Blockchain:

In 1991, the term blockchain was coined. Blockchain’s founder was an anonymous person
who goes by the pseudonym Satoshi Naka Moto. For the first time in 2009, the blockchain
was implemented in accordance with bitcoin and bitcoin is a crypto valuta. Due to its open-
source nature, Blockchain has grown geometrically. Bitcoin was the first prominent
blockchain. It is a decentralized technology, an unchangeable ledger for documenting
transactions between two parties. A blockchain is a chain of blocks containing unique data
that solves the problem of double-spending
Core components of Blockchain:
• The Distributed Ledger –
The record of all transactions is a blockchain itself. Bitcoin is the original currency of the
Bitcoin blockchain. It is decentralized, which serves its advantage. Soon we’ll be in a position
to set up and manage our own digital identity, and that’s so fast.
• Peer-to-Peer Networks(P2P) –
Many nodes are linked to the Internet in a clustered way. It Stores the complete
synchronized blockchain edition. At all points of time, each node in Peer-to-Peer networks
agrees to one blockchain state, so that anyone can check a transaction independently. It
works mainly on a decentralized system.
• Consensus Mechanism –
It is built on the Consensus Algorithm and protocol. It is a Process that utilizes protocol and
algorithm so that nodes will agree on the same state of the blockchain without having to
trust one another. It is a series of rules that control the whole network operation and all
core components. Since bitcoin is having a protocol so it is a member of the consensus
Mechanism. Two of the most popular consensus algorithms and their respective incentive
Mechanism are Proof-of-stake and Proof-of-work. To secure the network the Proof-of-work
uses intensive Resource as compare to Proof-of-Stake. A proof-of-work secure the
blockchain. When we combine Ledger and Peer-to-Peer network the result obtained is not
inherently secure and reliable but by using the Consensus Mechanism we can make the
obtained result secure, reliable, and inherently immutable.
• Incentive Mechanism –
The original currency encourages participation in the decentralized network. While
discussing blockchain we can consider an incentive as a transaction, so the transaction has
to be secure, it means we have to check the security of an Incentive by analyzing the mutual
behavior of intermediates nodes. If intermediate nodes are Honest and participate
successfully then they are awarded from a blockchain transaction. An incentive mechanism
is receiver-collusion resistant or a receiver-non competitive resistant, where the receiver
and any party of his neighbours, using any strategic profile other than that, cannot maximize
their anticipated number of utilities.
In simple words,
Blocks, nodes, and miners are the three key components of the blockchain.
So what exactly blockchain means is that the computers linked to each other in a
decentralized manner with the help of which we can achieve cost reduction, History of data,
Data validity & security
• Node — user or computer within the blockchain
• Transaction — smallest building block of a blockchain system
• Block — a data structure used for keeping a set of transactions which is distributed
to all nodes in the network
• Chain — a sequence of blocks in a specific order
• Miners — specific nodes which perform the block verification process
• Consensus— a set of rules and arrangements to carry out blockchain operations

