BLOCKCHAIN TECHNOLOGY
What is Blockchain Technology?
This is a modern technology that uses the technique of creating a growing list of online transaction that is entered into a record Or Ledger, called "BLOCKS", which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree).By design, a blockchain is resistant to modification of the data. It is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way". For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority. Although blockchain records are not unalterable, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been claimed with a blockchain.
HISTORY OF BLOCKCHAIN
Blockchain was invented by a person (or group of people) using the name Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin. The identity of Satoshi Nakamoto is unknown. The invention of the blockchain for bitcoin made it the first digital currency to solve the double-spending problem without the need of a trusted authority or central server. The bitcoin design has inspired other applications and blockchains which are readable by the public are widely used by cryptocurrencies.
USES OF BLOCKCHAIN
Blockchain technology can be integrated into multiple areas.
- Cryptocurrency
The primary use of blockchains today is as a distributed ledger for cryptocurrencies, most notably bitcoin.
- Smart contracts
- Blockchain with video games
- Blockchain in space
Several blockchain companies have taken blockchain to space. Spacechain launched two nanosatellite-based blockchain nodes into orbit in February and October 2018. Its first use case is decentralized storage of data and files in space.
- Financial services
Major portions of the financial industry are implementing distributed ledgers for use in banking and according to a September 2016 IBM study, this is occurring faster than expected.
Banks are interested in this technology because it has potential to speed up back office settlement systems. Banks such as UBS are opening new research labs dedicated to blockchain technology in order to explore how blockchain can be used in financial services to increase efficiency and reduce costs.
TYPES OF BLOCKCHAIN
We Currently have at least four types of blockchain networks —
- public blockchains
- private blockchains,
- consortium blockchains
- hybrid blockchains.
- Public blockchains
A public blockchain has absolutely no access restrictions. Anyone with an Internet connection can send transactions to it as well as become a validator (i.e., participate in the execution of a consensus protocol).[self-published source?] Usually, such networks offer economic incentives for those who secure them and utilize some type of a Proof of Stake or Proof of Work algorithm.
Some of the largest, most known public blockchains are the bitcoin blockchain and the Ethereum blockchain.
- Private blockchains
A private blockchain is permissioned. One cannot join it unless invited by the network administrators. Participant and validator access is restricted.
This type of blockchains can be considered a middle-ground for companies that are interested in the blockchain technology in general but are not comfortable with a level of control offered by public networks. Typically,they seek to incorporate blockchain into their accounting and record-keeping procedures without sacrificing autonomy and running the risk of exposing sensitive data to the public internet.
- Consortium blockchains
A consortium blockchain is often said to be semi-decentralized. It, too, is permissioned but instead of a single organization controlling it, a number of companies might each operate a node on such a network. The administrators of a consortium chain restrict users' reading rights as they see fit and only allow a limited set of trusted nodes to execute a consensus protocol.[citation needed].
- Hybrid blockchains
A hybrid blockchain simply explained
is a combination between different characteristics both public and private blockchains have by design. It allows to determine what information stays private and what information is made public. Further decentralization in relation to primarily centralized private blockchains can be achieved in various ways. Instead of keeping transactions inside their own network of community run or private nodes, the hash (with or without payload) can be posted on completely decentralized blockchains such as bitcoin.
is a combination between different characteristics both public and private blockchains have by design. It allows to determine what information stays private and what information is made public. Further decentralization in relation to primarily centralized private blockchains can be achieved in various ways. Instead of keeping transactions inside their own network of community run or private nodes, the hash (with or without payload) can be posted on completely decentralized blockchains such as bitcoin.
REFERENCES
https://en.m.wikipedia.org/wiki/Blockchain
Morris, David Z. (15 May 2016). "Leaderless, Blockchain-Based Venture Capital Fund Raises $100 Million, And Counting". Fortune. Archived from the original on 21 May 2016. Retrieved 23 May 2016.
Project Bletchley Whitepaper Archived 11 January 2017 at the Wayback Machine, Microsoft, 2016-09-19. Retrieved 2016-12-24.
"The future of blockchain in 8 charts". Raconteur. 27 June 2016. Archived from the original on 2 December 2016. Retrieved 3 December 2016.
Comments
Post a Comment