After reading this article, you have so much knowledge about the blockchain, so you can pass it on to others as well.
Before learning about blockchain technology, first learn what blockchain means.
A blockchain is a distributed system of immutable records called blocks, which are secured using cryptography. A block is a record book that contains the details of a transaction data. A distributed ledger that holds a collection of interlinked blocks along with a block hash is called a "blockchain."
It was launched only ten years ago and has the potential to replace the existing system and become the foundation of global record-keeping systems. It was created by the unknown person behind the online cash currency, bitcoin, under the pseudonym of Satoshi Nakamoto.
A cryptographically secured chain of blocks is described for the first time by Stuart Haber and W Scott Stornetta
Computer scientist Nick Szabo works on ‘bit gold’, a decentralised digital currency
Stefan Konst publishes his theory of cryptographic secured chains, plus ideas for implementation
Developer(s) working under the pseudonym Satoshi Nakamoto release a white paper establishing the model for a blockchain
Nakamoto implements the first blockchain as the public ledger for transactions made using bitcoin
The potential of blockchain technology for other financial and collaboration transactions is studied after it is cut off from the cryptocurrency. The term "blockchain 2.0" is introduced, alluding to uses beyond cash.
The Ethereum blockchain architecture inserts computer code into the blocks to represent securities like bonds. These are referred to as smart contracts.
Nowadays, the Blockchain is growing and top global companies and various governments are testing Blockchain in the areas of Land Registry, International Trade, Global Trade and Customs, Banking, Automotive,Entertainment, Financial Services, Food & Beverages,Insurance, Oil & Gas, Pharmaceuticals, Retail, Social Media,Technology, Bond and Lending Market, Real Estate, etc.
Blockchain technology began When Satoshi Nakamoto published the Bitcoin whitepaper, he essentially introduced blockchain technology to the world. Back then, cryptocurrency was the only use case for the blockchain. It was a decentralised ledger that could keep a transparent, permanent record of cryptographic transactions. While blockchain has since been used in a wide range of other areas, it was designed specifically for this digital currency and to advance the goals of digital currencies .
In its earliest stages, blockchain technology set up the basic premise of a shared public ledger that supports a cryptocurrency network. Satoshi's idea of blockchain makes use of 1 megabyte (MB) blocks of information on bitcoin transactions. Blocks are linked together through a complex cryptographic verification process, forming an immutable chain. Even in its earliest guises, blockchain technology set up many of the central features of these systems.
Later on, the developers discovered that a blockchain could do more than just record transactions. For example, the Ethereum creators believed that assets and trust agreements potentially benefit from blockchain administration. In this sense, ethereum is the second generation of blockchain technology.
This "smart" network introduced two revolutionary concepts that completely changed our perception of blockchain technology. The first and most important concept was smart contracts. These smart contracts paved the way for the second revolution, which was blockchain as a digital ecosystem. Several developers will now be able to start their own cryptocurrency projects and applications using Ethereum's smart contract technology. Therefore, more than a cryptocurrency, Ethereum acts as a platform which developers can use to build on. It’s like the blockchain version of iOS or Android, where decentralised apps can be developed and launched.
Scalability is one of the most pressing concerns confronting the blockchain. Transaction processing times and bottlenecking remain a problem for Bitcoin. Many new digital currencies have attempted, with various degrees of success, to modify their blockchains in order to address these challenges. Scalability is likely to be one of the most crucial advances paving the way for blockchain technology in the future. New blockchain applications are being found and implemented all the time. It's difficult to predict where these advancements will take the technology and the wider bitcoin business. Blockchain supporters are likely to find this quite exciting; from their perspective, we are living in an epochal time with an epochal technology that is still growing and unfolding.
Based on the nature of data accessibility, blockchain can be categorised as below:
- Public Blockchain: In this type of blockchain, anyone can read and submit transactions.
- Private Blockchain: -In this type of blockchain, only one organisation or all subsidiary organisations within the same group are allowed to read and submit transactions.
- Community/Consortium Blockchain: -In this type of blockchain, multiple groups of organisations form a consortium and are allowed to submit transactions and read transactional data.
- Hybrid Blockchain: - This is a new category where any of the three (public, private, or community/consortium) blockchains can be combined to facilitate transactions. A Blockchain platform can be configured in multi-mode using Hybrid Blockchain.
It can be classified as follows based on the need for authorization to participate in Blockchain:
- Permissionless Blockchain: - No prior permission is needed to participate in this type of blockchain. Everyone is allowed to participate in the verification process and can join the blockchain network with their own computational power.
- Permissioned Blockchain: - To join this type of blockchain, prior permission is needed. Only authorised parties are allowed to run nodes to verify transactions in the blockchain network.
- Hybrid Blockchain: - There could be a possibility that a node is participating in permissionless and permissioned blockchains together to facilitate interblockchain communication. Such a blockchain could be called a hybrid blockchain. A blockchain platform can also be configured to support permissioned and/or permissionless models.
Increased Capacity : - The most remarkable aspect of this blockchain technology is that it boosts the overall network capacity. Because there are many computers working together, the total power is greater than a few of the devices where things are centralised.
Better Security:- Because there is no single point of failure, blockchain technology is regarded more secure than its contemporaries. Blockchain functions on a well-distributed network of nodes, so data is always circulated via numerous nodes, ensuring that even if one node is hacked or broken in any way, the integrity of the original data is not affected.
Immutability: - Blockchain's distributed ledger is designed in such a way that transactions can only be appended. Each block holds the hash value of the previous block. Thus, any modification in one block will generate a different hash value for the modified block. Therefore, all the next blocks in the chain will also give differenthash values.
Hash Encryption: - A blockchain uses cryptography to ensure that all the data in the blocks is kept secure from unauthorised access and is not altered. The Blockchain uses SHA-256 for encryption. SHA-256 is one of the strongest hash functions available. This cryptographic hash algorithm generates an almost unique 256-bit signature for a piece of text. Blockchains also use digital signatures to validate users.
Proof of work -Bitcoin uses a proof-of-work system. What is proof of work? It is a piece of data that's very hard to produce (meaning it takes a lot of time or costs a lot of money) but can be easily verified by others, and it satisfies specific requirements. With bitcoin, proof of work is a competition among miners who want to add a block to the blockchain—meaning they have to find the nonce value for the block by solving a mathematical puzzle.
Consensus: - Blockchain technologies are particularly effective due to the consensus algorithm. It is an essential element of every blockchain and a distinguishing feature. Simply explained, consensus is a decision-making mechanism for the network's active nodes. Here, the nodes can reach an agreement relatively quickly.
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