FEATURES:
1. CANNOT BE CORRUPTED
Every node on the network has a copy of the digital ledger. To add a transaction every node
needs to check its validity. If the majority thinks it's valid, then it's added to the ledger. This
promotes transparency and makes it corruption-proof.
2. DECENTRALIZED TECHNOLOGY
The network is decentralized meaning it doesn't have any governing authority or a single
person looking after the framework Instead, a group of nodes maintain the network making
it decentralized. Decentralized technology allows you to keep your assets in a network that
you can access via the internet. An asset can be anything from a contract to a document,
and so on. Through this, the owner has direct control over his account via a key that is
linked to his account, allowing him to transfer his assets to anyone he wishes.
Importance of this feature:
 Less Failure.
 User Control
 Less Prone to Breakdown
 No Third-Party Zero Scams
 Transparency: The decentralized nature of technology creates a transparent profile
of every participant. Every change on the blockchain is viewable and makes it more
concrete.
  Authentic Nature: This nature of the system makes it a unique kind of system for
every kind of person. And hackers will have a hard time cracking it.
3. ENHANCED SECURITY
As it eliminates the need for central authority, no one can just simply change any
characteristics of the network for their benefit. Also using encryption ensures another layer
of security for the system. Because there is no risk of the system being shut down,
blockchain technology has a higher level of security. Even the most secure parts of the
financial system can be hacked. On the other hand, Bitcoin had never been hacked before.
The reason for this is that the blockchain network is safeguarded by a number of computers
known as nodes, which confirm the network's transactions.
4 IMMUTABILITY
The ledger on the network is maintained by all other users on the system. This distributes
the computational power across the computers to ensure a better outcome.
One of the key values of Blockchain is the creation of immutable ledgers. Any centralised
database is vulnerable to being hacked, necessitating faith in a third party to keep the
database safe. Blockchain, like Bitcoin, maintains a never-ending advancing momentum in
its ledgers. Anyone who wants to control the Bitcoin market must have 51 per cent of the
overall market. Although a Hard Fork can change ledgers, it requires widespread agreement
among miners, exchanges, and individual users, as well as node managers. However, there
is a good probability that the old ledgers will be preserved in their original state.
Importance of this feature:
 No Malicious Changes:  As no one can change the ledger and everything updates
real fast, tracking what’s happening in the ledger is quite easy with all these nodes.
 Ownership of Verification: Here, nodes act as verifiers of the ledger. If a user wants
to add a new block others would have to verify the transaction and then give the
green signal. This provides the user with fair participation.
 No Extra Favors: No one on the network can get any special favors from the
network. Everyone has to go through the usual channels and then add their blocks.
It’s not like you have more power so you’ll get more privileges.
 Managership: To make the blockchain features work, every active node has to
maintain the ledger and participate for validation.
 Quick Response: As I said earlier, removing the intermediates quickens the system
response. Any change in the ledger is updated in minutes or even seconds!
5 FASTER SETTLEMENT:
Blockchain offers a faster settlement compared to traditional banking systems. This way a
user can transfer money relatively faster. Traditional banking systems are inefficient
because they require a lot of settlement time, which might take days. One of the primary
reasons for these financial institutions' need to modernise their banking systems is because
of this. Blockchain, which can settle money transfers at extremely quick speeds, can help us
overcome this problem. This saves these organisations a lot of time and money, as well as
providing convenience to the user.
6 INCREASED CAPACITY
This is Blockchain's first and most crucial feature. The most impressive aspect of Blockchain
technology is that it enhances the whole network's capacity. Because a large number of
computers are working together to provide a large amount of electricity, there are fewer
devices where things are centralised. A project initiated by Stanford University that
produced a supercomputer that replicates protein folding for medical research is an
excellent example of this improved capacity.
Here’s a use case that illustrates how Blockchain works:
Hash Encryptions
Blockchain technology uses hash encryption to secure the data, relying mainly on the
SHA256 algorithm to secure the information. The address of the sender (public key), the
receiver’s address, the transaction, and his/her private key details are transmitted via the
SHA256 algorithm. The encrypted information, called hash encryption, is transmitted across
the world and added to the Blockchain after verification. The SHA256 algorithm makes it
almost impossible to hack the hash encryption, which in turn simplifies the sender and
receiver’s authentication

Proof of Work In a Blockchain,

each block consists of 4 main headers.
1.Previous Hash: This hash address locates the previous block.
2.Transaction Details: Details of all the transactions that need to occur.
3.Nonce: An arbitrary number given in cryptography to differentiate the block’s hash
address

4.Hash Address of the Block: All of the above (i.e., preceding hash, transaction details, and
nonce) are transmitted through a hashing algorithm. This gives an output containing a 256-
bit, 64-character length value, which is called the unique ‘hash address.’ Consequently, it is
referred to as the hash of the block. Numerous people around the world try to figure out
the right hash value to meet a predetermined condition using computational algorithms.
The transaction completes when the predetermined condition is met. To put it more plainly,
Blockchain miners attempt to solve a mathematical puzzle, which is referred to as a proof of
work problem. Whoever solves it first gets a reward.

Businesses can profit from blockchain in a variety of ways. Here are some of the qualities
that are present:
• Cryptography, Immutability, Decentralization, Anonymity, Transparency
Application of blockchain:
• For Loans
• For supply chains
• For mortgage
• For identity verification
• Emirate’s business
Advantages of Blockchain:
High security and less fraud Blockchain, Low-cost transaction, Faster processing time, Free
of friction, Assets are controlled by the owner, Verification is independent, More transaction
trusts, It is completely transparent, so it is safer.
Disadvantage of Blockchain:
• Not suitable where data has to be deleted.
• It’s really energy-intensive