MODULE 1 - DLT and Blockchain

⛓️Blockchain

Key Features of Blockchain

→ Write-only, immutable, transparent data storage.
→ Decentralized, no need for intermediaries.
→ Consistent state across all participants.
→ Resistant against malicious participants.
→ Open to everyone.

Architectural view of Blockchain Structure

🌀Types of blockchain

🔐Blockchain Cryptography

→ Confidentiality: This refers to the challenge of keeping information private and

preventing unauthorized access from those who shouldn't see it.
→ Integrity: This is about ensuring that data remains accurate and hasn't been
tampered with or altered by unauthorized individuals or processes.
→ Non-repudiation: This addresses the issue of denying actions. It aims to provide
proof that a certain action or transaction occurred and that the involved party cannot
later deny it.
→ Authentication: This is the challenge of verifying the identity of users, devices, or
systems to ensure they are who they claim to be before granting access or allowing
transactions.
→ 3 TYPES OF Cryptography - Symmetric | Asymmetric | Hash-based.
1. Symmetric Cryptography -
2. Asymmetric Cryptography -

3. Hash Function Cryptography - (Widely used)

{Input → (Hash Function: SHA1, SHA256, MD5, etc) → Output (fixed length)}
Properties: Deterministic, Computationally Efficient, Collision Resistant, Cannot
be reverse engineered, Pre-image resistance.

🎓CAP theorem
→ CAP Theorem stands for Consistency, Availability, and Partition Tolerance.
According to the theory, a distributed system cannot always ensure consistency,
availability, and partition tolerance.
→ Based on a theory from theoretical computer science about distributed data stores
“CAP Theorem or Brewer’s theorem states that it is feasible to provide either
consistency or availability—but not both—in the event of a network failure on a
distributed database”
→ When things go wrong, we must prioritize at most two distributed system features
and trade-offs between them.

1. Availability over consistency (A+P)

→ When availability is preferred over consistency the system will always process the
query and attempt to return the most recent version of the data even if it cannot
ensure that it is up to date because of network partitioning.

2. Consistency over availability (C+P)

→ Consistency is required if the database’s data must always be current and aligned,
even in the event of a network failure.
→ When you need several clients to share the same view of the data, consistency is a
particular use case where you should prioritize it. Use a database, for instance, that
provides consistency and assurance that the data you are looking at is up to date in
cases when the network is unreliable or malfunctions while dealing with financial or
sensitive information.
→ For example, Information about bank accounts must be consistent and accurate
because it is sensitive information. Therefore, it is preferable to announce an outage if
the most recent accurate information is not accessible than to provide the consumer
with inaccurate information.

Which one does Bitcoin sacrifice? Availability, consistency, or partition

tolerance?
→ As blockchain networks (such as Bitcoin) are distributed systems, they have to deal
with Partition tolerance. Out of the two options that remain, they choose Availability
over Consistency.
→ If, for example, Bitcoin would instead choose consistency, it would mean that in the
event of a connectivity problem, or any failing node/component (which happens all the
time), you wouldn’t be able to use/send/receive Bitcoin.
→ Blockchain networks in general use other means of becoming eventually consistent
over time: through mining and blocks.

🎄 Merkel tree
→ A Merkle tree, also known as a binary hash tree, is a data structure used to
efficiently summarize and verify the integrity of large sets of data. It serves to create
a single, robust "digital fingerprint" for a potentially vast amount of information.
→ In computer science, a "tree" is a branching structure. Merkle trees are typically
represented upside down, with the "root" at the top and the data "leaves" at the
bottom.
→ Merkle trees are notably employed in Bitcoin to summarize all the transactions
within a block. This generates a single hash – the Merkle root.
→ The construction of a Merkle tree involves these steps:
1.​ Start with the leaves: The actual data (e.g., transactions) constitutes the
"leaves" at the base. Each piece of data is hashed (using a cryptographic hash
function like SHA256), and that hash is stored in its corresponding leaf node.
1.​ Hash pairs of nodes: Pairs of leaf nodes are then combined. The hashes from
the two child nodes are concatenated, and this combined data is hashed again
to produce a new hash, which is stored in the parent node.
2.​ Repeat the hashing process: This combining and hashing procedure is
repeated, progressing up the tree level by level.
3.​ Reach the Merkle root: Ultimately, this process culminates in a single hash at
the very top of the tree, known as the "Merkle root."

“Duplication of last node if not even”

Handling Unbalanced Trees:
→ Merkle trees are most efficient when they are balanced (i.e., each level of the tree is
fully filled, or as full as possible). This usually means having a number of leaves that is a
power of 2 (e.g., 4, 8, 16).
→ To handle cases where the number of data elements is odd, the common practice is
to duplicate the last leaf node.

Advantages of Merkle Trees:

●​ Efficient Data Verification: Merkle trees enable very efficient verification of
whether a specific data element is included in a large dataset.
●​ Data Integrity: They provide strong cryptographic proof of data integrity. Any
tampering with the data will be readily detectable.
●​ Reduced Bandwidth: They minimize the amount of data that needs to be
transmitted for verification.

Disadvantages of Merkle Trees:

●​ Computational Overhead: Calculating the hashes for the tree does require
computational power, particularly for very large datasets.
●​ Storage Overhead: While more efficient than storing all the data, storing the
intermediate hashes in the tree does necessitate additional storage space.
●​ Complexity: Implementing and comprehending Merkle trees can be more
intricate than simpler data structures.

🪙Distributed Ledger Technology

→ A distributed ledger is a type of data structure which resides across multiple
computer devices, generally spread across locations or regions.
→ While distributed ledgers existed prior to Bitcoin, the Bitcoin blockchain marks the
convergence of a host of technologies, including timestamping of transactions, Peer-to-
Peer (P2P) networks, cryptography, and shared computational power, along with a new
consensus algorithm.
→ DLT generally consists of three basic components:
1.​ Data model that captures the current state of the ledger - blockchain
2.​ Language of transactions that changes the ledger state – smart contracts
3.​ Protocol used to build consensus among participants around which
transactions will be accepted, and in what order, by the ledger

🤔How does DLT/Blockchain work?​

🥷🏻DLT vs Blockchain
Byzantines Generals Problem (BGP)

Byzantines Fault Tolerance (BFT)

→ BFT originates from the "Byzantine Generals' Problem," a thought experiment that
illustrates the challenges of achieving consensus in a distributed system where some
components might be unreliable or even actively malicious. Imagine several army
generals surrounding a city, needing to coordinate an attack. They can only
communicate by messengers, but some generals (or messengers) might be traitors.
These traitors could spread false information, leading to a disorganized attack and
defeat. The core problem is how the loyal generals can agree on a plan despite the
possibility of treachery.
Relevance to Distributed Systems:
This problem is highly relevant to distributed computing systems, where multiple
computers or nodes must work together. In such systems, components can fail,
software bugs can occur, or malicious actors can try to disrupt operations. BFT is
crucial for ensuring that the system as a whole continues to function correctly, even if
some of its parts are compromised.

