How Does a Blockchain Work? | DASH School #2

Hello and welcome back to Dash School I am your teacher, Amanda B Johnson And as you’ll recall, we last left off talking about the digital ledger that is called a blockchain and how it is used to record changes of ownership among people. We ended with the questions; Who gets to make updated entries into our e-Money ledger When do they get to make them? And why should anybody trust that the updates that they make are accurate? And all of these questions can really be summed up under one heading. Security. What is the security model of a blockchain? To understand that we first need to conceptualize how a blockchain is run to begin with. And that is via a Network. Using the internet. The basis of the network is people keeping copies of the blockchain on their computers and they are connected to one another via the internet. Irina in Russa communicates to Chen in China, communicates to Joe in Australia communicates to Harry in Hawaii communicates to Carrie in California Marie in Mexico Larry in London and hundreds, or thousands more people accross the world. Looking something like this. You get the general picture. And the purpose of this network is for all participants with a copy of the blockchain to agree on the state of that blockchain at any given time. For example, a situation like this, in which Chen’s copy of the blockchain reports that I have 3 e-Moneys But Marie’s copy reports that I have 47 would cause total chaos and would be of no use to anybody whatsoever. So the state in which all, or the majority of the network agrees on the same versions of the blockchain is called…… consensus. And it’s from consensus that a blockchain running network achieves most of it’s security. So, back to our example of Chen and Marie having conflicting copies of the blockchain, a big no no useless for everybody How do we prevent that from happening and keep consensus about who owns what? I’m going to talk a little bit of computer science to you right now but don’t even worry, it’s not a big deal. The mechanism used to maintain consensus on who owns what at any given time is called proof of work. And that just gives us a fancy way of deciding who gets to make an update to the ledger and when. See, the primary goal here is to not have both Chen and Marie broadcasting conflicting versions of our blockchain at the same time. We’ve got to have one or the other so which is it going to be? Chen’s version? Or Marie’s version? Using what’s called proof of work mining, and I know it’s weird that we would use the word mining but you’ll see why in a moment, we can maintain consensus. So back to a stripped down basic version of our network, right? What we don’t want is two different people with copies of the ledger making an update at the same time. We want only one update to the ledger being made at a time. Which everyone else can take a moment to agree with and incorporate the update into their own copy of the blockchain. This is achieved using specialized computers called miners. Here’s what one looks like. Yes, they really are weird looking specialized computers. The computer code, computer code looking something like this: that makes our blockchain possible, contains a math problem to be solved. Seems kind of silly when I say it out loud, but I’m not kidding. The computer code has a self adjusting math problem that these mining machines are built to solve. And the difficulty of the math problem is set to increase as the numbers of miners on our blockchain network increases. And all this fancy mumbo jumbo is done to ensure one thing, That only one miner solves the math problem at a time and that it happens consistently every few minutes. And what happens when a miner solves the math problem? Well… two things happen actually. First is that he gets a reward of newly created coins on the blockchain. Yes, I am not kidding, newly created coins on the blockchain are paid to the miner who solved the math problem as a reward for proving his work. And secondly, he is the one who gets to create the next block. Or in other words, he is the one who gets to publish the next update to the ledger; containing all the transactions that happened in the last few minutes. And thus does our blockchain, which is a chain of blocks, keep perfect record of every transaction that’s made; the time that the block was published and the total number of coins that exist – including the increase of coins as the miners were paid in new coins as their reward. As an example, onethousand coins, then onethousand five, then onethousand and ten, and on and on. in this way our money supply as recorded on the blockchain can be considered open and honest. In other words, it’s viewable to anybody. This also means that inflation, AKA, the new money created, is both transparent and predictable. (Though currencies like Dash will not be inflated forever) But that’s a topic for another day. What you need to know now, is these accounts… They’re not actually tied to your name. That wouldn’t work at all. Accounts on a blockchain actually look something more like this: Long alpha-numeric addresses, which are actually longer than these, are totally unique and you can own as many of them as you like (blah) What does this mean? What is this witchcraft? Well, it’s based on a form of math called cryptography, actually and you are totally smart enough to understand it. So hop on over to episode 3 to see how cryptography allows us all to have accounts on a blockchain. (preview plays of next episode)

57 thoughts on “How Does a Blockchain Work? | DASH School #2”

  1. great video..
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  2. If I make a transaction now, what determines if my transaction will be picked in the next block to be mined? And what defines the size of a block? Does the miner cherry pick, say, 100 transactions and then tries to validate those?

