Blockchain Explained in 7 Python Functions

Blockchain is an incredible digital assets record technology that is used in the case of cryptocurrency. It is a highly secure ledger system which grows continuously with records. They are secured using the principal of cryptography. Blockchain is also the world’s preferred means of storing digital currency. But what is all the buzz and how does one understand it in terms of code and logic? Let’s find out with the help of 7 Python functions:
Blockchain works on the principal of hash keys. Hashing functions are essential to avoid alteration and fraudulent manipulation.
def hash_function(k):
"""Hashes our transaction."""
if type(k) is not str:
        k = json.dumps(k, sort_keys=True)

    return hashlib.sha256(k).hexdigest()

Blockchain depends on the principle of a hash key. That is, it depends on the hashing function as its backbone. If it is not encrypted using a hashing function, anyone can manipulate the structure fraudulently.
def update_state(transaction, state):
    state = state.copy()

    for key in transaction:
        if key in state.keys():
            state[key] += transaction[key]
            state[key] = transaction[key]

    return state

The ‘state’ defines the person who has the record of storing asset. In other words, it represents what lies with whom. If the value is deducted from a person’s assets from 10 to 9, state will acquire a value like this:
{‘transaction’: {‘Tom’: 9, ‘Medium’: 1}}

Also, a critical part to keep in mind is that it is not possible to send/give someone more than one already has. To implement this property, we use the function given below:
def valid_transaction(transaction, state):
"""A valid transaction must sum to 0."""
if sum(transaction.values()) is not 0:
        return False

    for key in transaction.keys():
        if key in state.keys():
            account_balance = state[key]
            account_balance = 0

        if account_balance + transaction[key] < 0:
            return False

    return True
<br /><br />

After taking care of our basic logic functions to prevent fraudulent manipulations, we can focus on the structure. The Blockchain depends on blocks. Like the name, it is like chain of blocks. Subsequent blocks require the information of previous blocks to work. Here also, to prevent fraudulent insertions or deletions, all the previous blocks have strong encryption. One cannot decrypt a particular block without affecting the chain. Decrypting a chain in this way is impossible computationally.

<br /><br />

def make_block(transactions, chain):
"""Make a block to go into the chain."""
parent_hash = chain[-1]['hash']
    block_number = chain[-1]['contents']['block_number'] + 1

    block_contents = {
        'block_number': block_number,
        'parent_hash': parent_hash,
        'transaction_count': block_number + 1,
        'transaction': transactions

    return {'hash': hash_function(block_contents), 'contents': block_contents}

We can also check the integrity of the previous blocks using this function:
def check_block_hash(block):
    expected_hash = hash_function(block['contents'])

    if block['hash'] is not expected_hash:


Now it is time to assemble our blocks and update the Blockchain:
def check_block_validity(block, parent, state):
    parent_number = parent['contents']['block_number']
    parent_hash = parent['hash']
    block_number = block['contents']['block_number']

    for transaction in block['contents']['transaction']:
        if valid_transaction(transaction, state):
            state = update_state(transaction, state)

    check_block_hash(block)  # Check hash integrity

    if block_number is not parent_number + 1:

    if block['contents']['parent_hash'] is not parent_hash:

    return state

We have to use this function to verify the integrity of the chain as well:
def check_chain(chain):
"""Check the chain is valid."""
if type(chain) is str:
            chain = json.loads(chain)
            assert (type(chain) == list)
        except ValueError:
            # String passed in was not valid JSON
            return False
    elif type(chain) is not list:
        return False

    state = {}

    for transaction in chain[0]['contents']['transaction']:
        state = update_state(transaction, state)

    parent = chain[0]

    for block in chain[1:]:
        state = check_block_validity(block, parent, state)
        parent = block

    return state

Now we need to define a function to compile all of the above together:
def add_transaction_to_chain(transaction, state, chain):
    if valid_transaction(transaction, state):
        state = update_state(transaction, state)
        raise Exception('Invalid transaction.')

    my_block = make_block(state, chain)

    for transaction in chain:

    return state, chain

Now that we have our 7 functions, we need to define our starting block in the chain. That is, we have to define our deposit framework to have some kind of value as a beginning.
genesis_block = {
    'hash': hash_function({
        'block_number': 0,
        'parent_hash': None,
        'transaction_count': 1,
        'transaction': [{'Tom': 10}]
    'contents': {
        'block_number': 0,
        'parent_hash': None,
        'transaction_count': 1,
        'transaction': [{'Tom': 10}]

block_chain = [genesis_block]
chain_state = {'Tom': 10}

When we give or move some value to our medium from before:
chain_state, block_chain = add_transaction_to_chain(transaction={'Tom': -1, 'Medium': 1}, state=chain_state, chain=block_chain)

Then our state looks like this:
{'Medium': 1, 'Tom': 9}
Our Blockchain looks like:
[{'contents': {'block_number': 0,
               'parent_hash': None,
               'transaction': [{'Tom': 10}],
               'transaction_count': 1},
  'hash': '064d0b480b3b92761f31831d30ae9f01954efaa62371b4b44f11465ec22abe93'},
 {'contents': {'block_number': 1,
               'parent_hash': '064d0b480b3b92761f31831d30ae9f01954efaa62371b4b44f11465ec22abe93',
               'transaction': {'Medium': 1, 'Tom': 9},
               'transaction_count': 2},
  'hash': 'b4ae25f0cc0ee0b0caa66b9a3473e9a108652d53b1dc22a40962fef5c8c0f08c'}]

So, we have defined our 7 functions and assigned a transaction to the first block of our Blockchain. You can experiment with the code and change things around to see how the Blockchain changes. Try to experiment with what happens if you go against the logic and structure of the Blockchain. To start learning deep learning for further use, reach out to our Deep Learning Indian centers. Use artificial intelligence in Blockchain structures and learn Artificial Intelligence in Artificial Intelligence Indian centers.


The Blockchain is a very interesting framework. One can delve more about this and other cybersecurity functions to know the ins and outs. Our entire function depends on the integrity and hashing function of our Blockchain. This article gives a basic overview to explain what happens using the above mentioned functions.


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