WHAT IS BLOCKCHAIN?
With the advent of technology, mankind has traversed a lot. From stone tools as being the first technical invention to the latest Artificial intelligence embedded with technologies like blockchain, IoT, DevOps, and many others. Among them the most recent and hot topic of the contemporary time is Blockchain technology – A system believed to pave the path for financial freedom and giving a much-needed liberal system for transactions.
Not so long ago around the ’90s where technological advancements have started taking apace, Blockchain technology comes into existence. It Is a real-time peer-to-peer distributed immutable database. Basically, it is a chain of blocks that are sequentially bound with one another. The block in it basically comprises of few components. First is the Data which is to be stored. Data can be anything be it any transactional information or a particular permanent identity. The second component is the hash of the block. Hashing is the procedure where mathematical functions are used to derive values from a string of text. It Is one way to ensure security during any transmission of the message so that the particular recipient for whom the message was sent can be received successfully without any breach. In short, hashing is a way to take an input string of any length and give an output of a particular length. It also encrypts the data making it unbreachable and worry-free from hackers and fraud. The encryption is made through a complex hashing algorithm which can be decrypted only when the private key is ensured. The final component is the previous hash. It is nothing but the hash value of the preceding block so that it can be enacted in a chain. This type of block is spread bidirectionally making it hard to crack.
Every transaction that records and stores are not labeled as a blockchain. The following are the main characteristics of blockchain.
- Digital: All the information on the blockchain is digitized, thus eliminating the need for manual documentation.
- Distributed: Blockchain distributes control among all peers in the transaction chain, creating a shared infrastructure within an enterprise system. Participants independently validate information without a centralized authority. There is no single point of failure because of how a distributed system operates. Even if one node fails, the remaining nodes continue to operate, ensuring no disruption.
- Immutable: All the transactions are immutable in a blockchain technology-based system. Encryption is done for every transaction covering the time, date, the participants, and the hash to the previous block.
- Chronology: Each block acts like a repository that stores information about a transaction and links to the previous block in the same transaction. These connected blocks form a chronological chain providing a trail of the underlying transaction.
- Consensus-based: A transaction on the blockchain is executed only if all the parties on the network unanimously approve it. Also, consensus-based rules can be altered to suit various circumstances.
- Digital signature: Blockchain enables the exchange of transactional value using unique digital signatures that rely on public keys (decryption code known to everyone on the network). Private keys are codes known only to the owner to create a proof of ownership. This is very critical in avoiding fraud in record management.
- Consistent: Blockchain data is complete, consistent, timely, accurate, and widely available.
- Persistence: Blockchain will not create/persist invalid transactions as determined by consensus. It is nearly impossible to delete or rollback transactions once they are included in the blockchain. Cryptographically, the blocks created are sealed in the chain. It is impossible to delete, edit, or copy already created blocks and put them on the network. This leads to the creation of digital assets and ensures a high level of robustness and trust.
- Anonymity: Each user can interact with the blockchain with a generated address, which does not reveal the real identity of the user.
Blockchains are categorized as public, private, or hybrid based on the application for which it is being taken into consideration. Public and private blockchains resonate as well as disparate based on their method of use.
Here is a quick comparison between them:
This is completely open to the public, so anyone can join the network as a participant. A public blockchain typically uses some kind of mechanism to incentivize participating parties, which encourages a growing number of participants in the network. A public blockchain is open for everyone to read, send transactions and participate in the consensus process. The most prominent examples are the blockchains underlying Bitcoin and Ethereum.
Anyone can participate in a public blockchain, because it is open source and free to all, with no one in charge. There is no access or rights management done for a public blockchain and anyone can be a part of the consensus process. Because of this, anyone at any given point of time can join or leave, read, write or audit the public blockchain ecosystem, and the network will still be trusted.
The private blockchain is the absolute opposite of the public version. Access to a private blockchain is limited to those involved in the creation of that particular network, or those granted access to it by the creators. The internal mechanics of a private blockchain can vary, from existing participants serving as types of administrators who decide on the inclusion of future entrants, to simple observers, but the public cannot access the private blockchain.
In private blockchains, the owner is a single entity or an enterprise, which can override/delete commands on a blockchain if needed. It is not exactly decentralized and is called a distributed ledger or database that uses cryptography to secure it.
It should be able to connect a public blockchain open to every single person in the world, with a private blockchain running in a fully permissioned environment, i.e., limiting the access of available information.
Conducting business over a decentralized hybrid blockchain reduces transaction costs, eliminates data redundancy, and speeds up transaction times.
Whether a blockchain is private or public, the user group that has the access to the information on that blockchain needs to be determined.
Blockchain has made a massive impact on the recent advancement and will be a key player in changing the future for better use. It’s one of the best examples is a cryptocurrency like Bitcoin, Ethereum, etc. Decentralized Data Storage is it’s one of the latest development which keeps the potential for changing the world’s data storage system. It can solve all the Data Storage problems and help us to be the master of our own Data. It can make our data more liberal and delocalized