Home Blockchain Blockchain DIY. Carsten Moenning, Ph.D. & Waldemar… | by Technoids Weblog | Jul, 2022 – DataDrivenInvestor

Blockchain DIY. Carsten Moenning, Ph.D. & Waldemar… | by Technoids Weblog | Jul, 2022 – DataDrivenInvestor

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Carsten Moenning, Ph.D. & Waldemar Schiller

Picture by Marvin Meyer on unsplash.com

This two-post weblog sequence will method the notion of blockchain by first rules. By following alongside, you’ll find yourself with constructing your very personal, easy blockchain from the bottom up. The contents of this primary put up appears as follows:

Part 1) Motivation
Part 2)
Blockchain-related terminology and core concepts
Part 3)
Basic blockchain implementation and web app

The second and last put up can be coping with extending the essential blockchain implementation of this primary put up by some extra superior performance corresponding to mining awards based mostly on our personal native cryptocurrency, the “BeCoin”, and transaction processing throughout a multi-node setup.

To get essentially the most out of those weblog posts, you must have:

  • intermediate Python information, together with fundamental information of object-oriented software program engineering ideas
  • fundamental familarity with net software frameworks corresponding to Flask
  • fundamental familarity with HTTP shoppers corresponding to Postman

Readers, who’re already conversant in core blockchain ideas and are primarily enthusiastic about their implementation, would possibly wish to skip the following two sections and bounce proper to the implementation part.

For all others, let’s begin with some motivation and background.


Though the concepts that are on the core of blockchains had been round because the early Nineties [1], blockchain solely actually began to get the tech group’s consideration with the publication of the Bitcoin White Paper [2] in response to the 2007–2008 monetary disaster. At its coronary heart, the paper targetted the centralized nature of the normal monetary system within the perception {that a} strictly decentralized, trustless value-transfer system accessible virtually free-of-charge wouldn’t as simply fall prey to the shady dealings, which brought about the 2007–2008 monetary disaster.

The Ethereum White [3] and Yellow Paper [4], respectively, prolonged the single-application objective expressed within the Bitcoin White Paper by including general-purpose program execution capabilities and, with it, the thought of sensible contracts to the blockchain.

Ever since these landmark publications and subsequent implementations of the Bitcoin and Ethereum blockchains, the blockchain notion has undergone its justifiable share of winter time: First time spherical across the 2018 mark, solely to start out transferring up the hype cycle once more as of 2020/21, hitting an all-time excessive with the late 2021/early 2022 NFT growth. On the time of writing in July 2022, it’s firmly again in bear market territory so far as the valuations of (the blockchain-based) cryptocurrencies are involved.

The worldwide developer group on the coronary heart of blockchain growth and progress, nevertheless, has remained sturdy and prolific all through, not being overly involved about any public misgivings and wildly fluctuating cryptocurrency valuations.

Speaking of public notion, blockchain has skilled a great deal of controversy and criticism. There’s the big power consumption of proof-of-work blockchains. There are seemingly infinite, typically idealistic blockchain group debates on the easiest way ahead, that are inscrutable to most people and are slowing down badly wanted technological progress. There’s a regular stream of unhealthy press resulting from crypto-related scams, Ponzi schemes, ransomware assaults and the like.

A number of this criticism could be attributed to misconceptions and a easy lack of expertise of the blockchain fundamentals. Additionally, regardless of wildly swinging cryptocurrency valuations, hype cycles, unhealthy press and the like, there appears to be this nagging feeling by numerous observers that there’s something actually modern, and probably disruptive to the underlying assortment of blockchain-related applied sciences, which deserves to be understood extra totally and from the bottom up.

And what higher method is there than to start out from first rules and to implement one’s very personal blockchain? So, that’s precisely what we’re going to do, i.e. blockchain DIY. Let’s undergo some blockchain-related terminology and core ideas subsequent.

Blockchain-related terminology and core ideas

A blockchain could be outlined as a cryptographically linked chain of knowledge blocks holding transaction knowledge in a tamper-resident and tamper-evident, distributed, decentralized, trustless trend. I.e., it’s designed from the bottom as much as be a belief community changing the necessity to “trusted” central authorities or intermediaries by expertise with belief built-in by design. It’s not designed, and thus not meant to be, an ideal database.

A sensible contract is code (“features”) and knowledge (“state”) deployed utilizing cryptographically signed transactions on a sensible contract-supporting blockchain. It’s executed by nodes throughout the blockchain community when sure circumstances are met and the outcomes are recorded on the blockchain supplied all nodes agree on these outcomes. Be aware {that a} blockchain doesn’t essentially help sensible contract performance. A living proof is the native Bitcoin blockchain protocol.

