In continuation with my Learning Series; adapted from a motivating and inspiring write-up which I felt would be very useful for both students and the Society as a whole with day – to – day instances, to encourage positive thinking and improve efficiency !!
A blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively, without the alteration of all subsequent blocks.
Depending on the need of the application, Blockchain can be divided into: Public Blockchains, Private Blockchains, Consortium Blockchains and 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). 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.
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. Dragonchain uses Interchain to host transactions on other blockchains. This allows users to operate on different blockchains, where they can selectively share data or business logic. Other blockchains like Wanchain use interoperability mechanisms such as bridges. By submitting the hash of a transaction (with or without the sensitive business logic) on public blockchains like bitcoin or Ethereum, some of the privacy and blockchain concerns are resolved, as no personal identifiable information is stored on a public blockchain. Depending on the hybrid blockchain its architecture, multicloud solutions allow to store data in compliance with General Data Protection Regulation and other geographical limitations while also leveraging bitcoin’s global hashpower to decentralize transactions.
In recent years, there is a lot of buzz on Blockchain. Many have described this as a most disruptive technology of the decade. Especially, the financial markets could be the most affected ones.
The technology is being adapted into many verticals like Healthcare, Medicines, Insurance, Smart Properties, Automobiles, and even Governments.
However, so far the most successful implementation of Blockchain is the Bitcoin – A Peer-to-Peer Electronic Cash System, which incidentally is also the first implementation of blockchain technology. Thus, to understand blockchain technology, it is best to understand how Bitcoin System is designed and implemented.
A blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Blockchain has been in a lot of buzz these days. And that is mainly because it is backbone of the very famous cryptocurrency in the world – the Bitcoin. Many Governments and leading Banks have decided to bring many of their conventional transactions based on Blockchain concept. The applications and potential of this framework is huge and is considered to be changing the way transactions are made in various domains.
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, but the end goal is to reduce reliance on big corporations like Google and Facebook, who also explore ways to bring internet to everyone through satellites in space.
Other uses: Blockchain technology can be used to create a permanent, public, transparent ledger system for compiling data on sales, tracking digital use and payments to content creators, such as wireless users or musicians. In 2017, IBM partnered with ASCAP and PRS for Music to adopt blockchain technology in music distribution. Imogen Heap’s Mycelia service has also been proposed as blockchain-based alternative “that gives artists more control over how their songs and associated data circulate among fans and other musicians.”
New distribution methods are available for the insurance industry such as peer-to-peer insurance, parametric insurance and microinsurance following the adoption of blockchain. The sharing economy and IoT are also set to benefit from blockchains because they involve many collaborating peers. Online voting is another application of the blockchain.
Other designs include: Hyperledger is a cross-industry collaborative effort from the Linux Foundation to support blockchain-based distributed ledgers, with projects under this initiative including Hyperledger Burrow (by Monax) and Hyperledger Fabric (spearheaded by IBM)
Quorum – a permissionable private blockchain by JPMorgan Chase with private storage, used for contract applications
Tezos, decentralized voting.
Proof of Existence is an online service that verifies the existence of computer files as of a specific time