Key Characteristics of BFT Systems:

Consensus Despite Faults: BFT systems are designed to reach a reliable consensus on
a single state or decision, even when some nodes provide incorrect or conflicting
information.
Fault Tolerance: They can tolerate a certain number of faulty nodes, allowing the
system to remain operational.
Resilience to Malicious Attacks: BFT goes beyond simply handling accidental failures;
it also addresses intentional attacks, such as nodes deliberately sending false data.

How BFT Works (General Principles):

Redundancy: BFT systems often use redundancy, where data or computations are
replicated across multiple nodes. This way, if some nodes fail, others can still provide
correct information.
Quorum: Decisions are typically based on a "quorum," meaning a majority or a specific
number of nodes must agree. This prevents a small number of faulty nodes from
influencing the outcome.
Communication Protocols: BFT systems employ complex communication protocols to
exchange information, verify messages, and detect inconsistencies. These protocols
might involve multiple rounds of communication and voting.
Cryptographic Techniques: Cryptography can be used to authenticate messages,
verify their integrity, and prevent tampering. Digital signatures, for example, can
ensure that a message truly came from a specific node.

🚲 Transaction Life Cycle

🎁Structure of block
A single block in a blockchain is like a digital container holding verified information,
linked securely to the blocks before it. It typically has two main parts:
1. Block Header: Contains metadata about the block.
-​ Previous Block Hash: A unique "fingerprint" of the block that came before it,
creating the chain.
-​ Merkle Root: A single "fingerprint" of all the transactions inside this block,
ensuring they haven't been tampered with.
-​ Timestamp: Records when the block was created.
-​ Nonce: A random number used by miners/validators to solve a puzzle and
create the block.
-​ Difficulty Target: Defines how hard it is to create a new block.
2. Block Body: Contains the actual data being recorded, which is usually a list of
Transactions.

🏦Block Height
The block height of a particular block is defined as the number of blocks preceding it
in the blockchain. As of April 2021, the block height for the Bitcoin blockchain exceeds
677,350 blocks, with approximately 144 new blocks added daily
 MODULE 2 - Sabka Baap: Bitcoin Dada!
Bitcoin

Bitcoin Transaction Cycle

Bitcoin wallets
1.​ Desktop Wallet: This is software you install on your computer. It gives you a lot
of control and features. However, if your computer gets hacked, your Bitcoin
could be at risk.
2.​ Mobile Wallet: This is an app on your phone. It's convenient for everyday use
and making payments. Like desktop wallets, security depends on your phone's
security.
3.​ Web Wallet: Your Bitcoin is stored on a server owned by a third-party website.
You can access it through a web browser. This is easy to use, but you have to
trust the website to keep your Bitcoin safe. It's like keeping your money in
someone else's online account.
4.​ Hardware Wallet: This is a special physical device made just for storing Bitcoin
keys securely. It's considered very safe because the keys are kept offline and
only connect to your computer when you need to make a transaction. It's like a
physical safe for your Bitcoin.
5.​ Paper Wallet: Your private and public keys are printed out on a piece of paper.
This is a very secure way to store Bitcoin long-term because it's completely
offline (also called "cold storage"). However, you need to keep the paper safe
from damage and make sure no one else sees it.
UTXO

⚾Base58
→ Bitcoin addresses are long strings of characters, which can be confusing. Base58
encoding helps by removing similar-looking characters.
Example:
A Bitcoin address before Base58 encoding: 0x0OIl123456789ABC... (hard to read)
After Base58 encoding: 1AliceXyzABC123... (easier to read)
👉 Key Takeaway: Base58 avoids characters like 0, O, I, l to reduce human errors
when typing or sharing addresses.

💪🏻BIP-38 (Encrypting Private Keys)

→ Alice wants to store her Bitcoin securely on a piece of paper but fears that
someone might steal her private key.
Solution (BIP-38): She encrypts her private key using a password.
The encrypted key looks like: 6PRWvU... (encrypted format)
Even if a hacker finds this key, they cannot use it without the password.
👉 Key Takeaway: BIP-38 encrypts private keys to add an extra layer of security.
🚙 Vanity Address
→ Bob wants a Bitcoin address that starts with "1Bob..." to personalize it.
Solution: He uses a vanity address generator to find a private key that produces:
1BobRocksCryptoXYZ...
👉 Key Takeaway: Vanity addresses make Bitcoin addresses memorable but
require extra computing power to generate.

🫂Pay-to-Script (P2SH) & Multisig Addresses

→ A company (XYZ Corp) wants to secure its funds so that at least 2 out of 3
executives must approve any transaction.
Solution (Multisig Address - P2SH):
The company creates a 2-of-3 multisig address: 3XYZCorpMulti... (P2SH address)
This address requires 2 of 3 private keys to spend Bitcoin.
When the company wants to withdraw funds:
-​ CEO signs the transaction
-​ CFO also signs it
The network verifies that at least 2 of 3 signatures are present and approves the
transaction.
👉 Key Takeaway: Multisig addresses add extra security, useful for businesses,
family accounts, or escrow services.

🏧Simplified Payment Verification (SPV)

→ SPV nodes allow lightweight wallets to verify transactions without storing the
full blockchain.
Example: Alice’s mobile wallet doesn’t download the entire blockchain. It queries a full
node: “Is my transaction confirmed?” (as the name says simple payment verification)
The full node provides a Merkle proof.
👉 SPV nodes offer faster transactions but rely on full nodes.

Important Points about SPV

RISKS involving with SPV

→ SPV nodes are vulnerable to network partitioning attacks or Sybil attacks. In these
attacks, SPV nodes can be connected to fake nodes or fake networks, losing access to
honest nodes or the real Bitcoin network.

⛩️Bitcoin Relay Network

→ In Bitcoin mining, miners compete to solve a cryptographic puzzle and add a new
block to the blockchain. The faster a miner can broadcast their newly mined block to
the network, the higher the chances of receiving the block reward. Thus, low-latency
communication is crucial to ensure blocks reach the network quickly.
→ The Bitcoin Relay Network (2015) was created to speed up block transmission
between miners. How It Worked:
-​ Specialized relay nodes were hosted on Amazon Web Services (AWS) in different
global regions.
-​ These nodes acted as a high-speed connection between mining pools, allowing
them to share new blocks faster than the public P2P network.
-​ This reduced latency and increased the efficiency of mining operations.
→ However, the Relay Network had limitations:
✔️ Required centralized servers (AWS)
✔️ Still relied on TCP, which has higher overhead.
🛜The Evolution: Fast Internet Bitcoin Relay Engine (FIBRE)
→ In 2016, Corallo replaced the Bitcoin Relay Network with FIBRE (Fast Internet Bitcoin
Relay Engine), which introduced several improvements:
How FIBRE Works
✅ UDP-based protocol: Unlike TCP, UDP does not require acknowledgment packets,
reducing latency.
✅ Compact Blocks Optimization: Instead of sending the full block, FIBRE sends only
missing transactions, reducing data size.
✅ Parallelized transmission: Blocks are broadcast simultaneously across multiple relay
nodes, ensuring minimal delay.

