Blockchain technologies and applications
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Blockchain technology has gotten into a lot of news lately, but it's mostly because of its use in cryptocurrencies such as bitcoin. The capabilities of this technology are not limited to the development of new techniques of use in the form of digital tokens but extend far beyond that.
It enables people to implement technologies that were impractical earlier. A distributed ledger technology is another name for blockchain. Because of its features of transparency, security, and scalability, it is projected to bring a revolution in the realm of economics by disrupting it on a worldwide scale.
Bitcoin, a digital currency called the "digital gold" of the twenty-first century, experienced an unprecedented meteoric climb in 2017. Almost everyone has heard of Bitcoin by now, but few people are aware of Blockchain technology, which is used to develop all cryptocurrencies and provides the framework for the existence of Bitcoin and other cryptocurrencies.
To have a thorough intellectual knowledge of the cryptocurrency system, you must first comprehend what Blockchain is and how it can be utilized to fundamentally disrupt every part of life as we know it.
What is BlockChain?
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A blockchain is a growing collection of cryptographically connected documents known as blocks. A cryptographic hash of the preceding block, a timestamp, and transaction data are all included in each block (generally represented as a Merkle tree). The timestamp validates that the transaction data existed when the block was published to get into the hash.
Although each block contains information about the one before it, they form a chain, with each new block reinforcing the preceding ones. As a result, blockchains are resistant to data tampering since the data in any given block, once recorded, cannot be changed retrospectively without affecting all subsequent blocks.
Blockchains are often administered via a peer-to-peer network for use as a publicly distributed ledger, with nodes communicating and validating new blocks using a protocol. Although forks are possible, blockchain records can be deemed secure by design, and they demonstrate a distributed computing system with excellent Byzantine fault tolerance.
In 2008, a person (or group of persons) going by the name Satoshi Nakamoto created the blockchain to serve as the public transaction record for the cryptocurrency bitcoin. Satoshi Nakamoto's true identity is still unknown. Bitcoin became the first digital currency to address the double-spending problem without the use of a trusted authority or central server when the blockchain was created.
How Does it Work?
When a new transaction or an edit to an existing transaction is received in a blockchain, the majority of the nodes in the blockchain implementation run algorithms. This is done to assess the data that has come in and to double-check the history of the blockchain block that the transaction has suggested. To complete the transaction, the majority of nodes must agree that the history and signature are correct.
After that, the new block of transactions is entered into the leger, and a new block is added to the transaction chain. On the other hand, if a majority of nodes oppose the addition or alteration of the ledger, the transaction will be rejected from the chain. Blockchain can be run on a distributed ledger because of the distribution agreement or disagreement between the nodes. This means it can function without a centralized authority basis and can instead validate its transactions.
Distinguishing characteristics of Blockchain
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Decentralization
The blockchain reduces a variety of dangers associated with data maintained centrally by storing it across its peer-to-peer network. Ad hoc message passing and distributed networking may be used by the decentralized blockchain. A so-called "51% hack," in which a central entity gains control of more than half of a network and can change that single blockchain record at will, allowing double-spending, is one risk of a lack of decentralization.
In a decentralized system, every node possesses a copy of the blockchain. Massive database replication and computational trust ensure data quality. There is no single "official" copy, and no user is "trusted" more than another. Software is used to broadcast transactions to the network. Messages are delivered as best as possible. Mining nodes verify transactions, add them to the block they're working on, and then broadcast the finished block to other nodes. To serialize updates, blockchains employ various time-stamping systems, such as proof-of-work.
It cannot be manipulated
The linked list of cryptographic hashes prevents anyone from altering any information that has been posted on the Blockchain. The types of transactions that can be carried out are decided amongst parties and stored in the Blockchain as "smart contracts," which ensures that the asset transfer will be guaranteed by the Blockchain once each party has completed their part.
The strength of Blockchain arises from the fact that every node in the network verifies each transaction. The ledger is unchangeable, and the entire network, which includes tens of thousands of nodes, secures and verifies it.
Smart contracts
Smart contracts on the blockchain are suggested contracts that can be partially or entirely implemented or enforced without the need for human intervention. Automated escrow is one of the key goals of a smart contract. Smart contracts have the advantage of not requiring the services of a trusted third party (such as a trustee) to act as an intermediary between contractual parties; instead, the blockchain network executes the contract itself.
