Blockchain Technology

 

Blockchain Technology

INTRODUCTION

Beyond its position as the technology behind cryptocurrencies, blockchain is an emerging technology platform for creating decentralised apps and data storage. This platform's fundamental concept is that it enables the creation of a distributed and replicated ledger of events, transactions, and data produced by multiple IT processes with robust cryptographic assurances of tamper resistance, immutability, and verifiability. Even when participants in distributed applications with the ability to transact on the network are untrusted people, public blockchain systems allow us to ensure these qualities with overwhelming probabilities. The implementation of cryptocurrencies like Bitcoin, Ethereum, and others has made blockchain technology more well-known, but the technology itself has a lot more potential in a number of fields, including time stamping, logging important system events, recording transactions, trustworthy e-governance, and more. Numerous academics are focusing on a variety of these use cases, including decentralised DNS, self-sovereign identity management, registry upkeep, health record management, decentralised authentication, and decentralised public key infrastructure.  Additionally, businesses like IBM and Microsoft are creating their own applications in a variety of industries, including the Internet of Things (IoT), etc., even enabling blockchain platforms on the cloud. 

Working of Blockchain:

The working of blockchain technology can be illustrated through one of its applications. Cryptocurrency is one of the applications of blockchain technology, and the working of blockchain technology can be demonstrated through a transfer of cryptocurrency. Let a user ‘X’ wants to send money to user ‘Y’. The process of transfer of money from user ‘X’ to user ‘Y’ is as shown in Figure

Here sender ‘X’ requests a transaction for sending money to the receiver ‘Y’. The requested transaction is broadcasted to the P2P network (it consists of computers known as nodes). This P2P network containing all nodes validates the transaction. Once verified, this transaction is represented as a new block. The new block is then added to the existing blockchain. Thus the transaction is completed, and receiver ‘Y’ receives the money.

The above was the simplest explanation of the working of blockchain. Now see what happens at every stage of the transaction in a bit of detail. When sender ‘X’ wants to send money to the receiver ‘Y’, then ‘X’ should know the wallet address of ‘Y’. The transaction gets initiated as user ‘X’ sends the money to user ‘Y’. Every node of the blockchain will have to verify this transaction. Only then will user ‘Y’ get money in his/her wallet. Thus every node will record this money transaction from user ‘X’ to user ‘Y’. Hence, records will be stored in thousands of computers, but the user may not like his/her transaction information on many computers. This issue is resolved by blockchain by keeping the transaction anonymous.

Types of Blockchain:

Blockchain can be classified into the following three major types. 

•  Public Blockchain 
•  Private Blockchain 
•  Consortium Blockchain or Hybrid Blockchain

Anyone can join and contribute in a public blockchain. It implies that anyone can use a computer, participate in mining, or add new blocks. This guarantees openness in blockchain networks. Because anybody can replicate a public blockchain and participate in block validation, it is also known as a permissionless blockchain. The public blockchains Bitcoin and Ethereum are two instances of.

A permissioned blockchain that is private is appropriate for single organisations. Here, a company controls who is permitted to take part and manage a shared ledger. One instance of a private blockchain is Hyperledger.

A permissioned blockchain known as a consortium blockchain is one that is maintained by a number of different organisations. Blockchain consortiums combine the transparency of public blockchains with the privacy advantages of private blockchains. A hybrid blockchain is another name for a consortium blockchain. A consortium blockchain is exemplified by dragon chain.

PUBLIC Vs PRIVATE BLACKCHAIN

Have you ever pondered what the main justification for using blockchain technology would be? simply because it fosters a high level of confidence among users to protect their data and network operations. Blockchain technology, which was introduced by Satoshi Nakamoto in 2008 and is now being widely used by businesses of all sizes (small, medium, and large), is revolutionising every industry. It is becoming less of a buzzword and more of a mantra for the future as more businesses recognise the transformative potential of this technology and seek to use it for their everyday operations.

