Blockchain is the making part of cryptography. In cryptography there are units called blocks which carry the history and previous records. A block contains the following units,
-Cryptographic hash of the previous block
So it’s a chain of all these blocks that carry the information.
It was first invented as part of crypto currency by a pseudonym Satoshi Nakamoto in the year 2008. It served the crypto currency bitcoin. A blockchain is managed by a peer to peer network using specific protocols for the purpose of inter node communication that leads to the creation of blockchains.
Crypto currency bitcoin made the first digital currency without any central authority behind it, that’s exactly the way it was invented too. Satoshi Nakamoto is not identified. It’s not even clear whether it was one single individual or a group of persons. That’s the pseudonym that was used.
STRUCTURE OF BLOCKCHAIN
The most important aspect of cryptocurrency is the decentralized blockchain that uses public digital ledger to record transactions without the risk of being manipulated. It is very difficult to malign the functioning of blockchain. It allows the users to adjust and control the transactions without any interference of central authority. A blockchain can also maintain title rights, all the options of offer and acceptance is there just like a contract.
Blocks are the units of transactions. It includes the cryptographic hash of the previous block. A blockchain also uses a specific algorithm, and the peers supporting the database have a lot of versions of the history. Blockchains add the transaction value, history, score of the old block into the new blocks and vice versa as well. There are various blockchain types that are used. For example- bitcoin has proof of work.
Various blocks can be produces simultaneous and concurrently. And sometimes separate blocks can be produced concurrently, that is called as temporary fork.
It is a change to the protocol that is used to make the blocks valid that were previously invalid, or the transactions that were invalid. The nodes running previous versions will no longer be accepted by the newest versions. This creates a fork in the blockchain.
TYPES OF BLOCKCHAINS
Public blockchains are the blockchains that has absolutely no restrictions as far as the accessibility is concerned. Mainly in the proof of work algorithm. Certain examples are bitcoin blockchain, Ethereum blockchain etc.
Private blockchains are the blockchains that require permission. One requires permission by the network administrators for it. So there’s one the participant and other the validator. And the access is restricted.
It provides a combination of both the restriction and access. The user can decide what information to keep public and what information to keep private. Hence the users can operate on different blockchains.
TECHNICAL USES OF BLOCKCHAIN
Blockchain is used to create,
Some of the designs include
Proof of work
Proof of existence
- Expedite the transfer of funds from one party to the other.
- Validation of transaction quickly and all the time, it’s an ongoing process.
- 24*7 transaction process that is fast
- Monitoring supply chains
- Quality controlled products
- Insurance industry, peer to peer insurance
The popularity of the blockchain is on the rise with bitcoin, Ethereum, Litecoin and other cryptocurrencies. The only critical point that is raised time and again is the dark market trade ease on the rise, as there is not centralized authority, so it does make the transaction process independent and that results in all the kind of persons managing and handling the affairs illicitly.
But with the emergence of the new technology companies this problem is being sorted out big time. They provide the necessary backing to prevent the increase of such menace practices. They do it by using blockchain tracking services, some crypto changes are done too. And the law enforcement agencies are always kept on par with the pace of the technological prowess to tackle this problem.
AREAS OF USAGE
The most promising feature of these new age digitized version of currency is definitely the absence of any central figure that adds a lot of value and gives a lot of independence to the user. It uses peer to peer blockchain network, so that makes the work independent. However there is a security key network- either public key or private key. A public key is like an address and private key is like a password. It is a very user-friendly network too. And that is what makes it apart from the conventional ways of exchange of transactions.