How to Create Your Own Cryptocurrency Blockchain in Python

Cryptocurrencies and their underlying blockchain technology have taken the world by surprise —from their humble beginnings a few years ago to current everyday conversation point.

Typically, a blockchain refers to a distributed ledger technology that constitutes a “chain of blocks.” Every block in the blockchain has a hash of the previous block, a timestamp, and transaction data which makes it tamper-proof.

According to Elliot Minns, who has more than six years of software development experience and uses practical projects to teach people how to create cryptocurrencies, “Learning how to create a blockchain will help you to understand how digital currencies like Bitcoin and Ethereum operate and how you can extrapolate the technology to accelerate the capabilities of your applications.”

In this article, we are going to explain how you can create a simple blockchain using the Python programming language.

Here is the basic blueprint of the Python class we’ll use for creating the blockchain:

class Block(object):

    def __init__():

        pass

    #initial structure of the block class 

    def compute_hash():

        pass

    #producing the cryptographic hash of each block 

  class BlockChain(object):

    def __init__(self):

    #building the chain

    def build_genesis(self):

        pass

    #creating the initial block

    def build_block(self, proof_number, previous_hash):

        pass

    #builds new block and adds to the chain

   @staticmethod

    def confirm_validity(block, previous_block):

        pass

    #checks whether the blockchain is valid

    def get_data(self, sender, receiver, amount):

        pass

    # declares data of transactions

    @staticmethod

    def proof_of_work(last_proof):

        pass

    #adds to the security of the blockchain

    @property

    def latest_block(self):

        pass

    #returns the last block in the chain 

Now, let’s explain how the blockchain class works.

Initial Structure of the Block Class

Here is the code for our initial block class:

import hashlib

import time

class Block(object):

    def __init__(self, index, proof_number, previous_hash, data, timestamp=None):

        self.index = index

        self.proof_number = proof_number

        self.previous_hash = previous_hash

        self.data = data

        self.timestamp = timestamp or time.time()

    @property

    def compute_hash(self):

        string_block = "{}{}{}{}{}".format(self.index, self.proof_number, self.previous_hash, self.data, self.timestamp)

        return hashlib.sha256(string_block.encode()).hexdigest()

As you can see above, the class constructor or initiation method ( __init__()) above takes the following parameters:

• self — just like any other Python class, this parameter is used to refer to the class itself. Any variable associated with the class can be accessed using it.
  
• index — it’s used to track the position of a block within the blockchain.
  
• previous_hash — it used to reference the hash of the previous block within the blockchain.
  
• data—it gives details of the transactions done, for example, the amount bought.
  
• timestamp—it inserts a timestamp for all the transactions performed.
  

The second method in the class,  compute_hash , is used to produce the cryptographic hash of each block based on the above values.

As you can see, we imported the SHA-256 algorithm into the cryptocurrency blockchain project to help in getting the hashes of the blocks.

Once the values have been placed inside the hashing module, the algorithm will return a 256-bit string denoting the contents of the block.

So, this is what gives the blockchain immutability. Since each block will be represented by a hash, which will be computed from the hash of the previous block, corrupting any block in the chain will make the other blocks have invalid hashes, resulting in breakage of the whole blockchain network.

Building the Chain

The whole concept of a blockchain is based on the fact that the blocks are “chained” to each other. Now, we’ll create a blockchain class that will play the critical role of managing the entire chain.

It will keep the transactions data and include other helper methods for completing various roles, such as adding new blocks.

Let’s talk about the helper methods.

Adding the Constructor Method

Here is the code:

class BlockChain(object):

    def __init__(self):

        self.chain = []

        self.current_data = []

        self.nodes = set()

        self.build_genesis()

The __init__() constructor method is what instantiates the blockchain.

Here are the roles of its attributes:

• self.chain — this variable stores all the blocks.
  
• self.current_data — this variable stores information about the transactions in the block.
  
• self.build_genesis() — this method is used to create the initial block in the chain.

Building the Genesis Block

The build_genesis() method is used for creating the initial block in the chain, that is, a block without any predecessors. The genesis block is what represents the beginning of the blockchain.

To create it, we’ll call the build_block() method and give it some default values. The parameters proof_number and previous_hash are both given a value of zero, though you can give them any value you desire.

Here is the code:

def build_genesis(self):

        self.build_block(proof_number=0, previous_hash=0)

 def build_block(self, proof_number, previous_hash):

        block = Block(

            index=len(self.chain),

            proof_number=proof_number,

            previous_hash=previous_hash,

            data=self.current_data

        )

        self.current_data = []  

        self.chain.append(block)

        return block

Confirming Validity of the Blockchain

The confirm_validity method is critical in examining the integrity of the blockchain and making sure inconsistencies are lacking.

As explained earlier, hashes are pivotal for realizing the security of the cryptocurrency blockchain, because any slight alteration in an object will result in the creation of an entirely different hash.

Thus, the confirm_validity method utilizes a series of if statements to assess whether the hash of each block has been compromised.

Furthermore, it also compares the hash values of every two successive blocks to identify any anomalies. If the chain is working properly, it returns true; otherwise, it returns false.

Here is the code:

def confirm_validity(block, previous_block):

        if previous_block.index + 1 != block.index:

            return False

        elif previous_block.compute_hash != block.previous_hash:

            return False

        elif block.timestamp <= previous_block.timestamp:

            return False

        return True

Declaring Data of Transactions

The get_data method is important in declaring the data of transactions on a block. This method takes three parameters (sender’s information, receiver’s information, and amount) and adds the transaction data to the self.current_data list.

