You might have come across the word blockchain a million of time. Some people have deep understanding of the blockchain concept. Whereas some people are still not even aware about this technology. CoderzColumn team takes keen interest this trending technology. Through this article we will help millions of readers to have better understanding of the concept. You wil know just know about the blockchain but also its fundamentals, benefits and steps included in the process.
Understanding The Fundamentals Of Blockchain
Understanding The Working Of Blockchain
What Are The Benefits Of Blockchain?
Blockchain refers to the system that aims to maintain and record information in a way that makes it difficult or impossible to change, hack, or cheat the system.
The blockchain is basically a digital ledger that contains the details of allthe transactions. The digital ledger is transformed into multiple copies ans distributed across the computer network. Every block in the entire chain will contain multiple transactions. Whenever a new transaction occurs or takes place in the blockchain, a record will be added. This record will be stored in the individual’s digital ledger. The decentralised database will take the responsibility to manage the records of several individuals. It is called as the Distributed Ledger Technology. It is popularly known as DTL.
Considering blockchain, it is a kind of DTL. Blockchain maintains a record of all the transactions in the immutable cryptographic signature called a hash.
In simple words, if there is any change in any one of the blocks on the network, it will reflect that it has been tempered with. Even if the hackers are trying to corrupt a single block, the would have to identify every duplicate block present in the network and make similar changes to each one of them.
You would observe that Blockchains such as Bitcoin and Ethereum are consistently growing. The demand of the Blockchain technology is increasing because it improves the security of the ledger.
Most people often think that why blockchain is becoming so popular? Well, it does offer security but still there is so much hype around blockchain.
In the past, there have been many instances where people tried to create digital money. It could be used for wide range of transaction across the globe. But they all failed. There were alays trust issues with the digital money. Blockchain technology proved to be the best.
For instance, if any random person creates a digital currency XYZ. How will you trust it? You will always have a though in the back of mind that your money can be stolen or misused.
The most popular cryptocurrency or digital currency, Bitcoin was designed to resolve various issues using a specific type of database called a blockchain. Till now, the developers have been using SQL databases and similar to it. For such databases, there are people who manage it. You have to add entries, delete and make other changes to the databases. In the blockchain technology, no one is the incharge of the database. It is entirely run by the people who are using it. In simple terms, you cannot fake bitcoin, right? More importantly, you cannot hack it or steal it. When people own digital currencies like bitcoin, there is trust associated with the value.
Every business or organization runs on the customer and client information. The faster the information you get, the better revenue you can generate. Moreover, you need to ensure that the information received is accurate. Taking into consideration all the features of blockchain, it turns ou to be the most effective way of delivering information. You get accurate information accurately. The information is shared and transparent which is immutable and stored with complete encryption. Any individual present on the network and have permission to access the information.
Blockchain network is so powerful that it will help you to track down orders, business processes, payments, production and much more. Only the members wil have the single view of all the true and accurate data. They have the access to view the data from end to end. It will offer you confidence in the technology, create opportunities. It is a system that is completely transparent and provides protection from data breaching.
Presenting The Block Of Data:
Transactions occurs every inute and every second. Evey transaction is recorded into a ‘block’ of data. These transactions are effective in displaying the movement of allt he assets linked to it. It does not matter whether the assets are tangible or non tangible. A tanglible assest can be a products and a non-tanglible assest is intellectual properties. Well, the block can be used for recording information of your choice.
Every Block Is Linked To One Another:
The technology is called blockchain due to this reasons. Every block in the nwetrk is connected to the block before and after it. These blocks forma chain. Every block in the chain confirms to a specific time and sequence of the transactions that occur. The connection of the blocks is secure together. The chain makes the blocks more secure. The chain helps in preventing the alterig or manipulation of the block data. Moreover, it willalso prevent the insertion of the new block in the predefined chains.
Blockchain makes The Transaction Data Irreversible:
In the distributed or decentralized network, you create multiple copies of the orgiininal block of data. Each block adds higher security strength to the data. Moreover, it will improve the verification process. This explains that the block of data will be immutable. Moreover, you can easily remove the possibility of data manipulation or tampering.
The world is drowned in the buzzword ‘Blockchain’. You already know why it is so important for the modern era businesses. If you consider the business processes, you will get to know that a lot of time, money and efforts goes into maintain backup of the data, creating duplicates of it and storign it safely. But the record keeping systems are vulnerable to the data breach, hacking and data frauds. Due to which, the cyber threats and attacks are increasing on the organizations. If you are limitign the transparency, it will slow down the data verification process. Moreover, the emergence of IoT has exploded the volume of data. How will you manage the data security in the better way. A simple answer to this is Blockchain.
Blockchain Offers Better Trust:
With blockchain, only the members of the network will have access to the data. Moreover, you can assure that the data you receive is not manipulated and accurate. Blockchain data is available to only those whom you have given access.
Blockchain Offers Greater Security To The Data:
You will get the consensus of data. The data is validate, and immutable. Even the system administrator will not have the right to change or delet the data from the blocks.
Blockchain Makes The System Efficient:
The block is shared among members of a network, time-wasting record reconciliations are eliminated. The blockchain will speed up the transactions by using smart contracts. You can store it on the blockchain and execute it automatically.