Advantages of Blockchain Technology:

Following are the advantages of blockchain technology: 

1.  Decentralization 
2.  Transparent and Anonymous 
3.  Less transaction fees and no taxes 
4. Theft resistant

In just ten years, blockchain technology has advanced quickly from its use in cryptocurrencies like Bitcoin to Industry 4.0, thanks to the advantages and traits outlined above.

For any company or industry, security, transparency, traceability, and automation are some of the most crucial issues. The issues raised above can be resolved by blockchain technology. Blockchain improves security for any business or industry since documents created through it cannot be altered and are end-to-end encrypted. By making personal data anonymous, privacy issues on blockchain can also be resolved.

The distinguishing feature of blockchain technology is decentralisation. With blockchain technology, there is no need for an intermediary or third party. Blockchain technology offers defence against fraud and tampering with this functionality. Additionally, the public ledger contains a record of every transaction made on the blockchain. Transparency is ensured by this.

Understanding Blockchain:

It is a decentralised, distributed public ledger that is composed of a rising number of records that are kept in the form of blocks. In a blockchain, these blocks are linked to one another via cryptography, maintaining the transaction's privacy. A blockchain is a time-stamped collection of immutable (tamper-proof) records of data that are administered by a group of computers rather than a single entity. Every piece of information exchanged on this network is visible to everyone, and each and every user is responsible for their own actions. A democratised system is ideally characterised by a blockchain.

BLOCKCHAIN APPLICATIONS:

Wherever there is a requirement of trust, security, accuracy, and transparency, there is the application of Blockchain technology. Blockchain applications can be vividly seen in the government and public sectors. Governments can use Blockchain in improving record management. Governments keep people’s records like birth and property exchanges. Blockchain can make the record more secure. Decentralized file storage protects files from getting hacked or lost.

The financial sector has seen the benefits of blockchain technology from the very beginning. The most popular application of blockchain technology is cryptocurrency. Other industries and sectors are exploring opportunities actively for the implementation of blockchain technology in their fields and domains.

The applications of blockchain technology in the financial services, Governments and public sectors, healthcare, Industry and Internet of Things (IoT).

Financial Applications:

Banks and other financial organisations are particularly vulnerable to digital payment transfers, identity theft, and money laundering. When it comes to the quality of the services provided and their reputations, these institutions are severely impacted. Blockchain technology is already being used by banking organisations to address their historical issues.

Blockchain Applications in Government:

Land registry data are a common source of issues for governments worldwide. It is challenging to keep track of who owns what amid hundreds of years' worth of land records. Land registry authorities encounter issues such document discrepancies, forgeries, and document loss.

Using blockchain technology, the aforementioned issues can be resolved affordably. Blockchain technology offers safe access, immutable records, and storage in addition to both. Blockchain can be used by governments in the following contexts:

• Record management for secure record-keeping of people 
• Identity management for proof of identity 
• Government services like public safety and welfare
• Payment infrastructures to collect dues, taxes and other payments fast and safe 
• Smart property to digitally record assets

Blockchain Applications in Healthcare:

There has been an increase in the hacking of healthcare records. The year 2018 witnessed the hacking of medical records of 1.4 million patients from the UnityPoint Health hospital network of the USA. The hacked records included sensitive information, including the patient's social security number and insurance information. Blockchain technology provides data security and integrity. Patients, healthcare providers (hospitals, doctors, lab technicians etc.), data analysts and insurance providers are key stakeholders of healthcare. The Distributed Ledger Technology/Blockchain technology in healthcare guarantees the security and privacy of healthcare data of all stakeholders. These stakeholders can share information without compromising data security and integrity.

Blockchain Application in the Internet of Things (IoT):

In IoT applications, smart devices interact with each other using the internet. The biggest concern is the security of data generated by these smart devices within distributed nature of wireless networks. As blockchain is distributed public ledger, it will take care of the security of data generated by smart devices.