A Step-by-Step to build Blockchain Application with Python

Introduction

Blockchain

Blockchain is the Pioneer of Finance and Programming domain. It is a new emerging technology gaining attention from around the world due to its key features such as the decentralized mechanism where there is no central authority that manages the transactions and database. It has a lot to offer in terms of transparency and security.

One may wonder what is Blockchain exactly.

In simple words, Blockchain refers to blocks or files linked together with encryption. This is like a digital chain connected to the rear and after by cryptography rules. This circulates and distributes the transactions in the community where participant nodes use cryptographic mechanisms to agree and maintain integrity.

Blockchain Technology is robust enough to withstand any digital threat and failures making it more suitable for handling cybersecurity risks.

Python in Blockchain

Python is the most dynamic and adapted language. You name any area of software engineering and Python is always the first choice due to its functionalities. It has a clean syntax where you need fewer lines to execute any function as compared to any other language. The simple syntax of Python is beneficial for dealing with errors and bugs. 

Python has a rich ecosystem and multifunctional libraries that accelerate your development journey. For instance, libraries like PyCryptodome, and Hashlib provide cryptographic and computational functions, and frameworks like Flask and Django are useful for APIs and web application interfaces. Whereas libraries like Brownie and Vyper are used for smart contract deployment.

Python can integrate various languages like C++, Java, and Javascript, It also supports multiple API integration.API integration is useful for collaborations with other software, platforms, and frameworks. Python has a big community behind it and a commendable responsive support system from the community. There are very helpful open-source contributions and a data science and analytics platform that makes Python one of a kind.

Audience

Now the real question is how to use Python in developing blockchain applications. 

Worry less! This article is your aid. Here we focus on the usage and integration of Python in Blockchain. All the budding developers can start their journey with this article. 

Worried about having a perfect setup and configuration management? We got you covered! Let’s dive deep into the fascinating world of Building a Blockchain Application with Python.

Setting Up the Development Environment

Before you start development having all the prerequisites is essential. In this section, we’ll walk you through the entire process.

When it comes to configuration, Python has the easiest setup process.

Let us have a look at it in detail:

Installing Python

• Visit the official website and download the latest Python  version: https://www.python.org/downloads/
• Download according to your operating system(Windows, MacOS, Linux)
• It comes with the Python launcher, hence check the installation guide – This will install Python on your system.

Verify installation using the python –version or python3 –version in the command line.(command prompt or Terminal).

Note: Make sure to install the latest version of Python- 3.12 as of now only go for lower versions if there is any need for specific utilities.

Choosing an IDE

Once you are done with installing Python on your system the next thing to look out for is the right development environment. This is a very important step, as choosing a proper IDE without any configuration discrepancies is the base of all your future projects.

There are two main IDEs:

PyCharm: Pycharm was developed by JetBrains, and is the most popular IDE for Python. Pycharm has a wide range of tools to boost your productivity as a developer. 

It serves various features such as smart code completion that completes the code template based on the functions in real time. Pycharm has really got the charm in terms of debugging tools. It provides you with options like stepping over the code, stepping down the entire code, adding multiple breakpoints to see which part of the code is throwing errors, and a console to run smaller parts of the code along with the variable inspection.

Steps to setup Pycharm:

Files→Settings→Project→Your Project→ Project Interpreter and select the appropriate Python version that you had previously installed.

Jupyter Notebook: Jupyter Notebook is an online IDE (web application ). Along with Python, this is also used for text editing. Jupyter Notebook can be run on VSCode remotely along with its extensions.

Steps to set up Jupyter Notebook:

• Open your command line interface: run the command pip install notebook
• Start the Jupyter Notebook by the command: jupyter notebook

Installing Required Libraries

Here are some libraries that enhance your blockchain development experience:

• Flask:  Flask is a framework of Python that is used to build web applications and RESTful APIs.In blockchain, it can be used to create web interfaces like dashboards and DApps interfaces.
  • Intstall flask : pip install Flask
• Requests: Requests is an HTTP library for handling and sending HTTP requests and responses. In blockchain, requests can be useful in connecting with blockchain networks and querying.
  • Install requests: pip install requests
• Pysha3: Pysha3 is the most important library, used for SHA-3 hashing algorithms like SHA3-256 and SHA3-512. Hashing is an invaluable aspect of blockchain technology contributing to its integrity and security.
  • Install pysha3: pip install pysha3
• Web3.py: Web3.py- the maverick of libraries that is highly used and has multiple functionalities like interacting with smart contracts, querying blockchain data, and sending transactions. Web3 is an Ethereum-based library useful for managing transactions.
  • Install web3.py: pip install web3
• Pycryptodome: Pycryptodome is a full-fledged Python package of low-level cryptographic functionalities. This library provides functions for security and data integrity like hashing, encryption, decryption, and other cryptographic operations.
  • Install pycryptodome:  pip install pycryptodome
• Pandas: Pandas is a robust data analysis and manipulation library that has a package of data structures and functions that are useful for analyzing and visualizing blockchain and transaction records.
  • Install pandas:  pip install pandas
• SQLAlchemy: SQL is a database and SQLAlchemy is an SQL toolkit that has object-relational mapping for Python. It supports the database operation and interactions with high-level abstractions. Blockchain being a distributed database itself this library would be used to manage and query the relational database and store the transaction records along with user credentials.
  • Install SQLAlacemy:  pip install SQLAlchemy
• Numpy: Numoy is the widely used library of Python and is well-adapted to various applications. It is used for any numerical operations and supports mathematical entities like arrays, matrices, and a range of functions and operations over them. In Blockchain Numpy can be used for processing and simulating the transaction records and computing the logical algorithms.
  • Install Numpy:  pip install numpy

Understanding Blockchain Concepts

If we were to draw an analogy to understand Blockchain it is like the historical database stored at multiple places all places being equally important and no single entity dominates the network.