The ideas enabling the decentralized trustlessness on the coronary heart of blockchains are, specifically, cryptographic hash features (“hash cryptography”), distributed, peer-to-peer networking with (block) mining and consensus protocols.

A hash operate maps an enter of arbitrary dimension to an output of mounted size, the so-called hash worth, or just hash. A cryptographic hash operate moreover has the next properties:

  • It’s deterministic and non-reversible, i.e. the (mounted dimension) hash worth follows deterministically from the (arbitrarily sized) enter knowledge, however not the opposite method spherical,
  • quick to compute,
  • moderately collision-resistant, i.e. two completely different inputs to the algorithm don’t simply map to the identical hash worth, and
  • options one thing known as the Avalanche effect, i.e., a small change to the algorithm’s enter ends in substantial adjustments to the hash worth thereby “diffusing” any statistically tractable relationship between enter and hash worth.

Cryptographic hash values are at the beginning used to “cryptographically join the chain of knowledge blocks”, which constitutes a blockchain. See beneath for an illustration.

Illustration by the Nationwide Institute of Requirements and Expertise (NIST), https://www.nist.gov/blockchain

So, every block in a blockchain holds:

  • a hash worth referring to the earlier block within the chain, the so-called “earlier hash” constituting the cryptographic connection,
  • a block creation, or “mining”, timestamp,
  • a cryptographic nonce (“quantity as soon as”),
  • the block’s personal hash worth hashing the block’s transaction knowledge and the
  • transaction knowledge itself.

There’s an exception to this: The so-called “genesis block” represents the primary block within the chain, which, by its very nature, doesn’t maintain any hash worth referring to a earlier block. As an alternative, the genesis block’s earlier hash worth is often set to “0”.

For some other block, the earlier hash represents the worth ensuing from hashing the entire earlier block’s header knowledge, as illustrated above. In contrast, a block’s personal hash worth represents the worth ensuing from hashing the block’s transaction knowledge, i.e. the “block knowledge”, solely. Please be aware that this block knowledge hash worth is to not be confused with, and isn’t equal to, the following block’s “earlier hash” worth.

So, what’s the purpose of all of this? Nicely, utilizing hash values to attach the blocks in a series makes the ensuing blockchain successfully tamper-evident and thus tamper-resistant and immutable to a major diploma. It is because any modification of the block header knowledge, i.e. any modification of the block’s earlier hash worth, its timestamp, its nonce and the block knowledge hash worth adjustments the following block’s earlier hash worth, which is computed on the premise of all of those block header values, thereby each making any tampering with the block header knowledge evident and successfully breaking the chain.

Amongst the various cryptographic hash features to select from, we can be utilizing the NIST-standardized SHA-256 algorithm [5]. It maps enter of any dimension to a 64 alphanumeric characters lengthy, hexadecimal hash worth. This may be seen in motion utilizing, for instance, the open source blockchain demo by Anders Brownworth, additionally used to good impact here.

The SHA-256 algorithm has been utilized by Bitcoin since its inception, and, opposite to common notion, can, the truth is, be computed relatively easily using pen and paper.

⚡️ That is already all what is de facto wanted for constructing a blockchain within the unique sense of Haber and Stornetta [1]. The second use of this hashing algorithm is past the cryptographic connectivity objective described above. It’s as a result of want for the injection of trustlessness amongst events that don’t belief one another as popularized within the context of the crypto-related blockchain software by Satoshi Nakamoto [2] making so-called consensus algorithms obligatory. ⚡️

Within the case of Bitcoin, this comes within the type of a cryptographic “proof-of-work” puzzle requiring the generated hash worth to satisfy extra circumstances corresponding to a sure minimal variety of main zeros, i.e., successfully a “trial and error” seek for the “proper” hash worth. On the time of writing, the variety of main zeros, and thus the so-called “(goal) issue stage”, of the Bitcoin block mined last amounted to 19 thereby limiting the legit hash worth vary drastically and making this a very difficult proof-of-work:


Nonetheless, with a block’s timestamp, transaction knowledge and former hash worth predetermined, this leaves the query as to what enter to the SHA-256 algorithm to alter to acquire completely different hash values, one in every of which could in the end fulfill the proof-of-work issue stage. That’s the place the “nonce” worth is available in, the one block worth which isn’t mounted from the outset: It may be modified at will till a legit hash worth output assembly the issue stage corresponding to 19 main zeros has been generated.

