With all the hype surrounding blockchains and cryptocurrencies, diving deep into how they operate can be enlightening. A great way to grasp the underlying principles is to create your own blockchain. This article will walk you through the essential steps to build a functioning blockchain from the ground up, making it user-friendly and practical!

Step 1: Understanding the Chain of Blocks

At its core, a blockchain isn’t merely a linear sequence of blocks. Imagine it more like a tree, where each block can point to its parent through a hash. This hash incorporates the block’s data, thereby ensuring the integrity of the overall structure. A good approach for creating a block in JavaScript could look something like this:

class Block {
    constructor(blockchain, parentHash, nonce = sha256(new Date().getTime().toString()).toString()) {
        this.blockchain = blockchain;
        this.nonce = nonce;
        this.parentHash = parentHash;
        this.hash = sha256(this.nonce + this.parentHash).toString();
    }
}

Think of each block as a unique page in a book, where every page references the previous page’s content. If you attempt to alter any page, all subsequent pages would also need to change, making tampering detectable.

Step 2: Defining THE Blockchain

When people talk about “THE blockchain,” they refer to the longest chain available. This longest chain represents the agreed-upon state of data and is crucial in preventing forks or divergent histories.

class Blockchain {
    longestChain() {
        const blocks = values(this.blocks);
        const maxByHeight = maxBy(prop(height));
        const maxHeightBlock = reduce(maxByHeight, blocks[0], blocks);
        const getParent = (x) => {
            if (x === undefined) return false;
            return [x, this.blocks[x.parentHash]];
        };
        return reverse(unfold(getParent, maxHeightBlock));
    }
}

In this analogy, think of the longest chain as the most well-received version of a story among many retellings. As new stories emerge, the community embraces the latest, longest version as the canonical one.

Step 3: Avoiding Chaos

To ensure that multiple nodes don’t freely manipulate and fork the chain, we introduce a consensus mechanism—a computational puzzle known as proof-of-work (PoW). The PoW process requires nodes to invest resources, making it challenging for any individual to dominate the network.

class Block {
    isValid() {
        return this.parentHash === root &&
               (this.hash.substr(-DIFFICULTY) === '0'.repeat(DIFFICULTY)) &&
               this.hash === sha256(this.nonce + this.parentHash).toString();
    }
}

Think of this as a competition where every participant must solve a complex puzzle to claim a prize. Only those who prove their capability through effort end up getting to build on the current chain.

Step 4: The Mining Incentive

Miners are motivated by rewards for their effort, typically in the form of cryptocurrency (such as Bitcoin). They ensure security and reliability while conveying ownership through public keys.

class Block {
    createChild(coinbaseBeneficiary) {
        return new Block({
            blockchain: this.blockchain,
            parentHash: this.hash,
            height: this.height + 1,
            coinbaseBeneficiary
        });
    }
}

Imagine a treasure hunt—only those who successfully navigate the challenges get to keep the treasure!

Step 5: Confirming Transactions

Now that we understand blocks and mining, we must implement transactions—the means of transferring “ownership.” Transactions involve confirming that a sender has sufficient funds, akin to checking if a bank account has available balance before allowing a withdrawal.

class Transaction {
    constructor(inputPublicKey, outputPublicKey, amount) {
        this.inputPublicKey = inputPublicKey;
        this.outputPublicKey = outputPublicKey;
        this.amount = amount;
        this._setHash();
    }
}

This reinforces our system’s integrity; invalid transactions are rejected similar to how a bank denies overdrafts.

Step 6: Broadcasting Transactions

What if your machine struggles with complex calculations? Non-mining nodes can still broadcast transactions for miners to include. This step ensures that everyone can participate in the network without needing to do all the heavy lifting.

class Blockchain {
    constructor() {
        ...
        subscribeTo(TRANSACTION_BROADCAST, (transaction, blockchainName) => {
            if (blockchainName === this.name) {
                this.pendingTransactions[transaction.hash] = new Transaction(
                    transaction.inputPublicKey,
                    transaction.outputPublicKey,
                    transaction.amount
                );
            }
        });
    }
}

This dynamic adds efficiency and inclusiveness to the operation, making it feel like a collaborative project where everyone contributes.

Step 7: Adding Transaction Fees

To incentivize miners further, we introduce transaction fees. A small fee encourages miners to prioritize certain transactions, much like tipping a waiter for prompt service.

class Block {
    addTransaction(inputPublicKey, outputPublicKey, amount, fee) {
        if (!this.isValidTransaction(inputPublicKey, amount, fee)) return;

        const transaction = new Transaction(inputPublicKey, outputPublicKey, amount, fee);
        this.transactions[transaction.hash] = transaction;
        this.utxoPool.handleTransaction(transaction, this.coinbaseBeneficiary);
        this._setHash();
    }
}

This mechanism ensures miners are adequately compensated for their contributions to the network’s security and reliability.

Step 8: Ensuring Ownership

Finally, we need to tie ownership to transactions accurately. Each transaction should be signed with a private key, allowing nodes to verify that the transaction was authorized by the rightful owner.

class Transaction {
    constructor(inputPublicKey, outputPublicKey, amount, fee, signature) {
        this.inputPublicKey = inputPublicKey;
        this.outputPublicKey = outputPublicKey;
        this.amount = amount;
        this.fee = fee;
        this.signature = signature;
        this._setHash();
    }

    hasValidSignature() {
        return (this.signature !== undefined &&
                verifySignature(this.hash, this.signature, this.inputPublicKey));
    }
}

Imagine this as a locked box where only the owner has the key. Every time you attempt to access it, the lock must validate that you possess the right key.

Running Your Blockchain

To run your blockchain project, simply execute yarn start. You may also start a socket.io server with node src/server.js. For those who prefer, Docker Compose is available as an alternative.

Troubleshooting

• If you encounter connection issues, ensure your socket server is running properly.
• For problems with transaction validation, double-check that the input public key corresponds with a valid UTXO.
• If your blocks aren’t being added, verify that they pass through the necessary validation checks and that your setup includes the proof-of-work logic.

For more insights, updates, or to collaborate on AI development projects, stay connected with fxis.ai.

At fxis.ai, we believe that such advancements are crucial for the future of AI, as they enable more comprehensive and effective solutions. Our team is continually exploring new methodologies to push the envelope in artificial intelligence, ensuring that our clients benefit from the latest technological innovations.