If you dive deep and understand the blockchain structure it looks like this:

Blocks(Transactions)——–***Chains***——-Blocks.

It has three components:

• Blocks: Blocks are the cells that hold the  of information or transaction.Block store the list of particular transactions. Blocks can be created or we can say that they can be mined using various consensus mechanisms. Every block has its own set of unique identifiers which are also known as hashing. The hashing technique is useful to encrypt the data in the blocks.
• Transaction: Transactions are the exchange of data currencies within the blockchain network happening across various notes. Transaction details are stored in a block in unison with a set of protocols known as the consensus.
• Chains: As we already know blockchains have an analogy with linked lists having connections in between their blocks. These links are also known as chains. Since each pointer in the linked list is connected through all links same goes for the blocks. These are a series of blocks connected by the hash of the previous block which ensures that be Data integrity and security of the blockchain are maintained. The purpose of the changes just not to serve as the link between the previous and the next block but also to give the links along with hashing and cryptographic principles.

Importance of decentralization, immutability, and consensus mechanisms:

• Decentralization: Decentralization is the most important property of blockchain. In this mechanism, no single entity has control over the entire database which prevents the failure of the blockchain system due to anyone discrepancy. Due to decentralization having a biased system is nearly impossible. Every participant in the device maintains a copy of the blockchain This ensures transparency and inhibits centralized failure or manipulation.
• Immutability: once the data is written into the blockchain it cannot be changed without altering all subsequent blocks. Altering all the subsequent blocks in the blockchain is computationally expensive and very inefficient leading to failure. An alteration to any block needs to be done through cryptographic hashing. Hence all the changes done once can’t be undone making blockchain immutable.
• Consensus Mechanisms:  A set of protocols governing all the necessities of blockchain. All nodes in the network need to agree on the methods. Consensus mechanisms are used to streamline the nodes and ensure all the nodes in the network are on the same page.

Building a Simple Blockchain

Creating the Block Class

In the above code, We have defined a Block class for all the attributes.

Block structure:

• Index: An index is an integer representing the position of the block within the blockchain. Indexing helps identify the order of the blockchain. 
• The Genesis block is the initial block with index=0.
• Timestamp: The time stamp stores the instance at which the block was created in the form of a string. This helps in maintaining the record of the block like when the block was mined or added to the blockchain. 
• Transactions:  These are represented as vectors of Transaction objects, where each Transaction represents a transfer of data or value between participants.Stores all transactions included in the block.
• Previous hash and Hash: Previous hash stores the cryptographic hash of the previous block whereas the hash is a string of cryptographic information jumbled or hashing.

we have used the SHA3-256 method to calculate the hash of the block.

Creating the Blockchain Class

Define a Blockchain class to manage the chain and methods to add new blocks.

In the above code example genesis block – is the first block in the blockchain, get_latest_block- returns the latest block, and add_block- adds a new block.

Implementing Proof of Work

Consensus algorithms are the rules that the participants need to agree upon over adding the blocks and creating new ones onto the network. There are various mechanisms as follows:

Proof-of-Stake: This is based on the stale the validators are ready to have. The higher the stake in exchange for creating or validating the block more the possibility of the validator being selected.

Proof of Work: Proof of Work was first introduced in Bitcoin and since then it has been widely adopted as one of the security mechanisms. In PoW, participants compete against each other to solve a difficult cryptographic puzzle. Proof of Work has several steps in which it works:

• Creating a Block: Miners collect the transactions to be performed and add them up into a block
• Hashing the block: Firstly the Miner specifies a nonce which then is passed through a cryptographic function and the black is hashed with a unique identifier.
• Mining: Mining is repeatedly altering the nonce to find the perfect hash that meets the difficulty requirement of the network.
• Broadcasting the Block: Once you get a valid hash the miner then broadcasts the block into the network and the other participants verify it.
• Adding the Block to the Blockchain: If the block is found to be valid then it gets added to the Blockchain and the miner is rewarded.
• Adjusting the difficulty: The network periodically adjusts the difficulty of the PoW puzzle to ensure that blocks are mined at a consistent rate, despite changes in total computational power.

Others: There are other algorithms such as DPos known as Delegated Proof of stake where the delegates are elected and the other one is Byzantine fault tolerance(PBFT).

Adding Proof of Work to the Blockchain

Modify the Block class to include a proof attribute and a proof_of_work method:

Updated the Blockchain class to validate the proof via the add_block function.

Creating a Simple Blockchain API with Flask

1. Setting Up Flask

Install Flask:
pip install Flask

2. Building the API

Create a Flask app and define endpoints for adding blocks and viewing the blockchain.

Running and Testing the Application

1. Running the Flask App

Run the Flask app:(in your command line )
python app.py

2. Testing with Postman

Add a block: curl -X POST -H “Content-Type: application/json” -d ‘{“data”: “Some data”}’ http://localhost:5000/mine

View the Blockchain: curl http://localhost:5000/chain

From the above comments, the application would be hosted on localhost:5000/chain

Live Example of Building a Blockchain Application

1. Step-by-Step Execution

Below is given a live and full stack of all the operations involved for developing the blockchain application: