ledger.

Decentralization in block chain refers to transferring control and decision making from a
centralized entity (individual ,organization, or group) to distributed network.

Decentralization property offers many advantages in the block chain network

 As a block chain network does not depend on human calculations it is fully organized and fault-
tolerant.
 There is no third-party involved hence no added risk in the system.
2. Transparency:-Openness or transparency” is among block chain technology’s most charming
and misunderstood notions. A small number of people state that block chain provides you
maintenance & safety. On the other hand, some of them also applaud its open or transparent
technique. In short, a person’s identity is easily hidden via the complex coding within block
chain technology. If you can explore a person’s exchange record, you won’t see “Kevin
Brown Sent 1 BTC”.

In its place, you will see something like an encrypted code or

“1MF1bhsFLkBzzz9vpFYEmvwT2TbyCt7NZJ sent 1 BTC”. Due to this trait, the person’s
identity is safe – but you will still witness every collaboration finished because of the open
environment. From the stance of digital currency, if you know the visible locale of one of the
banking establishments, you can just look at all the interactions that they have held with them.
This lets them be open – something they have never achieved before. However, whether they do,
they won’t totally change their trade patterns and use cryptographic means of currency .Here is an
example of the transparency of block chain technology in a manufacturing business.
3. Immutability:-means that the block chain permanent and is a unalterable network. Block chain
technology functions Immutability means that the block chain is a permanent through a
collection of nodes. Once a transaction is recorded on the block chain, it cannot be modified or
deleted. This makes the block chain an immutable and tamper-proof ledger that provides a high
degree of security and trust.

Every node in the network has a copy of the digital ledger. To add a transaction every node
checks the validity of the transaction and if the majority of the nodes think that it is a valid
transaction then it is added to the network. This means that without the approval of a majority of
nodes no one can add any transaction blocks to the ledger.

Any validated records are irreversible and cannot be changed. This means that any user on the
network won’t be able to edit, change or delete it.

7.3.4 How block chain works?

Block chain allows for the secure management of a shared ledger, where transactions are verified
and stored on a network without a governing central authority.
Block chains can come in different configurations, ranging from public open-source networks to
private block chains that require explicit permissions to read or write.
1.Transaction:- Two parties exchange data; this could represent money,contracts, deeds,
medical records, customer details, or any other asset that can be described in digital form.
2 .Verification:- Depending on the network’s parameters, the transaction is either verified
instantly or transcribed into a secured record and placed in a queue of pending transactions. In
this case nodes the computers or servers in the network determine if the transactions are valid
based on a set of rules the network has agreed to.
3. Structure:- Each block is identified by a hash, a 256-bit number created using an algorithm
agreed upon by the network. A block contains a header, a reference to the previous block’s
hash, and a group of transactions. The sequence of linked hashes creates a secure, interdependent
chain.
4. Validation:- Blocks must first be validated to be added to the block chain. The most accepted
form of validation for open-source block chains is proof of work—the solution to a
Mathematical puzzle derived from the block’s header.

5. Block chain mining:- Minerstry to “solve” the block by making incremental changes to one
variable until the solution satisfies a network-wide target. This is called “proof of work” because
correct answers cannot be falsified; potential solutions must prove the appropriate level of
computing power was drained in solving.
6. Built-in defense:- If a malicious miner tries to submit an altered block to the chain, the hash
function of that block, and all following blocks, would change. The other nodes would detect
these changes and reject the block from the majority chain, preventing corruption.
7. The chain:- When a block is validated, the miners that solved the puzzle are rewarded and the
block is distributed through the network. Each node adds the block to the majority chain,
the networks immutable and auditable block chain.
Figure2.Financial Transactions using the Block chain technology

7.3.4.1 Advantage and disadvantage in using/working block chain

Advantage:-

Uncorruptible:-. It's almost impossible to corrupt a block chain because millions of computers
share and continually reconcile the information. Block chain also has no single point of failure.

Efficient:-Transactions are often more efficient than in non-DLT-based transactional systems,

though public block chains can sometimes suffer from slow speed and inefficiency.

Resilient:- Block chain is resilient; if one node goes down, all the other nodes have a copy of the
ledger.