Blockchain Technology Is Unstoppable:
Once you have programmed the conditions in the blockchain protocol, ou cannot undo it. Even with permission, you will need a lot of tech support. The transaction syou are using cannot be undone or manipulated. It’s going to execute and nothing – no bank, government, or third party – can stop it.
Blockchain Makes The Data Blocks Immutable:
Records on blockchain are irreversible. You cannot change it or even tamper with it. You can use Bitcoin and analyze how it can be hacked. You can use the transactions after adding it to the complex mathematical problem. Just like a mathematical problem, you will have to resolve and verify the consensus mechanism. Every new block of the data has unique features along with specific cryptographic key. You will check the result of the data with previous block’s information. You can use the key being added into a formula.
Blockchain Is Completely Decentralized:
There is no single entity or network who will maintain the entire blockchain network. If you consider centralized banks, teh decisions are taken by the single entity or the person in highest power. But this is not something you will find with blockhains. In this technology, the decisions are made based on the consensus. Decentralization of blockchain is something that makes it trustworthy and transparent.
The Blockahin System Is Affordable:
If you compare the blockchain system with the traditional financial system, you will find ti affordable. In traditional systems, you are paying the banks for the transaction process. In the blockchain technology, you can completely avoid it. The blockchain eliminates these intermediaries and reduces fees, with some systems returning fees to miners and stakers.
Blockchain Is A Peer-to-Peer System:
You can use the blockchain technlogy for the cryptocurrencies like Bitcoin. You can let others to send money directly to anyone. The transactions can take place across the globe. Even if there are transaction fees, they are minimal.
Blockchain Is Open-Source Platform:
Public blockchains refers to the open-source software. You can ensure that anyone can access them to view transactions and their source code. You can use the source code for building your own applications. Moreover, you can suggest right corrections to the code. Your suggestions will be reviewed and consensus will decide whether to accept it or reject it.
You can build a blockchain network in several ways. These are the different types included in the blockchain network. They can be public, private, permissioned or built by a consortium.
Understand The Public Blockchain Networks
As the name suggests, a public blockchain is a network that anyone can join and participate in, such as Bitcoin. Bitcoin has proved that anyone on the network can buy and sell Bitcoins without any hassle. A limitation of Public Blockchain is that it might include substantial computational power required, little or no privacy for transactions, and weak security. These are important considerations for enterprise use cases of blockchain.
Understanding Private Blockchain Nework:
This network is similar to the publick blockchain network. It will have a peer-to peer decentralized networking. But one organization will govern the entire network. The organization will be administrating the participation of individuals, executign a consensus, maintaining the protocols and a shared ledger. Private blockchain network will boost the level of trust and confidence in the system The participants will feel safe to share their transaction data with the members. But every participant needs to obtain proper invitation or permission to join the network.
Permissioned Blockchain Networks
It is for the businesses and organizations who would set up a private blockchain for their circle. It will be a permissioned blockchain network. It means the businesses will ensure who will join their circle. Similar to the private blockchain network, the participants have to obtain proper invitation to join the network and be a part of it.
Sidechain Blockchain Network:
It is a different type of blockchain. In this blockchain, there is a sidechain that will run parallel to the main chain. This blockchain will allow the participants to move their digital assets from one blockchain to another. This will ensure scalability and efficiency of the system. Sidechain is often called a liquid network.
In this type of blockchain, there are multiple organizatiosn that share the responsibility to maintain the blockchain/ The organization swill ensure the security of the data and its feasibility. The organizations will be a deciding body and entail who will submit the transactions and will have access to the data. A consortium blockchain is ideal for business when all participants need to be permissioned and have a shared responsibility for the blockchain.
Having Brief Understandig Of The History Of Blockchain
I assume that you have read the above content, right? So what do you think about Blockchain? Is it just a database? Well, Blockchain is not just a database, it’s refers to the new formed technology that that is enahcing the ‘digital trust’. Moreover, it is helping in the revolutionazation of the way we exchange value and information across the internet. Through the blockchain technlogy, you will be eliminating the ‘gatekeepers’ from the process.
Blockchain history goes back farther than you might imagine, but we’ve condensed it. In this article, we will consider the important aspect of the history of Blockchain. So let’s begin.
In the year 1982, a crytographer named David Chaum proposed the theory of first blockchain-protocol. In the year 1991, Stuart Haber and W. Scott Stornetta studied the concept in deep and wrote about their work on Consortiums. But it was Satoshi Nakamoto (presumed pseudonym for a person or group of people). He was who invented and implemented the first blockchain network. He deployed it for the world’s first digital currency, Bitcoin.
Cryptography is somethign you must know about to completely understand blockchain network, how it works and how digital currencies are formed. Cryptography refers to the fascinating discipline with a history that goes back further than blockchain. For a richer understanding of how cryptography helps blockchain technology, you can check out our different articles listed below.
Well, it is just like internet. No on is the actual owner of the technology. Anyone who is interested in using the technology can use it to run and own their own blockchains.
Nakamoto sent ten bitcoins to Hal Finney, who built the first reusable proof-of-work system in 2004.
Blockchain technology is very deep and conceptual. So do not expect to learn everything about it in the very first time. You can refer to our different articles on Blockchain and its history. Moreover, you can chckeout some of the Crytograpy blocks to have better understanding of the blockchain network and technology. Stay Put and Updated With CoderzColumn Blog For Blockchain Knowldegebase.
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