Introduction to Blockchain. In this article, we will see,
The Goals of Blockchain Technology, Anonymity, Decentralization, Fault Tolerance, Immutability, Transparency, and Trustless. In this blog post, we will delve into the fundamentals of blockchain, exploring its key concepts, benefits, and potential applications.
Introduction to Blockchain
Blockchain provides distributed, decentralized, and immutable digital ledgers that is widely distributed and peer-validated. The contents of these ledgers are also designed to be publicly visible.
Enabling anyone in the blockchain network to independently verify the legitimacy of the data and transactions that the ledgers contain.
Blockchain started as a record keeping system to record the transfer of digital “tokens” or “coins” such as Bitcoin and other cryptocurrencies.
These coins and tokens required a way to keep a record of ownership. Out of the need to create a record of digital ownership, Blockchain was born.
However Blockchain can be a simple record keeping device for any and all kinds of data.
whether that data relates to asset ownership or not.
In Blockchain cryptography is used to protect anonymity. To provide ledger immutability, and to validate claims that people make against assets tracked and managed on the Blockchain.
Blockchain is often described as a new and cutting-edge technology, the truth is Blockchain is nothing more than a creative amalgamation methodologies.
Blockchain makes extensive use of existing computer networking technology, specifically peer-to peer network architectures. Adding a peer-to-peer (P2P) network architectures in the mix increases redundancy and fault tolerance.
The Goals of Blockchain Technology
The design of the blockchain offers certain promises or guarantees that are fulfilled at varying levels. The key concepts include security, trustless-ness, decentralization, distributed ledgers, group consensus and immutability.
Anonymity
Blockchain-based systems are designed to tie asset ownership and transaction creation to an address rather than a real-world identity.
Account addresses are based on public/private keys that are randomly generated, which in theory should provide a level of anonymity. In reality, though, blockchain technology provides pseudonymity, not anonymity.
By collecting publicly available information from the blockchain’s distributed ledger, it may be possible to infer information about an account owner, breaking anonymity.
Decentralization
In a Blockchain system, there will be no central entity or intermediary to control and validate transactions. The data controlling capability is in the hands of users. This feature is known as decentralization.
Blockchain technology uses consensus algorithms, cryptographic primitives, and other tools to replace central authority.
Most blockchain systems are not as decentralized as intended. Blockchain consensus algorithms tend to encourage centralization. For example, Proof of Work miners tend to form pools to guarantee more consistent rewards, and with the Proof of Stake consensus algorithm, the rich get richer and more able to control the blockchain over time.
Why a Decentralized Network?
None of the participants will or have to trust one another. As long as they trust in the integrity and the accuracy of the Blockchain itself they do not have to trust each other.
The image represent a Blockchain network. Each dot on this picture is a node or a miner on the network, keeping a copy of the ledger.
Nodes can go online and offline as they choose, and the network continues to function seamlessly.
When an offline node comes back online it can simply sync back up to the current state of the ledger with the other nodes online. This allows Blockchain to not have a single point of failure or dependency that must be entrusted.
This makes Blockchain, and by extension, P2P architectures ideal for scenarios where network connectivity or uptime is not a guarantee.
Fault Tolerance
Due to the distributed and decentralized nature of Blockchain, the ledger itself is available to nodes, thus making the system highly available as compared to centralized systems (with single point of failure).
Blockchain systems are inherently fault tolerant because of their decentralization.
Theoretically, no node in the blockchain network is essential to its operation, and the network can continue to operate—with greatly reduced performance and security—if only a single node remains online.
However, as blockchains become more centralized, disruptions are easier to accomplish and with higher impact.
Immutability
Once transactions have been added to the Blockchain and validated by the participating nodes that transaction cannot be changed or tampered. This feature is known as immutability.
Blockchains are intended to make a permanent, decentralized appropriated record.
Every hub in the blockchain network is liable for keeping up with its own duplicate of the appropriated record.
In the event that every hub keeps up with its own duplicate of the record, some component needs to exist to keep them from making changes to their duplicates of the record.
The blockchain utilizes hash capabilities, advanced marks, and different calculations to make it infeasible to manufacture blocks and make changes to the record that would be acknowledged by the remainder of the organization.Transparency
Blockchain systems (public Blockchain in particular) are highly transparent.
Anyone can track the transaction history and track transactions, thus making the Blockchain system highly transparent.
All nodes in the blockchain network are responsible for maintaining a copy of the ledger and validating all blocks before including them in the ledger.
This transparency allows anyone to verify the validity of any transaction on the blockchain ledger.
Trustless
Blockchain systems can also be considered as trustless distributed networks.
BC is designed to eliminate the need trust in a centralized authority for trust while still maintaining a trusted ledger.
BC provide a safe and secure way for people to make any type of transaction without having to trust the other party. This concept in Blockchain is known as “trustlessness”
As long as each participant in a transaction can trust in the accuracy and integrity of the ledger there is no additional requirement for trust between them.
Blockchain systems accomplish this to some degree by using Byzantine Fault Tolerant consensus algorithms to maintain a decentralized digital ledger.
Byzantine Fault Tolerant algorithms are resistant against a certain number of traitors and eliminating the need for blockchain nodes to trust in one another. This resistance is augmented by algorithms that reward users for acting honestly and in the best interests of the blockchain.
Blockchain-Definition
“Blockchain can be defined as a data structure that is read only and data cannot be modified.
once it is entered into the Blockchain new data can only be appended at the end of Blockchain
making Blockchain highly immutable!”
Blockchain- Process
For right now, simply think of Blockchain as the following simple process:
- An announcement is made before multiple witnesses (nodes, miners, validators, etc.).
- Each participant documents the announcement in their own personal copy of the ledger.
- Announcements are grouped together in “blocks”.
- Each participant to compare their current block with block of all the other on the network.
- The current block majority of participants have in common, this version is considered to be the truth.
- Participant have not the same data as the majority will simply discard their copy, obtain a copy from participant.
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