Extended Bitcoin Network

→ The Bitcoin network isn't just one monolithic entity. It has a core, but it also has
extensions that allow for more specialized functions.
→ Attached to the main bitcoin P2P network are a number of pool servers and
protocol gateways that connect nodes running other protocols.
→ These other protocol nodes are mostly pool mining nodes and lightweight wallet
clients, which do not carry a full copy of the blockchain.
Think of it like this:
-​ The main Bitcoin network is where the fundamental Bitcoin transactions happen,
using the peer-to-peer protocol.
-​ But then you have other parts "attached" to it. These include things like:
A.​ Pool servers, which coordinate mining.
B.​ Special gateways that let different kinds of systems talk to each other.
C.​ Nodes used by mining pools.
D.​ Lightweight clients, like those on phones, that don't hold the whole history
of Bitcoin.
→ So, the "Extended Bitcoin Network" is the whole ecosystem, with the core Bitcoin
P2P network plus all these extra pieces that help it function in different ways.

Nodes aur types

Different types of NODES on the Extended Bitcoin network

🪨Hard Fork
→ A hard fork is a radical change to the blockchain protocol that makes previously
valid transactions and blocks invalid. It's a non-backward-compatible change, meaning
that nodes that haven't upgraded to the new rules will not be able to validate blocks
created by nodes running the updated software. This essentially creates a permanent
split in the blockchain, resulting in two separate chains following different sets of rules.
-​ Non-Backward Compatibility: This is the defining characteristic. Old software
versions cannot process or validate blocks created under the new rules.
-​ Chain Split: A successful hard fork leads to the existence of two distinct
blockchains–the original chain and the new chain following the updated protocol.
-​ Mandatory Upgrade: All nodes in the network must upgrade their software to
the new rules if they want to continue participating in the new chain.
-​ Community Agreement (Ideally): While technically anyone can propose and
implement a hard fork, successful hard forks usually require significant
consensus within the community regarding the need for the changes.
-​ New Cryptocurrency: A hard fork can result in a new cryptocurrency if a
significant portion of the community adopts the new chain, and it continues to
exist independently of the original chain (e.g., Bitcoin Cash was a hard fork from
Bitcoin).
-​ Potential for Disruption: Hard forks can be disruptive to the network, especially
if there is no clear consensus, as it can lead to confusion and uncertainty about
which chain is the "real" one.
-​ Changes to Core Rules: Hard forks often involve significant changes to the
fundamental rules of the blockchain, such as block size limits, consensus
mechanisms, or even the total supply of the cryptocurrency.

Simple Example: Imagine a blockchain where the rule is that each block can contain a
maximum of 1 megabyte (1MB) of transaction data. Now, a group of developers
proposes a hard fork to increase the block size limit to 2 megabytes (2MB). Nodes that
upgrade to the new software will now create and accept blocks up to 2MB in size.
Nodes that do not upgrade will still only accept blocks up to 1MB. When a 2MB block is
created by an upgraded node, the non-upgraded nodes will consider it invalid because
it violates their rule (the 1MB limit). This leads to a split: the upgraded nodes continue
building a chain with the 2MB limit, while the non-upgraded nodes continue on the
original chain with the 1MB limit. These two chains are now separate and incompatible.

🥎Soft Forks
→ A soft fork is a change to the blockchain protocol that makes previously valid
transactions and blocks invalid according to the new rules, but these new blocks are still
considered valid by older, non-upgraded nodes. This is because soft forks introduce
new rules in a way that doesn't violate the old rules. Soft forks are
backward-compatible.
-​ Backward Compatibility: This is the key difference from hard forks. Old
software versions will still recognize and validate blocks created under the new,
more restrictive rules.
-​ No Permanent Chain Split (Usually): Because old nodes still see the new blocks
as valid, a permanent chain split is less likely. The network can generally
continue on a single chain with the new rules.
-​ Optional Upgrade (for full functionality): While old nodes will still accept the
new blocks, they might not be able to fully understand or utilize the new features
introduced by the soft fork. To take full advantage of the new functionalities,
nodes need to upgrade.
-​ More Restrictive Rules: Soft forks typically involve making the existing rules
more restrictive. For example, introducing a new type of transaction that
adheres to stricter conditions.
-​ Easier Adoption (Potentially): Due to backward compatibility, soft forks can
sometimes be easier to implement and gain network adoption compared to hard
forks, as non-upgraded nodes don't actively reject the new blocks.
-​ Risk of "Ignoring" New Features: Non-upgraded nodes will still see the new
blocks as valid but might not enforce or even be aware of the new rules or
features they contain.

Simple Example: Imagine the same blockchain where the rule is that each block can
contain any type of transaction. Now, a soft fork introduces a new rule: any transaction
spending a specific type of new address must include a digital signature using a new,
more secure cryptographic algorithm. Nodes that have upgraded will now enforce this
new rule for transactions spending these new types of addresses. If such a transaction
doesn't have the new signature, they will reject the block containing it. Nodes that
haven't upgraded will still see these blocks as valid. They will see a transaction with
potentially extra data (the new signature) but won't necessarily understand or validate
it according to the new rule. As long as the block adheres to the old rules (like the block
size limit and the basic transaction structure they understand), they will accept it.
The network can continue on a single chain. However, to create and fully validate
transactions involving the new address type, nodes need to upgrade.
Difference between Bitcoin and Ethereum

🎱Transaction pools (Memory Pool or Mempool)

→ Nodes use transaction pools to keep track of transactions that are known to the
network but are not yet included in the blockchain.
→ As transactions are received and verified, they are added to the transaction pool
and relayed to neighboring nodes to propagate on the network.
→ When a node starts, transaction and orphan pools are empty and are gradually
populated with new transactions received on the network.
→ The transaction and orphan pools only contain unconfirmed transactions, while the
UTXO pool only contains confirmed outputs.
 MODULE 3 - Besharam BC: Ethereum
Eth - Features | Benefits | Drawback | Components | Architecture | Networks | Testnets.

🚪Intro to ethereum.
→ Ethereum is a decentralized platform that runs smart contracts – applications that
run exactly as programmed without any possibility of downtime, censorship, fraud or
third party interference.

