{"id":1425,"date":"2019-02-15T10:32:09","date_gmt":"2019-02-15T10:32:09","guid":{"rendered":"http:\/\/kusuaks7\/?p=1030"},"modified":"2023-07-19T13:54:08","modified_gmt":"2023-07-19T13:54:08","slug":"learn-blockchains-by-building-one","status":"publish","type":"post","link":"https:\/\/www.experfy.com\/blog\/fintech\/learn-blockchains-by-building-one\/","title":{"rendered":"Learn Blockchains by Building One"},"content":{"rendered":"

Ready to learn Blockchain?\u00a0Browse courses<\/a>\u00a0like\u00a0Blockchain Technology Fundamentals<\/a> developed by industry thought leaders and Experfy in Harvard Innovation Lab.<\/em><\/strong><\/p>\n

The fastest way to learn how Blockchains work is to build\u00a0one<\/p>\n

\n

You\u2019re here because, like me, you\u2019re psyched about the rise of Cryptocurrencies. And you want to know how Blockchains work\u2014the fundamental technology behind them.<\/p>\n

But understanding Blockchains isn\u2019t easy\u2014or at least wasn\u2019t for me. I trudged through dense videos, followed porous tutorials, and dealt with the amplified frustration of too few examples.<\/p>\n

I like learning by doing. It forces me to deal with the subject matter at a code level, which gets it sticking. If you do the same, at the end of this guide you\u2019ll have a functioning Blockchain with a solid grasp of how they work.<\/p>\n

Before you get\u00a0started\u2026<\/h3>\n

Remember that a blockchain is an\u00a0immutable, sequential\u00a0<\/em>chain of records called Blocks. They can contain transactions, files or any data you like, really. But the important thing is that they\u2019re\u00a0chained<\/em>\u00a0together using\u00a0hashes<\/em>.<\/p>\n

If you aren\u2019t sure what a hash is,\u00a0here\u2019s an explanation<\/a>.<\/p>\n

Who is this guide aimed at?<\/em><\/strong>\u00a0You should be comfy reading and writing some basic Python, as well as have some understanding of how HTTP requests work, since we\u2019ll be talking to our Blockchain over HTTP.<\/p>\n

What do I need?<\/em>\u00a0<\/strong>Make sure that\u00a0Python 3.6<\/a>+ (along with\u00a0pip<\/code>) is installed. You\u2019ll also need to install Flask and the wonderful Requests library:<\/p>\n

pip install Flask==0.12.2 requests==2.18.4<\/code><\/pre>\n
Oh, you\u2019ll also need an HTTP Client, like\u00a0Postman<\/a>\u00a0or cURL. But anything will do.<\/p>\n
Where\u2019s the final code?\u00a0<\/em><\/strong>The source code is\u00a0available here<\/a>.<\/p>\n<\/section>\n
\n
\n
Step 1: Building a Blockchain<\/h3>\n
Open up your favourite text editor or IDE, personally I \u2764\ufe0f\u00a0PyCharm<\/a>. Create a new file, called\u00a0blockchain.py<\/code>. We\u2019ll only use a single file, but if you get lost, you can always refer to the\u00a0source code<\/a>.<\/p>\n
Representing a Blockchain<\/h4>\n
We\u2019ll create a\u00a0Blockchain<\/code>\u00a0class whose constructor creates an initial empty list (to store our blockchain), and another to store transactions. Here\u2019s the blueprint for our class:<\/p>\n
Blueprint of our Blockchain Class<\/figcaption><\/figure>\n
Our\u00a0Blockchain<\/code>\u00a0class is responsible for managing the chain. It will store transactions and have some helper methods for adding new blocks to the chain. Let\u2019s start fleshing out some methods.<\/p>\n
What does a Block look\u00a0like?<\/h4>\n
Each Block has an\u00a0index<\/em>, a\u00a0timestamp<\/em>\u00a0(in Unix time), a\u00a0list of transactions<\/em>, a\u00a0proof<\/em>\u00a0(more on that later), and the\u00a0hash of the previous Block<\/em>.<\/p>\n
Here\u2019s an example of what a single Block looks like:<\/p>\n
Example of a Block in our Blockchain<\/figcaption><\/figure>\n
At this point, the idea of a\u00a0chain<\/em>\u00a0should be apparent\u2014each new block contains within itself, the hash of the previous Block.\u00a0This is crucial because it\u2019s what gives blockchains immutability:<\/strong>\u00a0If an attacker corrupted an earlier Block in the chain then\u00a0all<\/em><\/strong>\u00a0subsequent blocks will contain incorrect hashes.<\/p>\n
Does this make sense? If it doesn\u2019t, take some time to let it sink in\u2014it\u2019s the core idea behind blockchains.<\/em><\/p>\n
Adding Transactions to a\u00a0Block<\/h4>\n
We\u2019ll need a way of adding transactions to a Block. Our\u00a0new_transaction()<\/code>method is responsible for this, and it\u2019s pretty straight-forward:<\/p>\n
After\u00a0new_transaction()<\/code>\u00a0adds a transaction to the list, it returns the\u00a0index<\/em>\u00a0of the block which the transaction will be added to\u2014the next one to be mined.<\/em>This will be useful later on, to the user submitting the transaction.<\/p>\n
Creating new\u00a0Blocks<\/h4>\n
When our\u00a0Blockchain<\/code>\u00a0is instantiated we\u2019ll need to seed it with a\u00a0genesis<\/em>\u00a0block\u2014a block with no predecessors. We\u2019ll also need to add a\u00a0\u201cproof\u201d<\/em>\u00a0to our genesis block which is the result of mining (or proof of work). We\u2019ll talk more about mining later.<\/p>\n
In addition to creating the\u00a0genesis<\/em>\u00a0block in our constructor, we\u2019ll also flesh out the methods for\u00a0new_block()<\/code>,\u00a0new_transaction()<\/code>\u00a0and\u00a0hash()<\/code>:<\/p>\n
The above should be straight-forward\u2014I\u2019ve added some comments and\u00a0docstrings<\/em>\u00a0to help keep it clear. We\u2019re almost done with representing our blockchain. But at this point, you must be wondering how new blocks are created, forged or mined.<\/p>\n
Understanding Proof of\u00a0Work<\/h4>\n
A Proof of Work algorithm (PoW) is how new Blocks are created or\u00a0mined\u00a0<\/em>on the blockchain.\u00a0<\/em>The goal of PoW is to discover a number which solves a problem. The number must be\u00a0difficult to find<\/strong>\u00a0but easy to verify<\/strong>\u2014computationally speaking\u2014by anyone on the network. This is the core idea behind Proof of Work.<\/p>\n
We\u2019ll look at a very simple example to help this sink in.<\/p>\n
Let\u2019s decide that the\u00a0hash<\/em>\u00a0of some integer\u00a0x<\/code>\u00a0multiplied by another\u00a0y<\/code>\u00a0must end in\u00a00<\/code>. So,\u00a0hash(x * y) = ac23dc...0<\/code>. And for this simplified example, let\u2019s fix\u00a0x = 5<\/code>. Implementing this in Python:<\/p>\n
from hashlib import sha256<\/pre>\n
x = 5\r\ny = 0  # We don't know what y should be yet...<\/pre>\n
while sha256(f'{x*y}'.encode()).hexdigest()[-1] != \"0\":\r\ny += 1<\/pre>\n
print(f'The solution is y = {y}')<\/pre>\n
The solution here is\u00a0y = 21<\/code>. Since, the produced hash ends in\u00a00<\/code>:<\/p>\n
hash(5 * 21) = 1253e9373e...5e3600155e860<\/pre>\n
In Bitcoin, the Proof of Work algorithm is called\u00a0Hashcash<\/em><\/a>. And it\u2019s not too different from our basic example above. It\u2019s the algorithm that miners race to solve in order to create a new block. In general, the difficulty is determined by the number of characters searched for in a string. The miners are then rewarded for their solution by receiving a coin\u2014in a transaction.<\/p>\n
The network is able to\u00a0easily\u00a0<\/em>verify their solution.<\/p>\n
Implementing basic Proof of\u00a0Work<\/h4>\n
Let\u2019s implement a similar algorithm for our blockchain. Our rule will be similar to the example above:<\/p>\n
Find a number\u00a0<\/em>p\u00a0that when hashed with the previous block\u2019s solution a hash with 4 leading\u00a0<\/em>0<\/em><\/code>s is produced.<\/em><\/p><\/blockquote>\n
To adjust the difficulty of the algorithm, we could modify the number of leading zeroes. But 4 is sufficient. You\u2019ll find out that the addition of a single leading zero makes a mammoth difference to the time required to find a solution.<\/p>\n
Our class is almost complete and we\u2019re ready to begin interacting with it using HTTP requests.<\/p>\n<\/section>\n
\n
\n
Step 2: Our Blockchain as an\u00a0API<\/h3>\n
We\u2019re going to use the Python Flask Framework. It\u2019s a micro-framework and it makes it easy to map endpoints to Python functions. This allows us talk to our blockchain over the web using HTTP requests.<\/p>\n
We\u2019ll create three methods:<\/p>\n