What is Block Chain?
A Block chain is a growing list of records, called blocks, which are linked using cryptography. Cryptography is the method of protecting data through the use of code. Block chain which are readable by the public are widely used by crypto currencies. Private Block chain has been proposed for business use. Some marketing of Block chain has been called “snake oil.”
Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. By design, a Block chain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”. For use as a distributed ledger, a Block chain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority. Though Block chain records are not unalterable, Block chain may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been claimed with a Block chain.
Block chain was invented by Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the crypto currency Bitcoins. The invention of the Block chain for Bitcoins made it the first digital currency to solve the double-spending problem without the need of a trusted authority or central server. The Bitcoins design has inspired other applications
STRUCTURE:
A Block chain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the consensus of the network. This allows the participants to verify and audit transactions inexpensively. A Block chain database is managed autonomously using a peer-to-peer network and a distributed time stamping server. They are authenticated by mass collaboration powered by collective self-interests. The result is a robust workflow where participants’ uncertainty regarding data security is marginal. The use of a Block chain removes the characteristic of infinite reproducibility from a digital asset. It confirms that each unit of value was transferred only once, solving the long-standing problem of double spending. Block chain have been described as a value-exchange protocol. This Block chain-based exchange of value can be completed quicker, safer and cheaper than with traditional systems .
TYPES OF BLOCKCHAIN:
Currently, there are three types of Blockchain networks – public Blockchain, private Blockchain and consortium Blockchain.
Public Blockchain – A public Blockchain has absolutely no access restrictions. Anyone with an internet connection can send transactions (disambiguation needed) 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 Blockchain are Bitcoins and Ethereum
Private Blockchain –A private Blockchain is permissioned. One cannot join it unless invited by the network administrators. Participant and validator access is restricted. This type of Blockchain 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.
Consortium Blockchains – A consortium Blockchain is often said to be semi-decentralized. It, too, is permissioned but instead of a single organization controlling it, a number of companies might each operate a node on such a network. The administrators of a consortium chain restrict users’ reading rights as they see fit and only allow a limited set of trusted nodes to execute a consensus protocol.
INDUSTRIES USING BLOCK CHAIN
- IBM
- Infosys
- TCS
- PIT Solutions
- UST
- BANKING INDUSTRIES