⚡️ That is additionally how the blockchain network-wide brute-force, extraordinarily energy-demanding compute competitors for the technology of “proper” nonces, or so-called “Golden Nonces”, and thus legit hash values, comes about – it isn’t as a result of complexity of this second hash computation itself. Be aware, although, {that a} legit hash worth may be exhausting to detect, however that it’s straightforward to confirm in opposition to the goal issue stage. ⚡

This proof-of-work is on the coronary heart of the consensus algorithms utilized by blockchain protocols corresponding to Bitcoin or Ethereum, with Ethereum, after all, being within the transition to a different, much less energy-consuming and extra scalable “consensus layer”, proof-of-stake.

Ethereum roadmap by the Ethereum Basis, “The great renaming: what happened to Eth2?”, Jan. 2022

However, why particularly do we have to hassle with this second hash computation in any respect? Trustlessness as practiced by blockchains corresponding to Bitcoin, Ethereum and the like requires consensus algorithms to deal with the Byzantine Fault Tolerance drawback [6]. Extra particularly, firstly, the query as to tips on how to resolve on the following block to be added to the blockchain that includes distributed miners competing for crypto rewards is to be answered. Secondly, the consensus protocol can also be wanted to reply the query as to tips on how to take care of non permanent instances of inconsistency throughout the blockchain community merely resulting from, for instance, community latency and completely different hash charges by the miners.

Consensus algorithms corresponding to proof-of-work assist handle this drawback by figuring out the quickest miner. That’s, in reply to the primary query the thought is so as to add the block generated first and rewarding its miner with native tokens and a transaction charge within the course of. The second query is answered by the “rule of the longest chain”, i.e., the model of the blockchain successfully exhibiting the quickest hash charge, will at all times be the ultimately agreed-upon blockchain state of issues. For a short abstract of this and various consensus protocols corresponding to proof-of-stake see, for instance, this weblog put up by Amy Castor [7].

Since we’re involved with first rules, we are going to impose a low-level goal issue for the needs of our very personal blockchain implementation and we are going to prohibit ourselves to a simple SHA-256-based hash worth computation. Equally, the usual blockchain validity checks can be saved to a minimal and consensus can be pretty simple.

⚡️ The implementation is meant to be academic in nature and it isn’t appropriate for manufacturing eventualities in any method in any way. Quite, its goal is to encourage you to dig deeper. For production-quality implementations, you could wish to have a better take a look at, for instance, the open supply Bitcoin Core venture. ⚡️

A fundamental blockchain implementation and net app

Let’s begin with some necessities. You could wish to contemplate putting in the Python libraries inside a digital setting devoted to this blockchain pet venture.

  • Postman HTTP consumer v9.24.0: Accessible for obtain here.
  • Flask 2.1.3 library: pip set up Flask==2.1.3
  • requests library: pip set up requests==2.28.1

The Flask library supplies the mandatory net server performance. The requests library makes the dealing with of HTTP requests to work together with our blockchain comparatively simple. The moreover required customary Python modules include:

  • hashlib – Consists of the SHA-256 algorithm
  • datetime – To create a block’s mining timestamp
  • json – HTTP interplay with our blockchain can be in JSON format

We’ll implement a fundamental blockchain class first. The online software for HTTP interactions with an occasion of this class will then be proven subsequent. The implementations are impressed by the Blockchain materials produced by the SuperDataScience staff.

Aside from the usual constructor technique, __init__, the category Blockchain accommodates 4 different strategies. The “create_block” technique does what its identify suggests – it creates a brand new block within the type of a Python dictionary and appends this new block to the blockchain. The dictionary holds the brand new block’s (incrementally growing) index within the chain, its creation, or mining, timestamp, its proof-of-work within the type of the “nonce” factor and the hash of the earlier block, the “previous_hash”, within the chain, if any.

⚡️ As you may need observed, the block doesn’t maintain any transaction knowledge. This doesn’t make the block overly significant, however it doesn’t diminish the academic worth of this train, which is of our major concern at this level. We’ll add transaction knowledge within the second put up. ⚡️

This technique can also be utilized by the constructor technique to provoke the chain with the genesis block and its typical values of 1 for its nonce worth and “0” for its previous_hash worth, respectively. The blockchain, “chain”, itself is represented as a listing of blocks beginning with the genesis block.

The “get_previous_block” technique is equally simple and easily returns the previous block within the checklist.

Blockchain class half

Issues get marginally extra difficult with regards to the proof-of-work implementation. The “proof_of_work” technique units a low-level goal issue of 4 main zeros to maintain issues easy and environment friendly. The hash worth candidates are computed by making use of the SHA-256 implementation of the hashlib module to the distinction between the sq. of the earlier block’s proof-of-work, “previous_nonce”, and the sq. of the block’s candidate nonce worth, “new_nonce”. This computation is a intentionally easy selection for academic functions. The candidate nonce is incremented and this computation is repeated till a hash worth assembly the goal issue stage is obtained. The candidate nonce related to this hash worth, and the nonce solely, is then returned, since it’s all that’s wanted to test the validity of the block.