Here is the code:

def get_data(self, sender, receiver, amount):

        self.current_data.append({

            'sender': sender,

            'receiver': receiver,

            'amount': amount

        })

        return True

Effecting the Proof of Work

In blockchain technology, Proof of Work (PoW) refers to the complexity involved in mining or generating new blocks on the blockchain.

For example, the PoW can be implemented by identifying a number that solves a problem whenever a user completes some computing work. Anyone on the blockchain network should find the number complex to identify but easy to verify — this is the main concept of PoW.

This way, it discourages spamming and compromising the integrity of the network.

In this article, we’ll illustrate how to include a Proof of Work algorithm in a blockchain cryptocurrency project.

Finalizing With the Last Block

Finally, the latest_block() helper method is used for retrieving the last block on the network, which is actually the current block.

Here is the code:

 def latest_block(self):

        return self.chain[-1]

Implementing Blockchain Mining

Now, this is the most exciting section!

Initially, the transactions are kept in a list of unverified transactions. Mining refers to the process of placing the unverified transactions in a block and solving the PoW problem. It can be referred to as the computing work involved in verifying the transactions.

If everything has been figured out correctly, a block is created or mined and joined together with the others in the blockchain. If users have successfully mined a block, they are often rewarded for using their computing resources to solve the PoW problem.

Here is the mining method in this simple cryptocurrency blockchain project:

def block_mining(self, details_miner):

            self.get_data(

            sender="0", #it implies that this node has created a new block

            receiver=details_miner,

            quantity=1, #creating a new block (or identifying the proof number) is awarded with 1

        )

        last_block = self.latest_block

        last_proof_number = last_block.proof_number

        proof_number = self.proof_of_work(last_proof_number)



        last_hash = last_block.compute_hash

        block = self.build_block(proof_number, last_hash)



        return vars(block)  

Summary

Here is the whole code for our crypto blockchain class in Python:

import hashlib

import time

class Block(object):

    def __init__(self, index, proof_number, previous_hash, data, timestamp=None):

        self.index = index

        self.proof_number = proof_number

        self.previous_hash = previous_hash

        self.data = data

        self.timestamp = timestamp or time.time()

    @property

    def compute_hash(self):

        string_block = "{}{}{}{}{}".format(self.index, self.proof_number, self.previous_hash, self.data, self.timestamp)

        return hashlib.sha256(string_block.encode()).hexdigest()

    def __repr__(self):

        return "{} - {} - {} - {} - {}".format(self.index, self.proof_number, self.previous_hash, self.data, self.timestamp)

class BlockChain(object):

    def __init__(self):

        self.chain = []

        self.current_data = []

        self.nodes = set()

        self.build_genesis()

    def build_genesis(self):

        self.build_block(proof_number=0, previous_hash=0)

    def build_block(self, proof_number, previous_hash):

        block = Block(

            index=len(self.chain),

            proof_number=proof_number,

            previous_hash=previous_hash,

            data=self.current_data

        )

        self.current_data = []  

        self.chain.append(block)

        return block

    @staticmethod

    def confirm_validity(block, previous_block):

        if previous_block.index + 1 != block.index:

            return False

        elif previous_block.compute_hash != block.previous_hash:

            return False

        elif block.timestamp <= previous_block.timestamp:

            return False

        return True

    def get_data(self, sender, receiver, amount):

        self.current_data.append({

            'sender': sender,

            'receiver': receiver,

            'amount': amount

        })

        return True        

    @staticmethod

    def proof_of_work(last_proof):

        pass

    @property

    def latest_block(self):

        return self.chain[-1]

    def chain_validity(self):

        pass        

    def block_mining(self, details_miner):       

        self.get_data(

            sender="0", #it implies that this node has created a new block

            receiver=details_miner,

            quantity=1, #creating a new block (or identifying the proof number) is awared with 1

        )

        last_block = self.latest_block

        last_proof_number = last_block.proof_number

        proof_number = self.proof_of_work(last_proof_number)

        last_hash = last_block.compute_hash

        block = self.build_block(proof_number, last_hash)

        return vars(block)  

    def create_node(self, address):

        self.nodes.add(address)

        return True

    @staticmethod

    def get_block_object(block_data):        

        return Block(

            block_data['index'],

            block_data['proof_number'],

            block_data['previous_hash'],

            block_data['data'],

            timestamp=block_data['timestamp']

        )

blockchain = BlockChain()

print("GET READY MINING ABOUT TO START")

print(blockchain.chain)

last_block = blockchain.latest_block

last_proof_number = last_block.proof_number

proof_number = blockchain.proof_of_work(last_proof_number)

blockchain.get_data(

    sender="0", #this means that this node has constructed another block

    receiver="LiveEdu.tv", 

    amount=1, #building a new block (or figuring out the proof number) is awarded with 1

)

last_hash = last_block.compute_hash

block = blockchain.build_block(proof_number, last_hash)

print("WOW, MINING HAS BEEN SUCCESSFUL!")

print(blockchain.chain)

Now, let’s try to run our code to see if we can generate some digital coins...

Wow, it worked! 

Conclusion

That is it!

We hope that this article has assisted you to understand the underlying technology that powers cryptocurrencies such as Bitcoin and Ethereum.

We just illustrated the basic ideas for making your feet wet in the innovative blockchain technology. The project above can still be enhanced by incorporating other features to make it more useful and robust.

Of course, if you need something advanced, you can always grab a tutorial and fully immerse yourself in the world of cryptos.

Do you have any comments or questions? Please share them below.