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A Non-Technical Introduction
in 25 Steps
―
Daniel Drescher
Blockchain
Bas ics
BLOCKCHAIN BASICS
A NON-TECHNICAL INTRODUCTION
IN 25 STEPS
Daniel Drescher
Blockchain Basics: A Non-Technical Introduction in 25 Steps
Daniel Drescher
Frankfurt am Main, Germany
ISBN-13 (pbk): 978-1-4842-2603-2 ISBN-13 (electronic): 978-1-4842-2604-9
DOI 10.1007/978-1-4842-2604-9
Library of Congress Control Number: 2017936232
Copyright © 2017 by Daniel Drescher
This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or
part of the material is concerned, specifically the rights of translation, reprinting, reuse of illus-
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Contents
About the Author. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
About the Technical Reviewer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi
Stage 1: Terminology and Technical Foundations . . . . . . . . . . . . . . . . . . 1
Step 1: Thinking in Layers and Aspects . . . . . . . . . . . . . . . . . . . . . . . . . 3
Step 2: Seeing the Big Picture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Step 3: Recognizing the Potential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Stage I1: Why the Blockchain Is Needed . . . . . . . . . . . . . . . . . . . . . . . . 27
Step 4: Discovering the Core Problem. . . . . . . . . . . . . . . . . . . . . . . . . 29
Step 5: Disambiguating the Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Step 6: Understanding the Nature of Ownership . . . . . . . . . . . . . . . . 39
Step 7: Spending Money Twice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Stage III: How the Blockchain Works. . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Step 8: Planning the Blockchain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Step 9: Documenting Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Step 10: Hashing Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Step 11: Hashing in the Real World . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Step 12: Identifying and Protecting User Accounts . . . . . . . . . . . . . . . 93
Step 13: Authorizing Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Step 14: Storing Transaction Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Step 15: Using the Data Store. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Step 16: Protecting the Data Store . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Step 17: Distributing the Data Store Among Peers . . . . . . . . . . . . . . 145
Step 18: Verif ying and Adding Transactions . . . . . . . . . . . . . . . . . . . . . 153
Step 19: Choosing a Transaction History. . . . . . . . . . . . . . . . . . . . . . . 165
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