Shreyas’ Notes

Blockchains as Economic/Digital Infrastructure

STAT 499

spring, freshman year

“corruption factor”

trust, but verify (trustlessness)

Trust relationships

social -> institutional -> programmable

Bitcoin §

a prefix-immutable append-log of non-conflicting authenticated events in a decentralized peer-to-peer network


fixed, full history

public ledger.

incentives for mining.

Primitives §

Asymmetric Cryptography §

digital signatures.

  1. Gen\mathrm{Gen}
  2. Sign\mathrm{Sign}
  3. Verify\mathrm{Verify}

Signature = Sign(M, k)

Verify(M, Signature, K)

Hash functions: one-way functions. uniq.

“difficult to solve, easy to verify”

Proof of work

Blockchain §

every block includes the hash of the previous block

nakamoto consensus. longest chain wins

honest majority assumption

fault tolerance

probabilistic consensus

Ethereum §

General, as opposed to bitcoin

deterministic FSM

ethereum virtual machine

decentralized applications. contracts.

Stable coins §

currencies that are meant to hold stable values.

e.g. 1 Tether is pegged to 1 USD

Abstracting blockchains §

Privacy coins §

Blockchain issues §

Block size, TPS (Transactions per second), and security are interlinked. At smaller block generation times, many blocks will be created and conflict resolution will take longer.

off-chain layer: payment channels, dispute resolution