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Blockchain Technology

BLOCKCHAIN-Definition, Applications, Working and Future

Blockchain is a database in which data is kept in blocks that are connected together in a chain . Due to the inability to delete or amend the chain without network consensus, the data remains chronologically consistent.

 Blockchain is a decentralised, distributed, and open digital ledger that is used to log transactions across numerous computers in a way that prevents changes from being made retrospectively without affecting all blocks behind them and the network’s consensus.

Blockchain is a database in which data is kept in blocks that are connected together in a chain . Due to the inability to delete or amend the chain without network consensus, the data remains chronologically consistent. In order to manage orders, payments, accounts, and other transactions, you can utilise blockchain technology to establish an unchangeable or immutable ledger. The system provides built-in safeguards against unauthorised transaction submissions and ensures that the shared view of these transactions is consistent.

A blockchain is a specific sort of shared data set that fluctuates from different data sets in that it saves information in blocks that are hence associated by means of cryptography. Another block is made as each new piece of information shows up. The information is anchored together in sequential succession once the block has been loaded up with data and is appended to the block before it. Albeit different sorts of data can be kept up with on a blockchain, an exchange record has so far been its most well known use. Blockchain is utilised in the context of Bitcoin in a decentralised manner, ensuring that no one user or organisation has power but rather that all users collectively maintain control. Since decentralised blockchains have  unchangeable,  information.

READ MORE ABOUT – History Of Blockchain

WHY WE NEED BLOCKCHAIN

There are two major reasons according to Goh. Goh says, “First and foremost is when you want to keep a record of an entire sequence of transactions, especially if you want it to go back all the way to genesis, to the beginning. And secondly, you want that record to be transparent.”

Because the data is transparent which means that everybody has an access to the information stored in a block, there should be an enemy of altering capacity, he says, which is where a cryptographic hash comes in.

But not all blockchains are public, the experts explain. There are also private blockchains, whereby only approved members have access, which is more common in industry, says Goh. The type of blockchain an organization chooses would depend on the type of transparency it needs. And there may be instances where companies don’t want even members to see and control access, in which case they would have a central custodian and end up with a centralized ledger like those before blockchain was created, he says.

“Healthcare ,Supply Chain and finance are the three sectors that would be a  major candidates for blockchain”, Goh added.

APPLICATIONS OF BLOCKCHAIN

Product Tracking 

Today’s global supply networks are extremely challenging to trace and track, according to Chetu’s Sibley. Even with the most advanced technologies, paper trails are challenging to follow, lack transparency, and are susceptible to manipulation by those looking to change specifics of orders. With the use of blockchain technology, everything is possible and food goods have a linear, easier-to-follow trace that cannot be changed. Blockchain technologies not only enable product tracking but also enable consumers to see where their food comes from.

Smart Contract

 Smart contracts are computer programmes or protocols for automatic transactions that are kept on a blockchain.  A American computer scientist Nick Szabo said that  smart contracts are the computerised transaction protocols that carry out contract terms.(“Bit Gold”  a virtual currency was created by Szabo in 1998).

Benefits of using Smart Contracts are –

  • Self-executing contracts known as “smart contracts” are those in which the terms of the buyer-seller contract are written directly into lines of code.
  • In other words, smart contracts automate the execution of contracts so that all parties may quickly discern the result without the need for a middleman or a waiting period.
  •  Smart Contracts makes transactions visible, irreversible, and traceable.

International Wire Transfer

Given the flaws in the current system for handling cross-border payments, blockchain technology and the idea of a distributed ledger have been gaining traction in the banking and finance industry. Banks frequently discuss the distributed ledger blockchain, which has been creating a lot of attention for a while.

Everyone in the network should be aware of what blockchain is and how it may help facilitate international money transfers. As a result, each node in the network will have a complete copy of the entire database or ledger, and any changes to it will need to be properly checked by other nodes or parties in order to validate the change made. Thus, for the ledger to be genuine, a majority of nodes must concur on its status. This would imply that since there are no intermediaries or correspondent banks involved, direct transfers can take place immediately and without worry of manipulation even for cross-border payments. The banks can have a bilateral, transparent, and immutable transfer of value that is decided by the settlement agency thanks to the distributed ledger technology at its core.

Data Storage in Blockchain

A blockchain-based data storage system can provide more security and integrity.

.Decentralized data storage makes it more difficult to hack into and destroy all the data on the network than centralised data storage, which may only have a few redundancy points. Additionally, since access isn’t always dependent on the operations of a single organisation, it means that there is broader access to data. Blockchain data storage can be more reliable and less expensive.

Election through Blockchain

We are just one step away from being able to vote using blockchain technology if personal identifying information is stored on a blockchain. By using blockchain technology, it will be possible to prevent voting fraud and ensure that no one can vote more than once. Additionally, it can increase the number of  voters by making voting as easy as hitting a few buttons on a smartphone. Additionally, the expense of holding an election would significantly drop.

BLOCKCHAIN SECURITY

Blockchain technology enables decentralised security and trust in a variety of ways. To start, new blocks are always chronologically and linearly stored. In other words, they are constantly added to the blockchain’s “end.” It is very difficult to go back and change the contents of a block once it has been approved by the majority of network, nothing can be added to the blockchain.. This is due to the fact that each block has its own hash, as well as the hash of the block that came before it .Hash codes are created by a mathematical procedure that transforms digital information into a string of numbers and letters. If that data has been altered in any manner, then code for hash can also be changed.

Thanks to Hashing because each block in the blockchain has a unique identifier , which means that altering the blockchain will have unavoidable consequences. The header of the block contains information that serves as the block’s identifier. Three Main properties of Hash Function are :

  • They avoid collisions i.e.no two input hashes should correspond to the same output hash, according to this rule.
  • It should be challenging to determine a hash function’s input value from its output.
  • They ought to be suitable for puzzles.

HOW DOES IT WORK

We will understand the concept of blockchain technology with the help of Cryptographic Hasing Algorithm in Bitcoin .Bitcoin is a decentralized digital currency which means that you can buy, trade, and exchange bitcoin directly  without a middleman like a bank.

Blockchain uses the cryptographic hash function to link the blocks in a chain and protect the data of a particluar block. In the blockchain, each block has a hash for both itself and the block before it. Hash is a function that can be used to map data of arbitrary size to fixed-size values.The outputs we will get by a Hash function are Hash Codes. It aids in the formation of a linear chain of blocks that is cryptographically secure. And the combination of these immutable blocks form a Blockchain.

HASHING

A specific algorithm turns input data of any length into a string of a specific length through the process of hashing. And the result we get is referred to as a hash. The hashing technique used for Bitcoin in particular is the Secure Hashing Method 256 bits (SHA-256). This method is a one-way cryptographic function since decryption cannot restore the original data.

Future of Blockchain

Despite the amazing breakthroughs that blockchain brings across industries, it is still a work in progress. Professor Boneh highlights the difficulty of scaling to balance costs and boost usability, the drive toward environmental blockchain and cryptocurrency advancements, and the limitations of generating decentralised, uncollateralized crypto fund lending.

For instance, Rollup techniques are desirable because they are always changing to account for transactional inefficiencies. The rollup coordinator systems were created to help blockchain users save time and space.

According to Boneh, security concerns, concerns about centralization and central points of failure, are all simply addressed and getting better all the time.The debate is also expanded by the use of cryptocurrencies and blockchains in the real world, like China’s central bank’s digital money and Sri Lanka’s decision to recognise Bitcoin as legal tender.

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