⚡️ Please be aware that we don’t carry across the legit hash worth inside a newly mined block, however fairly the “previous_hash” worth solely, which, as described above, represents the hashed contents of the earlier block (making our chain tamper-evident/-proof) fairly than any hash worth fixing our cryptographic proof-of-work puzzle. This additionally implies, after all, that the previous_hash worth will not be required, and is certainly unlikely, to exhibit the goal issue stage property of, on this case, 4 main zeros. Keep in mind on this context that the truth that the blocks in our chain meet the required goal issue is checked with the assistance of the is_chain_valid technique, for which the block’s nonce represents the one proof-of-work factor wanted.⚡

This course of can also be the premise for our easy blockchain validity test within the type of the “is_chain_valid” technique. Beginning with the genesis block, the tactic first checks whether or not or not the block’s previous_hash worth has the right hash worth. If that’s the case, the tactic proceeds with checking the block’s nonce for assembly the goal issue stage. These steps are repeated for all the chain. If any of the 2 checks is failed by any specific block within the chain, the method stops and False is returned; in any other case, the blockchain is taken into account legitimate and the boolean worth True is returned.

This completes the essential blockchain design, which by and itself will not be overly thrilling, since we are able to’t actually work together with the blockchain simply but.

To have the ability to work together with an occasion of our Blockchain class, we now transfer on to implementing a Flask net server responding to quite a lot of HTTP GET requests.

⚡️ Please be aware that for Flask efficiency causes, you would possibly wish to set the configuration parameter JSONIFY_PRETTYPRINT_REGULAR to False. ⚡️

The precise net software half begins with instantiating our blockchain class. That is adopted by the definition of the “mine_block” endpoint, which makes use of the thing’s “proof_of_work” and “create_block” technique, respectively, to unravel our cryptographic puzzle, to acquire the corresponding nonce and to then create a brand new block with the related parameters. The profitable completion of this course of is communicated to the HTTP consumer by way of a corresponding JSON payload.

Net software half

The “get_chain” endpoint merely jsonifies the blockchain checklist and its size and returns this payload to the HTTP consumer.

The “is_valid” endpoint calls the “is_chain_valid” technique, jsonifies its return worth and returns this payload to the HTTP consumer.

To complete issues off, the Flask net server is launched on port 5000, in order that issues turn into far more attention-grabbing now:

For instance, utilizing the Postman HTTP consumer, calling the “get_chain” endpoint ought to produce one thing much like the output proven beneath, i.e., your very first genesis block.

get_chain outcome for the genesis block

With the assistance of some calls of the “mine_block” endpoint, your chain ought to develop as illustrated beneath.

Mining of a brand new block
Blockchain after mining of three new blocks

You might also wish to test whether or not or not your chain of blocks can nonetheless be thought-about legitimate, i.e. meets each the goal issue stage and holds the right earlier hash values.

Blockchain validity test

And there you might be! Given the assorted, considerably theoretical blockchain-related ideas, which we needed to work our method via firstly of this weblog put up, the precise, albeit fairly fundamental, implementation ought to really feel each surprisingly simple and rewarding.

Nonetheless, that is solely the start. Within the subsequent and last weblog put up, we are going to prolong this single-node to a multi-node blockchain setup holding transaction knowledge and that includes its very personal crypto coin, the “BeCoin”.


[1] Stuart Haber and W. Scott Stornetta, “How to Time-Stamp a Digital Document”, in: A. J. Menezes and S. A. Vanstone (eds.), “Advances in Cryptology — CRYPTO ‘90”, LNCS 537, pp. 437–455, Springer-Verlag, Berlin, 1991

[2] Satoshi Nakamoto, “Bitcoin: A Peer-to-Peer Electronic Cash System”, Oct. 2008

[3] Vitalik Buterin, “Ethereum: A Next-Generation Smart Contract and Decentralized Application Platform”, 2014

[4] Gavin Wooden, “Ethereum: A Secure Decentralised Generalised Transaction Ledger”, Berlin model, 2022

[5] Wouter Penard and Tim van Werkhoven, “On the Secure Hash Algorithm family”, in: Gerard Tel, “Cryptography in Context”, pp. 1–18, Feb. 2008

[6] Leslie Lamport, Robert Shostak, and Marshal Pease, “The Byzantine Generals Problem”, ACM Trans. on Programming Languages and Programs, Vol. 4, No. 3, pp. 382–401, July 1982

[7] Amy Castor, “A (Short) Guide to Blockchain Consensus Protocols”, March 2017, up to date Sept. 2021

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