Let's Develop a Blockchain with Python!

In this article, we'll walk through the information you need to develop "blockchain" — a technology drawing attention across many fields in recent years — using the programming language Python.

1. What is a blockchain you can develop with Python?

The best-known field where blockchain technology is used is cryptocurrency, starting with Bitcoin.

Let's first understand what a blockchain actually is.

In a nutshell, a blockchain is a "ledger where transaction history is strictly managed." Data exchanged over the internet can sometimes be tampered with along the way, but blockchain is designed with security that prevents such tampering from happening.

Transaction data is called a "block," and because blocks are linked together like a chain, the technology is named "blockchain."

On the internet, a typical, representative model is the "client-server" type, where a server exists somewhere in the world and clients such as PCs and smartphones access data stored on that server.

Blockchain, on the other hand, does not have data managed by a specific server machine. Instead, it is managed in a distributed manner through the cooperation of multiple computers.

This mechanism is called a P2P (Peer to Peer) network.

2. Knowledge needed to develop blockchain with Python

Even if you're skilled at programming with Python, developing a blockchain will be difficult if you have zero knowledge of blockchain itself.

Let's take a look at the background knowledge on blockchain and Python you'll need in advance.

Knowledge needed to develop blockchain with Python

Understanding the following 3 technologies is especially important for understanding blockchain.
Hashing
P2P network
Consensus algorithm

2.1. Hashing

Translated literally, "hash" means "a mixture." It refers to irreversibly converting data into a fixed-length hash value.

As opposed to reversible conversion, where converted data can be restored to its original form, this is called "irreversible conversion" because it cannot be reverted.
The hash used in blockchain refers to the cryptographic technology needed to identify data. A hash function can derive a unique hash value for a given piece of input data.

Regardless of the length of the original data, the hash value always returns the same value for the same input. In other words, you can immediately detect whether the original data has been tampered with.

It is thanks to the hash function that blockchain is so robust in terms of security.

2.2. P2P Network

Blockchain networks use the P2P (Peer to Peer) method. "Peer" means "companion" or "equal." It means that peers are connected to other peers.

Because many peers (computers) are connected together, there's the advantage that even if one computer fails, it has no impact on communication.

In addition, the P2P model can distribute the load placed on each individual machine. This is because, unlike the client-server model described earlier, processing is not concentrated on a single server. Even if many peers are added, the scope of any impact remains limited.

Furthermore, the reason blockchain uses the P2P network model is that it is decentralized. To understand the downsides of centralization, think of companies like Google and Facebook. Data ends up being handed over to a handful of large companies, who can then use it freely.

2.3. Consensus Algorithm

A consensus algorithm is an algorithm that reaches agreement whenever a blockchain adds a new block.

As mentioned earlier, because blockchain shares the transaction ledger among everyone on the network, overall consensus is required.

Proof of Work (PoW), used by Bitcoin and others, is the most representative consensus algorithm, but there are several other methods as well.
It's precisely because of consensus algorithms that transactions using blockchain can be guaranteed.

4. Flow of developing blockchain with Python

The following steps are needed for the flow of developing a blockchain using Python.

4.1. Creating the blockchain

Build the links that connect blocks to one another.

4.2. Creating a wallet

"Wallet" means a purse. While it shares some similarities with a physical wallet, a wallet in blockchain refers to a wallet address used to transact cryptocurrency.

4.3. API Integration

Integrate the API using a Python framework.

4.4. Building the blockchain network

Turn the connections between blockchains into a network.

5. For blockchain development, choose Miichisoft

Founded in 04/2018, Miichisoft has now grown to 170 employees. Recognized for strong technical capabilities, it has won the Sao Khue Award, hosted by the Vietnam Software and IT Services Association, two years running. With bridge engineers who deeply understand Japanese language and culture, you can entrust your work to us without communication worries.

Miichisoft has worked on system development across many fields, including blockchain. We flexibly handle projects from small to large scale, so feel free to contact us once you start considering blockchain development.

6. Summary

Above, we introduced blockchain development with Python.

We hope the information in this article will be useful for how you engage with blockchain going forward, in both your work and daily life.