More about blockchain:
Blockchain is the distributed ledger which is completely open to everyone. It is a chain of blocks which stores the data in it. The concept of blockchain was introduced first in 1991 by Stuart Haber and W. Scott Stornetta. But the first blockchain was developed and implemented by a person or group of persons named Satoshi Nakamoto. No one knows who Satoshi Nakamoto is. The identity is hidden and yet to be disclosed. Many people came forward and claimed to be Satoshi Nakamoto but failed to prove it. Satoshi Nakamoto created first digital currency which is called as Bitcoin with the help of blockchain and helped the world to enter in the world of crypto currency and decentralization.
Each block in the blockchain contains
ii. Hash of the block
iii. Hash of the previous block
Now let us understand what Hash stands for. You can compare Hash with your fingerprint. Every person has unique fingerprint and that cannot be altered. Same is the case with Hash. Hash is unique per block and it contains the information about the transaction such as amount, date etc. As each block contains the hash of the previous block, this effectively creates the chain of the blocks and hence its blockchain.
Basically, blockchain works under one mechanism which is known as proof of work. When a transaction is recorded on block, everyone in the network has the copy of the block. Once all the nodes provide the acceptance that block gets added to the blockchain. In other words, all the nodes provide the proof about their acceptance. This is how proof of work mechanism is carried out.
Where blockchain can be used?
Now a days, blockchain is being used as a decentralized and distributed ledger for cryptocurrencies. Bitcoin is one of the top cryptocurrencies which uses blockchain to make tranasactions. But there are many other ways where blockchain can be implemented. Here are few of them:
1. Land registration: Suppose you have bought a piece of land and the registration is done manually. Manual registrations can be easily altered and this gives rise to fraud and corruption. Now let's understand the use of blockchain here. Suppose the registration is done and data is stored on blockchain. As we know the data on the blockchain is irreversible and if any node in the network tries to alter it, it requires a consensus of more than 50% which is impossible. So data is stored securely and unchanged. This is how frauds and corruption can be minimized.
2. Smart contracts: As we are living in the world of smart technologies, we also have something called smart contracts. Smart contracts are blockchain based and can be implemented without any intervention of human. Ethereum blockchain is the best example smart contract.
3. Food and supply chain: Recently government of Kerala(India), has announced that they will be implementing blockchain in food and supply chain business.
4. Ecommerce: Japan is the first country which has officially legalized use of bitcoins. You can buy anything by transacting using bitcoins there. Many e commerce websites and businesses in Japan accept payments in bitcoins which is faster than the traditional mode of payments.
5. Public elections: Voting method can be decentralized by use of blockchain. Blockchain can store the votes and it is highly impossible to tamper with it.
Types of Blockchain:
1. Public blockchain: As the name indicates, access to this type of blockchain is public. There are absolutely no access restrictions. Anyone can send transactions, validate it, receive it over the internet. Anyone can become part of the network by mining the coins. Best example of this type of blockchain is Bitcoin and Ethereum.
2. Private blockchain: This type of blockchain has access restrictions. If anyone wants to access the blockchain, it needs an approval from the company using it. This is also known as permissioned blockchain. Companies use this blockchain to ensure data integrity and confidentiality. Ripple is an example of private blockchain.
3. Consortium blockchain: This is also known as semi decentralized or partiallly decentralized. This type of blockchain is not controlled by single organization but by multiple entities and anyone who needs access to this blockchain needs approvals from all the companies controlling it.
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