♦️Features of Ethereum
Benefits of Ethereum

Drawbacks Of Ethereum

🌀Components of ethereum network

→ ncega: Ethereum Node | Ethereum Client | Ether | Gas | Ethereum Accounts.
→ nsete: Nonce | Storage Root | Ethash | Transactions | EVM.

1.​ Ethereum Node & Ethereum Client.

 2.​ Ether
→ Ether (ETH) is the main cryptocurrency for the Ethereum network. It's a digital
currency that records and verifies every transaction.
→ Being the second-largest globally, it's primarily used within the Ethereum ecosystem.
You can buy ETH with other cryptocurrencies, but ETH is specifically needed to pay fees
("gas") for any action on Ethereum, including running smart contracts and rewarding
miners for securing the network.

3.​ Gas
→ Gas is the fuel for the Ethereum network, like gasoline for a car. To do anything on
Ethereum, you need to pay a small fee called gas, which is measured in units.
→ To complete every transaction on the Ethereum network, a consumer must first make
a payment—send out ethers—and the intermediate monetary value is known as gas.
→ The price of gas is very low compared to Ether.
→ The execution and resource utilization costs are predetermined in Ethereum in terms
of Gas units, called gwei.

4.​ Ethereum Accounts (EOA & its’ types)

→ Ethereum accounts are similar to bank accounts but specifically for holding and
TH) and interacting with smart contracts. They are entities on the Ethereum network
identified by an Ethereum address and secured by a private key. The Ethereum address
is derived from the public key.
→ Types of Ethereum Accounts:
A)​ Externally Owned Account (EOA):
→ Control: Governed by private keys, giving the owner direct control over the account.
→ Key Pair: Each EOA has a unique public-private key pair. The public key allows
others to send Ether to the account, while the private key is used to authorize
transactions.
→ Transaction Initiation: Users utilize their private keys to create and digitally sign
transactions, sending Ether or triggering interactions with contract accounts.
→ Advantages: Transactions from EOAs can initiate the execution of code within
contract accounts, leading to various actions like token transfers or the creation of new
contracts.
→ Disadvantages: EOAs cannot inherently list incoming transactions.

B)​ Contract Account (CA):

→ Control: Governed by the code stored within the account itself (smart contracts).
→ Ether Balance: Each contract account can hold an Ether balance.
→ Activation: The contract code automatically executes whenever the account receives
a transaction from an EOA or a message from another contract account.
→ Functionality: Upon activation, contract code can read and write to its local
storage, send messages to other accounts, and even create new contracts.
→ Types:
-​ Simple Account: Created and owned by a single account holder.
-​ Multisig (Multisignature) Account: Owned by multiple accounts, requiring a
defined number of signatures to authorize transactions.

→ Advantages: Track incoming transactions. Can be Multisig for better security.

Multisig can have spending limits needing multiple approvals only for large amounts.

→ Disadvantages: Cost gas to create due to network resource use. Can't start
transactions themselves; need to be triggered by EOAs or other contracts.

5.​ Nonce
→ The nonce in an Ethereum account indicated the account. number of transactions
that have been sent from that. This ensures that each transaction is made only once by
taking count every time it takes place.
→ For EOAs, nonce means the he number of transactions via this account.
→ For CA, nonce means the number of contracts generated via this account.

6.​ Storage Root

→ It is the main root node of a Merkle tree. Hash of all details of the account is stored
here. The root of the Merkle tree is the verification of all transactions.

7.​ Ethhash
→ PoW algorithm for Ethereum 1.0. The most recent version of Dagger-Hashimoto.

8.​ Transactions → Don’t know what to add here!

9.​ Ethereum Virtual Machine (EVM)

🛞Ethereum ka architecture

→ The Ethereum architecture can be understood as a decentralized, peer-to-peer

(P2P) network of Ethereum clients, which are software implementations acting as
network nodes. These clients are the backbone, responsible for verifying transactions,
executing smart contracts within the Ethereum Virtual Machine (EVM), and processing
new blocks to maintain the blockchain. The EVM is the runtime environment distributed
across thousands of computers globally, connected via Ethereum's P2P network.

Key Components and Concepts:

1.​ Ethereum Clients: Software that runs on nodes, implementing the rules defined
in the Ethereum Yellow Paper. Various implementations exist (written in different
programming languages). These clients often provide web3 APIs (over
JSON-RPC) that Decentralized Applications (DApps) use to interact with the
Ethereum blockchain.
2.​ Ethereum Virtual Machine (EVM): The core execution environment for smart
contracts within the Ethereum network. It's like a global, decentralized computer
where smart contract code is run.
 3.​ P2P Network: The underlying communication layer connecting all Ethereum
clients, enabling them to share data and reach consensus on the state of the
blockchain.
4.​ Nodes: Individual computers running Ethereum client software, participating in
the network by verifying transactions, executing smart contracts, and
maintaining a copy of the blockchain.
5.​ DApps (Decentralized Applications): Applications or services built on the
Ethereum blockchain, enabling direct interaction between users and providers
without intermediaries. They typically involve a decentralized backend (smart
contracts on the blockchain) and a centralized frontend for user interaction.
DApps often utilize cryptographic tokens.
6.​ Web3.js: A JavaScript library used by web or wallet applications to communicate
with the Ethereum network. It acts as a bridge to any Ethereum client by making
RPC calls to a local or remote node.

Core Functionalities Managed by Ethereum Clients:

→ Managing transaction and state transitions on the blockchain.
→ Maintaining the global "world state" and individual account states.
→ Handling P2P communication between nodes.
→ Achieving block finalization through mining (Proof-of-Work, though transitioning to
Proof-of-Stake).
→ Managing the pool of pending transactions.
→ Handling crypto assets (Ether and tokens), gas, and transaction fees.

🏗️ Working of Ethereum
→ Ethereum implements an execution env called Ethereum Virtual Machine (EVM).
1.​ When a transaction triggers a smart contract all the nodes of the network will
execute every instruction.
2.​ All the nodes will run EVM for block verification, where the nodes will go through
the transactions listed in the block and runs the code as triggered by the
transaction in the EVM.
3.​ All the nodes on the network must perform the same calculations for keeping
their ledgers in sync.
4.​ Every transaction must include:
-​ Gas limit.
-​ Transaction Fee that the sender is willing to pay for the transaction.
5.​ If total amount of gas needed to process the transaction < = the gas limit then
the transaction will be processed if the total amount of the gas > the gas limit
then the transaction will not be processed and the fees are still lost.

Thus it is safe to send transactions with the gas limit above the estimate to increase the
chances of getting it processed.

