general blockchain fundamentals: starting notes for a new online course

berkley-decal-spring-2020/lec/1.md

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+# Blockchain fundamentals
+
+data within the chain is _immutable/tamper evident_
+
+Block chain is also a distrubuted ledger system where everyone has a copy of a shared database.
+
+
+## Bank Model v Decentralized Model
+
+### Bank
+
+* Identity management: Accounts basically
+
+* Services: Transaction service
+
+* Record Management: Transaction history 
+
+* Trust: assigned entity to trust in v a consensus protocol
+
+
+## Identity
+
+Private/Public key pairs must be gen'd to properly communicate
+
+## Transactions
+
+> When is a transaction valid
+
+1. Signature
+2. available funds
+3. No other transactions are using the funds
+
+Say an account has 10$ and tries sending 10$ to 2 other accounts at the same time. We need to make sure we can't send that money twice, only once or none at all.
+
+Bank Model: transactions happen sequentially so the above scenario doesn't ever happen as long as the central agent atomizes each transaction; that way they happen sequentially.
+
+Keeping track of unspent money: **UTXO Model**
+
+A UTXO is basically like a piggy bank within someones account but the money can only be spent all at once.
+
+Example:
+```
+Gloria has: { 5 2 1 }
+Brian has:  { 2 4 }
+```
+If Gloria wanted to send 4 coins to Brian she would have to use the utxo of 5 and send 4 coins to Brian and 1 to herself.
+In this way we spend all the money in that UTXO.
+
+
+The motivation behind this method is that its very easy to code without much hassle.
+
+Once we have a set of transactions that we've done we put them into a block(to avoid spamming transaction data onto the network).
+We then just periodically put this onto the block chain.
+
+## Persistence
+
+Instead of one database hosted by one person we actually let _everyone_ on the network store a copy of the block chain.
+
+
+
+## Proof of Work
+
+* Using consensus
+
+People propse transactions/blocks and the rest vote on whether or not they will add those transactions to their copies of the block chain.
+
+Everyone then looks at the transactions and makes sure that they are valid.
+This way we can avoid double spending.
+The issue is that if they