Trustworthy:- It provides trust among participants on a network. Confirmed blocks are difficult
to reverse, which means data is difficult to remove or change.

Cost-effective:- It can be cost-effective because it often reduces the expense associated with
transactions by eliminating middlemen and third parties.

Disadvantage:-

Ownership:- Block chain can raise questions in the network about ownership and who's
responsible when problems arise.
Infrastructure issues:- Questions also come up about whether organizations are capable of
investing in the infrastructure needed to build, participate and maintain a block chain-based
network, or even willing to do so.

Data challenges:- Changing data in a block chain typically takes a lot of work.

Private keys:-Users have to keep track of their private keys to avoid losing their money.

Storage:-The need for storage can grow to be very large over time, which risks the loss of nodes
if the ledger becomes too large for users to download.

Vulnerabilities:-Block chain is susceptible to 51% attacks, which is a specific attack designed to

overwhelm other participants and change blocks.

7.3.5 Why do people use the peer to peer network?

Because the primary goal of peer-to-peer networks is to share resources and help computers and
devices work collaboratively, provide specific services, or execute specific tasks. As mentioned
earlier, P2P is used to share all kinds of computing resources such as processing power, network
bandwidth, or disk storage space. However, the most common use case for peer-to-peer networks
is the sharing of files on the internet. Peer-to-peer networks are ideal for file sharing because
they allow the computers connected to them to receive files and send files simultaneously.

 When it comes to file-sharing, the larger a peer-to-peer network is, the faster it is. Having
the same file stored on many of the peers in a P2P network means that when someone
needs to download it, the file is downloaded from multiple locations simultaneously.
P2P networks can be classified into two types
1. Pure P2P network.
2. Hybrid P2P network.

1.1 Pure P2P network

In a pure P2P network, the system does not rely on a central mainstream server to help in
controlling, coordinating or managing the exchange of information among the peers. In this P2P
network, all participating peers are equal and each peer plays the role of both client and server.
All participating peers are equal, and each peer plays both the role of client and of server.
Examples of a pure P2P network are Gnutella and Free Net.

1.2 Hybrid P2P network:-In a hybrid P2P network, to facilitate the P2P service some
administrative functions are perform by a central server. For example, in Napster, a server helps
peers to “search for particular files and initiate a direct transfer between the clients”. Only a
catalogue of available files is kept on the server, while the actual files are scattered across the
peers on the network. Another example is Bit Torrent (BT), where a central server called a
tracker helps coordinate communication among BT peers in order to complete a download.
 P2P network can also be classified into the following types
1. Centralized P2P network
2. Decentralized P2P network
The Decentralized P2P network can be further divided into 1. Structured 2.Unstructured
1.3 Centralized P2P Network:-Centralized P2P systems has the features of both centralized and
decentralized architectures. Like a client-server system, there are one or more central servers,
which help peers to locate their desired resources or act as task scheduler to coordinate actions
among them. To locate resources, a peer sends messages to the central server to determine the
addresses of peers that contain the desired resources or to fetch work units from the central
server directly. However, like a decentralized system, once a
peer has its information, it can communicate directly with other peers (without going through the
server anymore). As in all centralized systems, this category of P2P systems are susceptible to
malicious attacks and single point of failure. Moreover, the centralized server will become a
bottleneck for a large number of peers, potentially degrading performance dramatically. Finally,
this type of system lacks scalability and robustness. Some examples of this architecture include
Napster and BOINC.

1.4 Decentralized P2P Network:-In a decentralized P2P system, peers have equal rights and
responsibilities. Each peer has only a partial view of the P2P network and offers data that may be
relevant to only some peers. As such, locating peers offering data quickly is a critical and
challenging issue. The advantages of these systems are obvious:

(a) They are immune to single point of failure. (b) Possibly enjoy high performance, scalability,
robustness, and other desirable features.

1.5. Structured P2P Network:-Structured P2P networks have the characteristic of using some
type of algorithm for organization and optimization of the network. To ensure that any type of
network can proficiently route a search to some peer that has a desired file, Structured P2P
network use some type of global protocol. Example of Structured P2P network is Free net, Chord
etc.