🛜Ethereum Networks ​
→ Ethereum networks are interconnected computer systems utilizing the Ethereum
protocol. While there's one primary Ethereum Mainnet for real-value transactions,
independent networks can be created for testing and development.
→ Private Network: An Ethereum network is a private network if its nodes are not
connected to a public network (i.e. Mainnet or a testnet). Private only means reserved
or isolated, rather than protected or secure.
→ Development networks: To develop an Ethereum application, run it on a private
network to see how it works before deploying. Create a local blockchain instance to test
your dapp. This allows for much faster iteration than a public testnet.
→ Consortium networks: The consensus process is controlled by a pre-defined set of
nodes that are trusted. For example :
-​ Private network of known academic institutions that each govern a single node.
-​ Blocks are validated by a threshold of signatories within the network.

Ethereum Wallets

🧪 Ethereum Testnets
1.​ Sepolia
→ Recommended default testnet for application development. Features :
-​ Closed validator set, controlled by client & testing teams
-​ New testnet, less applications deployed than other testnets.
-​ Fast to sync and running a node requires minimal disk space

2.​ Goerli (long-term support)

→ The Goerli testnet is deprecated and is replaced by Holesovice. Features :
-​ Open validator set, stakers can test network upgrades
-​ Large state, useful for testing complex smart contract interactions
-​ Longer to sync and requires more storage to run a node

→ Smart Contracts - Intro | Working | Lifecycle | Types | Risks.

📜Smart Contracts
🤔How Smart Contracts Work?

1.​ Identify Agreement: Multiple parties identify the cooperative opportunity and
desired outcomes and agreements could include business processes, asset
swaps, etc.
2.​ Set conditions: Smart contracts could be initiated by parties themselves or
when certain conditions are met like financial market indices, events like GPS
locations, etc.
3.​ Code business logic: A computer program is written that will be executed
automatically when the conditional parameters are met.
4.​ Encryption and blockchain technology: Encryption provides secure
authentication and transfer of messages between parties relating to smart
contracts.
5.​ Execution and processing: In blockchain iteration, whenever consensus is
reached between the parties regarding authentication and verification then the
code is executed and the outcomes are memorialized for compliance and
verification.
6.​ Network updates: After smart contracts are executed, all the nodes on the
network update their ledger to reflect the new state. Once the record is posted
and verified on the blockchain network, it cannot be modified, it is in append
mode only.
🧬Lifecycle of Smart Contracts

1. Creation Phase: This is like the initial agreement and building stage for a regular
contract. First, everyone involved needs to decide what the smart contract will do. Then,
the technical work begins: designing how the smart contract will function, writing the
actual code, and testing it to make sure it works correctly.

2. Freeze Phase: Before a smart contract can really do its job on the blockchain, it
needs to be validated. This is done by a network of computers called nodes, often
referred to as miners.

3. Execution Phase: Once a smart contract is live, network computers read its rules.
Special checks ensure it's real and unchanged. When someone gives the required input
(often crypto), the contract's code runs automatically, creating new transactions and
updating the contract's status on the blockchain, which is then confirmed by the
network.

4. Finalize Phase: After the smart contract has been executed and new transactions
have occurred, these results and the updated status are officially recorded on the
blockchain and confirmed as valid through the network's agreement process.

🌀Types of Smart Contract

1.​ Smart Legal Contracts:
-​ Legally enforceable.
-​ Require the parties to fulfill their contractual obligations.
-​ Failure to do so may result in strict legal actions against them.

2.​ Decentralized Autonomous Organizations (DAO)

-​ These are blockchain communities that are bound to specific rules coded into
blockchain contracts combined with governance mechanisms.
-​ Any action taken by the community members gets replaced by a self-enforcing
code.

3.​ Application Logic Contracts (ALC)

 -​ Contains an application-based code that remains in sync with other blockchain
contracts.
-​ It enables communication across different devices, such as the merger of the
Internet of Things with blockchain technology.

⛔ Risks of Smart Contracts

→ Coding Errors: Smart contracts are only as good as the code written to create them.
→ Regulatory Uncertainty: The legal and regulatory framework for smart contracts
varies by jurisdiction. The lack of clarity in some areas can lead to legal challenges or
compliance issues.
→ Irreversible Transactions: Once a smart contract is deployed, its actions are
irreversible. If there's a mistake or dispute, it can be challenging to resolve without
external intervention.
→ Oracles and External Data: Smart contracts often rely on external data sources
(oracles) to trigger actions. If these sources provide incorrect or manipulated data, it
can lead to undesirable outcomes.
→ Scalability: Blockchain networks, especially Ethereum, face scalability challenges,
resulting in slow transaction times and high fees during periods of high demand.
→ Privacy Concerns: While blockchain provides transparency, it may not be suitable
for contracts that require complete privacy or confidentiality.
→ Human Element: Smart contracts can't account for all real-world scenarios. Human
intervention may still be needed for complex negotiations or unforeseen circumstances.
→ Upgrades and Forks: Blockchain networks can undergo upgrades or forks,
potentially impacting the functionality or compatibility of smart contracts.
→ Cost of Deployment: Deploying smart contracts on some blockchain networks can
be costly due to gas fees (transaction costs) and development expenses.

😷 Metamask
→ STO Metamask - Security Token Offerings using Metamask (Similar to ICO) is a
free crypto wallet software that people can use to interact in the crypto world.
→ And it is free to use and can be installed as an extension on internet browsers,
Google Chrome, Firefox, Brave, and Edge, or downloaded as a smartphone application
both on iOS and Android.
→ With over 30 million users, MetaMask is one of the most popular cryptocurrency
wallets today. used for managing Ethereum and Ethereum-based tokens.
→ Metamask allows users to:
○ Buy, receive, send and swap Ether, the main token on Ethereum.
○ Buy, receive, send and swap nonfungible tokens (NFTs) in marketplaces.
○ Connect to Ethereum dapps.
○ Connect to other crypto wallets.

→ Adnvantages: Nice UI, Security, Cross-platform, DApp Integration, Privacy,

Community Support.

→ Disadvantages: Limited to ETH, Txn fees, Learning Curve, Centralization Problems,

Lack of Customer Supprt.
🤔 How to setup Metamask?

🐢 Truffle
🧋 Remix IDE

➰ Turing completeness of Ethereum

→ Turing completeness is a concept from computer science, related to the theoretical
ability of a machine to perform arbitrary computations. Essentially, a system that's
"Turing complete" can be programmed to solve any problem that any other computer
can solve, given enough time and memory.
→ Ethereum is considered Turing complete because it uses the Ethereum Virtual
Machine (EVM) to execute code. The EVM can run a stored program and interact with
data, which gives Ethereum this capability.
→ However, there's a catch: Turing-complete systems can run into infinite loops, which
would cause problems on a blockchain by wasting resources. To prevent this, Ethereum
uses a "gas" mechanism to limit the amount of computation a transaction can use.
 MODULE 4 - Sharmila/Mamas’ BC: Hyperledger Fabric
🚪About Hyperledger
→ Hyperledger is a toolbox of open-source technologies that helps businesses build
their own secure and private blockchain networks for things like tracking goods,
managing supply chains, or sharing data with partners.
→ Something similar to a set of standard LEGO bricks designed for companies to build
their own custom blockchain solutions.