  3. Our world will be a much more awesome place when Dash and other crypto are is utilized by more folks – AND when they see an attractive, bright woman and they don't immediately sexualize her. 😀

  4. Finally someone CLEARLY explains based on context and relevance…. with energy and appreciation for the audience. This (of the 10 I've seen) is the best explanation out there… well done, masterful in conveying simply, these abstract concepts. I like how you know what we're thinking and bring it forward, then answer it.

  5. i cannot concentrate with a theacher like she is, 8 times looked the vid ,but dont get it she is to beautiful

  6. After your explanation I feel like "why I was not able to understand it before?". Very nice, Amanda. Thanks for that.

  7. excellent teaching. I love her lessons. I would like to clarify some concepts. Person A mines the bitcoin. sends the bitcoin to person B. person B cannot claim that he has two bitcoins because he doesn't have proof of work? How does the 'math problem' that each computer solves comes into this simple scenario?

  8. I like to listen to this video on 0.75 speed and imagine she is drunk and hitting on me.

    Then I usually cry myself to sleep.

  9. Hey Teacher , HOW long before that merry computer hacker in North Korea hacks this system hmmmmmm . she's not that good looking . SHE might have the hacking menu , get it .

  10. 4:47 of part 2 shows a mirror image to the graph denounced in part 1 … this is how transparantly stupid skyhi pie sty unhingery is; a mockery of the drill down to/of/with facts on the ground layerage of pioneers like Todd Boyle proposed in the 90s at .. oh, if you're gonna offer him money for that url, you better have your rule package conform to his, he's ethical like that …. unlike the shamelessly energy guzzling 'miners' .. disgustingly unethical .. on top of the cataclysmic e-waste prob as metastatized plastic scourge

    this adresses at least some of those concerns:

    ASICs are machines designed specifically for PoW mining that consume as much electricity as possible in an attempt to gain a disproportionately large amount of the distribution of coins. X15 ASICs are now readily available but fortunately were not before EverGreenCoin’s PoW phase had ended. Had the EverGreenCoin’s PoW phase lasted just a few weeks longer, people would have been able to mine EverGreenCoin with ASICs and that enormous consumption of electricity was avoided in EverGreenCoin’s name.

    I am very glad to say these energy gobbling machines did not affect EverGreenCoin’s PoW which was my intent during the designing of the coin. I take great pride in the fact that my predictions made during design held true throughout. I will not deny luck was a factor, as I think no one can reliably predict with any precision rate of technological advance especially in an industry so volatile, profit driven, and by most players, greed motivated. Certainly not I, but I did this once

  11. my question is when you solved the problem, who will validate the answer if that's the right answer?
    who will give you newly created coin?

  12. Excellent presentation, Amanda. You made everything clear and understandable. Great job on the whole series! Thank you.

  13. You can send mobile recharge all over the word with cryptocurrencies throught

  14. Why can't cryptocurrency protocols be designed such that the address balance is stored instead of transactions? This would be a non-blockchain format with updates possible at any location in the file. The sender and receiver would both sign the update and all the nodes would simply validate the signature, and whether the sender has enough balance, and then update their copies of the ledger to reflect the change in the balances of the sender and receiver. You get a much smaller distributed ledger and no need for proof of work.

  15. Sorry, one more question – gold had issues of forgery, not-really-scarce, hoarding-something not-so-useful etc. but it still was good to use for thousands of years. Then we had currency linked to gold, then we delinked it due to the need to fund wars. Then we said that we need decentralized currency so government cannot inflate it. Governments can inflate currency because they are no longer linked to gold, but we don't want to go back to gold and its problems. Now we have crypto-mining operations in the era of global warming that essentially are wasting energy and are backed by nothing but the bubble phenomena. Are there any plans for Dash and other crypto-currencies to be backed by Renewable Energy digital certificates like SolarCoin? This would save the planet, not to mention the concept of cryptocurrency.

  16. You jumped from proof of work to mining. I still do not get how system decides which version of ledger is better. What does it have to do with solving math problems? Seems like you skipped something in the middle. How solving math problems helps decide which ledger is more accurate?

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