This could reduce friction between entities when transferring value and, as a result, allow for more transaction automation. According to an IMF staff debate, Smart contracts based on blockchain technology, might reduce moral hazards and enhance the use of contracts in general.
Transaction History That Can't Be Changed
The immutability of the information stored on the blocks is a major feature of the Blockchain. A transaction cannot be modified once it has been completed and saved on Blockchain. You can track transactions to verify their status, but you can never change the original transfer.
Every node in the network has its own identity, an immutable copy of the ledger, ensuring that the record of investment provenance is always complete. Each record's entire transaction history is always available: where it has been and what has happened throughout its digital life.
Applications Of Blockchain Technology In Various Industries
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Financial
Blockchain may pave the way for a safe and transparent transaction medium that eliminates the need for a middleman. The financial services industry is taking advantage of the technology's secure and transparent environment and is thereby leading the way with blockchain.
Deloitte is one such company that is working with clients to develop a system called "Smart Identity" that would help banks and other companies simplify the KYC process. The technology is also used in the insurance industry, as well as financial institutions, exchanges, and other businesses.
Healthcare
Blockchain has the potential to transform the healthcare industry by improving the privacy, security, and interoperability of patient data. It has the potential to address many of the industry's interoperability issues and enable secure data sharing among the many companies and persons engaged in the process.
It removes third-party influence while also avoiding overhead costs. Healthcare records can be kept in distributed databases using Blockchains by encrypting them and using digital signatures to assure privacy and validity.
Commercial
In the business realm, Factom and Everledger are two startups that are using blockchain. Factom focuses on data security and is working on a land registry project as well as data infrastructure initiatives for 80 smart cities.
Everledger is a blockchain business that focuses on the identities of nodes involved in transactions. One of the advantages of blockchain nodes is that the history linked with them cannot be changed, making them more trustworthy. The company uses the history of transactions to verify records for insurance companies and law enforcement organizations.
Government
The power of blockchain technology to transform government operations and services is undeniable. It has the potential to significantly improve data transactional difficulties in the government sector, which now operates in siloes. The correct connecting and sharing of data with Blockchain allows for better data management across departments. It increases openness and makes it easier to monitor and audit transactions.
Travel and Hospitality
The use of Blockchain in the travel and hotel business has the potential to revolutionize the industry. It can be used for money transactions, keeping crucial documents such as passports and other identification cards, making reservations, maintaining travel insurance, and rewarding loyalty.
Key Challenges of using Blockchain Technology
The primary problems of implementing Blockchains in businesses other than financial services include a lack of awareness and understanding of the Blockchain concept and how it works. The difficulties connected with legacy infrastructure in enterprises, as well as a lack of sufficient technical awareness, are important roadblocks to Blockchain adoption in the mainstream.
Adopting Blockchain also needs a culture shift away from traditional methods of doing things, as it decentralizes the entire process. Compliance with existing rules and maintaining the required data privacy and security for shared databases are important hurdles to Blockchain adoption.
Reference list
Blockchain Technology by happiest minds,
https://www.happiestminds.com/Insights/blockchain/
Blockchain and its Applications by Vedang R. Vatsa at startup India,
https://www.startupindia.gov.in/content/sih/en/bloglist/blogs/Blockchain_Applications.html
6 Ways Blockchain Technology Delivers a Glimpse of Future Innovation in Today's World by Oleg Spilka at DZone,
https://dzone.com/articles/6-ways-blockchain-technology-delivers-a-glimpse-of
A quick glimpse of Blockchain and its Revolutionary Applications by Paul Bryzek at medium.com,
Blockchain Wikipedia,
https://en.wikipedia.org/wiki/Blockchain
By AJEET SINGH,
I am Ajeet Singh possessing a year of experience in developing content for various blogs and websites. Leveraged passion for keeping up-to-date with developments in the digital and social media landscape helped me crave my path for coming up with better content. However, I am pursuing my Engineering in Computer Science. Also, I do have my own website(MYBOOKFLEX) where I put reviews of different kinds of books.
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