→ Key things to know about Hyperledger:

1.​ Open Source: It's like a shared project where many people can contribute and
use the code for free.
2.​ Enterprise-Focused: It's designed for businesses and organizations, not just for
cryptocurrencies.
3.​ Modular: It's made up of different parts (like building blocks) that developers
can choose and combine to create a blockchain that fits their specific needs.
4.​ Secure: Security is a top priority, especially for handling sensitive business data.
5.​ Cryptocurrency Agnostic: Hyperledger focuses on the blockchain technology
itself and doesn't force you to use any specific cryptocurrency.
6.​ Easy to Use (Designed to Be): Hyperledger projects provide tools and support
to make it easier for developers to build and use their blockchain systems.
©️Hyperledger Fabric Key Components
1. Membership Service Providers (MSP) → Princi of college, maybe :)
→ Members of a Hyperledger Fabric network enroll through a trusted Membership
Service Provider (MSP). Trust can be handled through the use of permissionless and
permissioned blockchains.
→ Most cryptocurrencies use permissionless blockchains where anyone can join and
have full rights to use it. E.g. anyone can buy BTC or ETH because those use wide-open,
permissionless blockchains.
→ On the other hand, business blockchains tend to be permissioned. Others allow
anyone to join, but only let trusted identities verify transactions on the blockchain.
→ Hyperledger Fabric network has different actors (e.g. peers, orderers, client
applications, and administrators) that can consume services.
→ Each actor has a digital identity encapsulated in an X.509 digital certificate
(explained below). These identities determine the exact permissions over resources
and access to information.
→ An MSP (Membership Service provider) can identify roles an actor might play and
sets the access privileges in the context of a network and channel.

🗝️
@component 1
About Certificate Authority (CA): Your Digital Identity Manager.
Hyperledger Fabric provides a built-in CA component to allow CAs to be created. The
default MSP implementation uses X.509 certificates as identities, adopting a
traditional Public Key Infrastructure (PKI). With these functionalities -
-​ Every Member Gets an ID: Fabric CAs give digital certificates (like online IDs)
to organizations, users, and even the computers (peers) on the network.
-​ Verifying Identities: When someone tries to do something on the blockchain,
their digital certificate is checked by the CA to make sure they have permission.
-​ Managing Permissions: The CA also helps manage what different members are
allowed to do on the network (their roles and permissions).
-​ Keeping Things Anonymous (if needed): Fabric can use special techniques so
that while transactions are verified, the actual person or organization doing
them can remain somewhat anonymous within the network.

2. Ledger:
→ The ledger is a combination of the world state database and the transaction log
history. Each participant has a copy of the ledger to every Hyperledger Fabric network
they belong to.
→ The world state describes the state of the ledger at a given point in time. The
transaction log records all transactions which have resulted in the current value of
the world state.

@component 2
⏺️Nodes: The Workers of the Network
→ Nodes are the computers that keep the blockchain running. There are 3 types of
workers with different jobs – Client | Ordering Service | Peers
A.​ Client: Your computer or application that wants to do something on the
blockchain (like send a transaction). It talks to the ordering service.
B.​ Ordering Service: Special nodes are like the traffic controller. Takes all txns,
puts them in the correct order (into blocks), and sends these blocks to the peers.
PEERS are THE “W-Nodes”

→ Peers are the workhorse computers in the Hyperledger Fabric network. Think of
them as the ones who actually run the business logic and keep track of everything.
→ A peer can host multiple ledgers and each ledger can have one or more chaincodes
applicable to it.
→ Peers are responsible for executing the "smart contracts" (the rules) and also for
storing a copy of the blockchain's history (the ledger). A peer that joins a "channel" (a
private group) gets access to all the transaction history within that specific channel.
→ To make sure everyone agrees on transactions, there are two special roles a peer
can take on -
1.​ Endorser Peer: This peer's job is to pretend to run the transaction based on the
smart contract. It checks if the transaction is valid according to the rules and
then gives its "okay" (an endorsement). It doesn't actually update the blockchain
yet. Think of it as a preliminary check and signature.
2.​ Committer Peer: This peer receives the endorsed transactions from a special
"ordering service" (which puts them in the right order). The committer peer then
does a final check to make sure everything is still valid and then it finally adds
(commits) the transaction to its local copy of the blockchain and updates the
current state of the data.

@component 3
🔗 Chaincode: The Smart Contracts
→ Chaincode is like the set of rules or the "smart programs" that run on the blockchain.
-​ Automating Agreements: It defines how transactions should be processed and
what happens when certain conditions are met.
-​ Living on the Peers: Chaincode is installed and run on the peer nodes.
-​ Different Kinds: There are two main types:
A.​ System Chaincode: Built-in code that manages the basic workings of the
blockchain itself.
B.​ Application Chaincode: The custom smart contracts that businesses
write to handle their specific needs and logic (like transferring assets or
managing agreements).
@component 4
🛅 Consensus: Solo, Kafka, Raft (Ordering Service Implementations)
→ In distributed ledger technology, consensus has recently become synonymous with
a specific algorithm, within a single function. However, consensus encompasses more
and this differentiation is highlighted in Hyperledger Fabric through its fundamental
role in the entire transaction flow:
●​ Proposal
●​ Endorsement
●​ Ordering
●​ Validation
●​ Commitment
→ Solo: Simple, for development or testing. Only one ordering node.
→ Kafka: More robust, uses a technology called Kafka for better performance and
reliability in production.
→ Raft: Another robust method that's becoming popular for production networks,
known for its agreement mechanism.

🏗️ Hyperledger Architecture

🧷Need of interoperability
→ Imagine different computer systems that can't share information – it would be a
mess! The same problem exists with blockchains. Blockchain interoperability is about
making different blockchains able to communicate and exchange data and value
with each other smoothly.
→ The few key reasons:
1. Data Privacy: Different types of data need to be kept separate and shared only
with the right people. Interoperability solutions can help manage how different
blockchains share specific data while keeping other data private.
2. Data Security: Blockchains have different security methods. Interoperability needs
to ensure that when data moves between blockchains, it remains secure and isn't
vulnerable.
3. Lack of Standardization: Right now, there's no single standard way for
blockchains to talk to each other. This makes it difficult and costly for companies to
build applications that work across multiple blockchains. Interoperability solutions aim
to create these standards.
4. Solving Real-World Problems: Many real-world problems require different types of
data and functionalities that might exist on separate, specialized blockchains.
Interoperability can connect these blockchains to create more powerful and useful
applications (like for supply chains or cross-border payments).
5. Avoiding "Data Silos": Without interoperability, each blockchain becomes a
separate "silo" of information, unable to easily connect with others. This limits the
potential of the technology.

