caution: Digital is in an early stage and it is still under development

Blockchain is one of the hot topics of the moment. It seems that it has the potential to change the way that the world approaches distributed ledgers but, what is a blockchain?

A Blockchain is a distributed database system that acts as an “open ledger” to store and manage transactions. The key idea behind is that it is formed by blocks. These blocks contain details about the trasnactions processed at some point and a link to the block which was processed just before. The way of linking one block with the previous one (creating a "block"-"chain") is adding the hash of the previous block to the new block and its own hash. This makes it impossible for anyone to alter information about the records retrospectively which makes blockchain immutable — information remains in the same state for as long as the network exists.

This technology was first introduced in the Bitcoin whitepaper, in 2009 by Satoshi Nakamoto.

After some hype on the cryptocurrencies some people saw the value on the technology that enables Bitcoin, Blockchain a public ledger shared by all the entities in wich one can trust.

Digital

Digital is an implementation of a simple blockchain in Golang based on bitcoin. This repository contains the "core" library of the project. That means that you will not find here the necessary code for setting up a node in a network. This constrain has been intentionally because the idea is to help others to learn the key concepts behind blockchain and not get a production ready implementation.

The main objectives of Digital are:

• Become the entry point for understanding the key concepts of the Blockchain technology
• Give a simple implementation with the main functionalites of a Blockchain
• Easy to configure and run in your computer
• Self documented and easy to hack/extend

Bitcoin is decentralized network implementing a peer-to-peer electronic cash system. Bitcoin uses blockchain to keep track of all the account balances of the users in the network.

Identities: Bitcoin is based on public key cryptography. Each user has his/her own public and private key that are used to identify them and validate transactions.

Transactions: Transactions are the way of transfering value from one user to other. A transaction have the informatio of who is giving the value and to whom. In order to be sure that a transaction is valid we need to check two things:

• Who is transfering the value actually has that value: That means that he recived that value from a previous transaction and he did not spent it yet.
• Who is transfering the value is who created the transcation: That means that he signed the transaccion. It can be easly verified with his public key.

Blocks: Blocks are basically a bunch of valid transactions. The nodes of the network receive which are the pending transactions and validate them. Then they start working in the proof-of-work. To make it hard to accept blocks a valid block has to have a hash with a concrete properties. Those properties are usually "start with k zeros". But the hash of something remains always equal... so what we do is add some extra data to the block (the nonce) and change it until we get a block which a hash value meeting the property that we were looking for. As soon as we find it we broadcast the block and the other nodes will put it in the blockchain and will keep working from there.

Incentives: A transaction is accepted when it is finally in the blockchain, so it is an a valid block. As we saw validating blocks is quite expensive, due to the proof-of-work procedure. So, why should one join the bitcoin network and validate blocks? The answer is that the user who finds the next valid block for the blockchain creates a new transaccion from which he get some bitcoins.

The arquitecture of this project is heavly based on the one specified in the Bitcoin whitepaper. Because of that this project can be used to grasp the concepts behind Bitcoin easier.

As we have seen identities are pairs of private and public keys. In Digitial the logic for the managment of identities is in the crypto.go file. Digital uses eliptic curves for the keys, the P256 for being more exact. In Golang cryptographic operations for P256 are implemented using constant-time algorithms.

An identity is represented as a Keypair

type Keypair struct {
	Public  []byte
	Private []byte
}

To transform Keys into something "humar readable" digital uses Base64 for byte encoding.

Transactions have two important parts: the header an the payload:

type Transaction struct {
	Header    TransactionHeader
	Signature []byte
	Payload   []byte
}

The header contains all the important information about the transaction. It is separated from the payload because in our network we do not want to send each time all the information about a tranction but only the information which is important. To make it secure, we sign each transaction with the private key of the sender (From in the header)

type TransactionHeader struct {
	From        []byte
	To          []byte
	Type        TransactionType
	Timestamp   uint32
	PayloadHash []byte
}

The transaction header:

• Contains two public keys: one for the sender an another for the receiver.
• Contains a timestamp of when it is created
• The hash of its payload, using sha256
• The transaction Type

The transaction type is necesary because we haver more than one kind. It is extensible. In the future we could add to the network as many types of transactions as needed.

type TransactionType uint32

const (
	Payment TransactionType = 0
	CoinCreation
)

By now there are two kind of transactions:

• Payment: The transaction is between two users and states how much value is transfered
• Coin Creation: The transaction is the creation of a new coin, in our case after creating a valid block.

type Block struct {
	Header       BlockHeader
	Signature    []byte
	Transactions []Transaction
}

type BlockHeader struct {
	From       []byte
	PrevHash   []byte
	MerkleRoot []byte
	Timestamp  uint32
	Nonce      uint32
}

type Blockchain struct {
	Identities []string
	Blocks     []Block
}

// TODO: Example of Blockchain + three identities + two transaction + one block

Digital is under the MIT license. See the LICENSE file for details.