Since the advent of the internet, programmers have been trying to figure out how to create a [digital] world in which people anywhere - even complete strangers - can transact directly with one another safely and efficiently. In essence, they have been trying to recreate the bedrock of civilization: an orderly system of bookkeeping that allows people to trust each other's claims about what they own, what they owe, and what they are owed. For most of the digital age, this “trust” has been facilitated by third parties such as banks, governments, or credible companies that are willing to guarantee that a transaction is valid and secure. But transactions via third parties are slow and expensive, and they cannot be verified by just anyone, which opens the door to fraud and theft.
Today, the notion of a secure and trusted third party in a digital world isn't purely mythical. And in fact, it's exactly what blockchain technology embodies in a kind of magical way. In this course, you will explore the mechanics of blockchain technology and how the blockchain acts like a trusted third party. To do this, Professor Ari Juels will design a theoretical cryptocurrency from scratch to illustrate how Bitcoin and other cryptocurrencies make use of the blockchain to transfer value from person to person. Then, once you understand how the blockchain acts as a trusted ledger, you will practice articulating other transformative ways in which blockchains can change how commercial and interpersonal connections happen online.
Cryptography has been around for thousands of years and is at the heart of digital communications today. Most people rely on cryptography on a daily basis without even knowing it; most popular messaging apps use encryption to ensure the security of messaging between two people. Blockchain technology, in a similar way, relies on cryptography to protect the identity of those sending and receiving messages and ensures that all information and transactions are secure and legitimate. Thus, to really understand blockchain technology, you have to understand the core principles of cryptography.
This course will walk you through the basics of cryptography: how information has historically been disguised (encrypted) and revealed (decrypted) using mathematics. You will see how a message can be turned into a number, and how that number can be encrypted and decrypted by two complete strangers. You will practice encrypting your own message to understand the basics of what makes a good encryption scheme. Then, you will delve deeper into the specific type of cryptography used in blockchain technology -- public key cryptography - and the promises and limitations it has in carrying out the core functions of a blockchain. You will create your own theoretical gold exchange in order to more fully understand how you can send anything to anyone around the world without a middleman. Ultimately you will know exactly how information on the blockchain is secured, legitimized, and authenticated without needing a third party to verify it.The course Cryptocurrencies and Ledgers is required to be completed prior to starting this course.