→ In simple terms, we need blockchain interoperability so that different blockchains

can work together, share information securely, and allow for new and more powerful
applications that solve real-world problems without being limited to a single
blockchain. It's like making sure all the different apps on your phone can talk to each
other and share data when needed.

🌿HYPERLEDGER(s)
Hyperledger provides a range of modular blockchain frameworks, each designed to
meet specific enterprise use cases. Notable frameworks include:
→ Hyperledger Fabric: A permissioned blockchain framework with a modular
architecture, supporting plug-and-play components for consensus algorithms,
membership services, and more.
→ Hyperledger Sawtooth: A modular and scalable framework with a unique consensus
algorithm called Proof of Elapsed Time (PoET).
→ Hyperledger Besu: An Ethereum-compatible client designed for enterprise use
within the Hyperledger consortium.
→ Hyperledger Indy: Focused on decentralized identity, enabling the creation of
self-sovereign identities.

RAFT, Kafka
DApp ARCHITECURE
 MODULE 5 - Cryptos’ Ass & Currency
🤔What are Tokens?
→ Tokens are build on existing BC, while coins are build on their own NATIVE BC.
→ Tokens may perform the functions of digital asset, e.g. a company’s share.
→ Tokens have certain use case but only inside certain project. Creating a token is
easier than creating a coin - no need to create a new code, only need to modify
already existing code ( you just use a standard template from platforms like Ethereum)

→ Tokens can be used for payment but the main difference is that it gives the
holder a right to participate in the network.

→ A token, has extended functionality that goes beyond money:

1. Security tokens : Most tokens that are issued in Initial Coin Offerings (ICOs) fall into
the category of security tokens. They do not have a particular utility and are
subsequently better candidates for regulation.
2. Equity tokens: If a token represents an amount of stock or equity in a given
company, it is referred to as an equity token. Few companies have opted for an ICO of
this kind due to the lack of regulatory guidance on the matter.
3. Utility tokens: Utility tokens or application tokens which grant access to products
or services to the users.
4. Payment tokens: The sole purpose of payment tokens is to pay for goods and
services.
NOTE: A token may fall into more than one of the above-listed categories. A security
token, for instance, may also have the functionality of a utility token.
EXAMPLE - BTC, USDC, USDT, DAI, etc.

🪙COINS!
→ Coins (often called altcoins) are digital money, created using encryption
techniques, that store value over time. They are tied to public-open blockchain. They
may be sent, received, or mined (PoW/PoS).
→ Coins cannot perform any functions beyond acting as money. CHARACTERISTICS:
- Fungibility: MT one unit is equal to another.
- Divisibility: MT each unit can be divided into smaller units.
- Acceptability: MT the cryptocurrency is widely accepted as a medium of exchange.
- Limited supply: MT the total number of units is capped and constant.
- Uniformity: MT all versions of a given denomination share the same value.
- Portability: MT units can be transferred and exchanged.
- Durability: MT units can be used multiple times without losing value.
→ EXAMPLE - Bitcoin, Ethereum, etc.
🧱Difference between Coins & Tokens

🤔What is ERC?
- ERC stands for ‘Ethernet Request for Comments’ and its’ primary function is to
provide functionality to Ethereum with a set of guidelines for Ethereum Token Creation.
- Ethereum as a big platform is used for building digital stuff. To make sure all the
different digital things (i.e. tokens) work together nicely on this platform, there are
standard rules. These rules are called ERC standards.
💱Fungible Tokens it is!
→ Digital assets that can be exchanged for other assets of the same type are known as
fungible tokens. There is no unit with a higher or lower value than another. Consider
how a dollar bill is comparable to another and interchangeable.

ERC-20 Tokens
→ The ERC-20 (Ethereum Request for Comments 20), proposed by Fabian Vogelsteller
in November 2015, is a Token Standard that implements an API for tokens within
Smart Contracts.
→ It will be responsible to keep track of the created tokens on Ethereum.
→ It is the technical standard/guideline for fungible tokens created using the Ethereum
blockchain. So it allows developers to create smart-contract-enabled tokens that can
be used with other products and services.
→ For example functionalities ERC-20 provides:
-​ transfer tokens from one account to another.
-​ get the current token balance of an account.
-​ get the total supply of the token available on the network.
-​ approve whether an amount of token from an account can be spent by a
third-party account.

General Steps to Create an ERC20 Token

1. Set up a Development Environment: You'll need tools like Node.js, npm (or yarn),
and a development framework like Truffle or Hardhat. These help you write, compile,
and deploy your smart contract. A local blockchain environment like Ganache is useful
for testing.

2. Write the Smart Contract: Use the Solidity programming language to write the
ERC20 token's smart contract. This contract must implement the functions defined in
the ERC20 standard:
-​ totalSupply(): Returns the total number of tokens.
-​ balanceOf(address _owner): Returns the balance of a specific address.
-​ transfer(address _to, uint256 _value): Transfers tokens to another address.
-​ transferFrom(address _from, address _to, uint256 _value): Transfers tokens
on behalf of another address (requires approval).
-​ approve(address _spender, uint256 _value): Allows another address to spend a
certain amount of tokens.
-​ allowance(address _owner, address _spender): Returns the amount of tokens
an address is allowed to spend on behalf of another.

3. Compile the Smart Contract: Use the Solidity compiler to turn your code into
bytecode, which the Ethereum Virtual Machine (EVM) can understand.
4. Deploy the Smart Contract: Use a tool like Truffle or Hardhat to deploy your
compiled contract to an Ethereum network (either a test network or the main network).
This involves paying a transaction fee ("gas") in Ether.
5. Interact with the Token:
Once deployed, you can interact with your token using Ethereum wallets, blockchain
explorers, or web applications. You can transfer tokens, check balances, and so on.

💰 Non-Fungible Tokens!
→ Each NFT is associated with a unique identifier. And its’ key features are -
ERC-721 Tokens
→ The initial ERC-721 specification was proposed as an Ethereum Improvement
Proposal (EIP), which is a process for introducing new standards to Ethereum, in
January 2018. Now, ERC-721 tokens are the standards for non-fungible tokens.
→ Characteristics -
1.​ These tokens cannot be exchanged for anything of equal value since they are
unique in themselves, representing a unique asset.
2.​ Each NFT token is linked to different owners and has its own tokenID or
metadata that makes them unique.
3.​ The most popular application areas of ERC-721 tokens are NFTs in gaming ( such
as cryptokitties).
→ The assets bought with a non-fungible token are unique and only belong to the
owner. It can’t be traded. It’s like a property that one owns (a house).
→ Some important methods:
1.​ balanceOf(owner): Essential for knowing how many NFTs someone has.
2.​ ownerOf(tokenId): Crucial for determining who owns a specific NFT.
3.​ safeTransferFrom(from, to, tokenId): The standard and recommended way to
transfer NFTs securely.
4.​ transferFrom(from, to, tokenId): The basic (but less safe) way to transfer NFTs.
5.​ approve(approved, tokenId): Allows temporary permission for someone else to
transfer a specific NFT.
→ EXAMPLES: Ethermon, MyCrypto, Cryptodoggies, etc.