1.6 Unstructured P2P Network:-Unstructured P2P network do not follow any structured way for
file placement and do not optimize the search algorithm. Due to their unstructured way, they
flood the queries in network and increase the network congestion. Example of unstructured P2P
network is Gnutella.

7.3.6 Application of block chain

1. Voting:-If personal identity information is held on a block chain, that puts us just one step
away from also being able to vote using block chain technology. Using block chain technology
can make sure that nobody votes twice, only eligible voters are able to vote, and votes cannot be
tampered with. What's more, it can increase access to voting by making it as simple as pressing a
few buttons on your smart phone. At the same time, the cost of running an election would
substantially decrease.

2. Money transfer:-The original concept behind the invention of block chain technology is still
a great application. Money transfers using block chain can be less expensive and faster than
using existing money transfer services. This is especially true of cross-border transactions, which
are often slow and expensive. Even in the modern U.S. financial system, money transfers
between accounts can take days, while a block chain transaction takes minutes.

3. Financial exchanges:-Many companies have popped up over the past few years offering
decentralized crypto currency exchanges. Using block chain for exchanges allows for faster and
less expensive transactions. Moreover, a decentralized exchange doesn't require investors to
deposit their assets with the centralized authority, which means they maintain greater control and
security. While block chain-based exchanges primarily deal in crypto currency, the concept
could be applied to more traditional investments as well.

4. Lending:-Lenders can use block chain to execute collateralized loans through smart contract.
Smart contracts built on the block chain allow certain events to automatically trigger things like a
service payment, a margin call, full repayment of the loan, and release of collateral. As a result,
loan processing is faster and less expensive, and lenders can offer better rates.

5. Insurance:-Using smart contracts on a block chain can provide greater transparency for
customers and insurance providers.. Recording all claims on a block chain would keep customers
from making duplicate claims for the same event. Furthermore, using smart contracts can speed
up the process for claimants to receive payments.

6. Real estate:-real estate transactions require a ton of paperwork to verify financial information
and ownership and then transfer deeds and titles to new owners. Using block chain technology to
record real estate transactions can provide a more secure and accessible means of verifying and
transferring ownership. That can speed up transactions, reduce paperwork, and save money.

7. Secure personal information

Keeping data such as your Social Security number, date of birth, and other identifying
information on a public ledger (e.g., a block chain) may actually be more secure than current
systems more susceptible to hacks. Block chain technology can be used to secure access to
identifying information while improving access for those who need it in industries such as travel,
healthcare, finance, and education.
8. Logistics and supply chain tracking:- Using block chain technology to track items as they
move through a logistics or supply chain network can provide several advantages. First of all, it
provides greater ease of communication between partners since data is available on a secure
public ledger. Second, it provides greater security and data integrity since the data on the block
chain can't be altered. That means logistics and supply chain partners can work together more
easily with greater trust that the data they're provided is accurate and up to date.

9. Data storage:-Adding block chain technology to a data storage solution can provide greater
security and integrity. Since data can be stored in a decentralized manner, it will be more
difficult to hack into and wipe out all the data on the network, whereas a centralized data storage
provider may only have a few points of redundancy. It also means greater access to data since
access isn't necessarily reliant on the operations of a single company. In some cases, using block
chain for data storage may also be less expensive.

10. Gambling:-The gambling industry can use block chain to provide several benefits to
players. One of the biggest benefits of operating a casino on the block chain is the transparency it
provides to potential gamblers. Since every transaction is recorded on the block chain, bettors
can see that the games are fair and the casino pays out. Furthermore, by using block chain, there's
no need to provide personal information, including a bank account, which may be a hurdle for
some would-be gamblers. It also provides a workaround for regulatory restrictions since players
can gamble anonymously and the decentralized network isn't susceptible to government
shutdown.

11. Artist royalties

Using block chain technology to track music and film files distributed over the internet can make
sure that artists are paid for their work. Since block chain technology was invented to ensure the
same file doesn't exist in more than one place, it can be used to help reduce piracy. What's more,
using a block chain to track playbacks on streaming services and a smart contract to distribute
payments.