🧱Difference between..
👛Initial Coin Offering (ICO)
→ In the cryptocurrency and blockchain environment, a type of capital-raising
activity is called an Initial Coin Offering (ICO), somewhat similar to IPO. However,
there are significant distinctions between the two fundraising activities, so it is not the
most accurate comparison.
→ An ICO is mostly used by startups to raise money. ICOs eliminate middlemen from
the capital raising process and establish direct connections between businesses and
investors is their primary advantage.
→ Primarily there are 2 types:
1.​ Private ICO: Only a small number of investors can participate in private initial
coin offerings. Private ICOs typically only allow accredited
investors—high-net-worth individuals and financial institutions to participate,
and a company may choose to establish a minimum investment amount.
2.​ Public ICO: This is like crowdfunding for crypto. Anyone can invest, even with
small amounts. It's more open than private ICOs but has more government rules.
🤔 How Does an ICO Work?

1)​ Identification of Investment Targets: Startups explain their project and why
they need money. They share important info to attract investors.
2)​ Token Creation: The startup creates digital tokens on a blockchain (like
Ethereum). These tokens can be bought and sold. Owning tokens often gives
investors a stake in the project. Creating these tokens usually doesn't require
complex coding if using existing blockchains.
3)​ Promotional Campaign: Startups advertise their ICO online to reach many
potential investors. They use platforms like Facebook and Google (though
sometimes crypto ads are restricted).
4)​ Initial Offering: Tokens are sold to investors in rounds. Early investors might get
better prices. The price and number of tokens can be fixed or change based on
how much money is raised. Sometimes there's a limit on how many tokens are
sold.

→ Advantages: You might get good returns if the project succeeds, especially if you
buy early. Anyone can invest, not just the wealthy. Startups can raise money quickly
and easily.
→ Drawbacks: There's a big risk of losing money if the project fails or is a scam. The
rules around ICOs are often unclear. Scams are common, so it's hard to know who to
trust if you're new to crypto.
📑Case Study of ICO

A creator generated a digital token (S-token) to raise capital through an ICO. This
capital was used to develop an amusement park. The S-token then gained utility within
the amusement park, allowing customers to purchase access to rides, potentially at a
higher value than the initial ICO price.

🪪 Security Token Offerings (STO)

→ An STO is a regulated, digital way to invest in real-world assets using blockchain
technology. Essentially, STOs involve selling digital shares or ownership in tangible
assets, such as a company or property, through the blockchain. These digital shares are
known as security tokens.
→ Key Points about STOs:
1.​ Represent Real Assets: STOs aren't just creating a new digital currency; they link
the tokens to actual investments that have value, like stocks or bonds.
2.​ Subject to Rules: Because they represent real investments, STOs have to follow
the same legal and financial rules as traditional stock markets. This means more
regulations compared to ICOs.
3.​ Investor Protection: These regulations are there to protect investors.
4.​ Rise After ICO Bubble: STOs became more popular after the initial excitement
(and problems) with ICOs. Governments started paying closer attention and
setting rules, leading to the growth of STOs as a more regulated way to raise
money.
5.​ Bridge Traditional Finance: STOs aim to bring the benefits of blockchain (like
easier trading and access) to traditional financial assets.

TYPES:
1. Equity Tokens: Digital Shares (ownership in a company)
→ Owning an equity token can give you rights similar to owning traditional stock, such
as a share of the company's profits (dividends) and voting rights in company decisions.
→ The ownership is usually recorded on a secure, unchangeable digital ledger (the
blockchain).
→ Equity tokens aim to improve transparency and make it easier to manage and trade
ownership compared to traditional paper-based shares.
2. Debt Tokens: Digital Loans (you lend money and get interest)
→ When you invest in a debt token, you're essentially lending money to a company or
project. The token represents a debt that will be repaid over time with interest.
→ Examples of underlying assets could be corporate bonds, real estate mortgages, or
other forms of debt.
→ Factors like "risk" and the expected "dividend" (interest payment) determine the
price of a debt token.

3. Asset-Backed Tokens: Digital Ownership of Stuff (like piece of a house/gold bar)

→ These tokens represent ownership in a real-world asset, but not necessarily a share in
a company (like equity tokens) or a loan (like debt tokens).
→ The value of the token is tied directly to the value of the underlying asset.
→ Examples could include tokens representing ownership in real estate, commodities
like gold, or even art. This allows for fractional ownership of expensive assets

🧱Difference between ICO and STO

🔝 Top 6 CRYPTOCURRENCIES
🔝
Major CRYPTOCURRENCIES
 MODULE 6 - Blockchain Applications
🤔Why BC not in IoT?

☺️Benefits of BC in IoT!
- Data decentralized: Currently data can be hacked, so storing in BC will avoid that.
- Enhanced Privacy: BC hides the connection between devices communicating,
offering transaction validation with 3rd party implementations.
- Better Automation Process: Data analysis and some actions can be automated.
- Collaborative env for shared economy: A secured hub for like similar business from
different regions can come and collaborate.
- Enhanced Scaling: Decentralized BC nodes share the workload, since there are many
nodes in BC scaling can be very efficient.

🔐BC in Cybersecurity!
→ CIA Triad ko bhi implement kar dega humara BC, kyu nhi! BC hai tho sab kuch done.
PROS CONS

-​ User Confidentiality. -​ Reliance on Private Keys.

-​ Data Transparent. -​ Adaptability issues.
-​ Secure data management. -​ Lack of governance.
-​ No single point of failure. -​ Operational Costs.
-​ Safe data transfers. -​ BC learning curve.
🤖 BC in AI
> Smart Computing Power: Blockchain lets many computers team up to solve tough
problems by trying everything. AI is the smart teammate who figures out the best way
to solve them faster.
> Creating Diverse Data Sets: Blockchain is like a shared library of info from all over.
AI connected to it can learn a lot more from different sources
> Data Protection: Blockchain makes info super secure. AI learning from it gets better
at keeping your data safe because it's spread out and harder to hack.
> Data Monetization: Right now, big companies make a lot of money by collecting and
using our information. But when you mix blockchain and AI, it could let you have more
control over your own info and maybe even get paid for it.