Blockchain

Blockchain is a system of recording information in a way that makes it difficult or

impossible to change, hack, or cheat the system.
A blockchain is essentially a digital ledger of transactions that is duplicated and distributed
across the entire network of computer systems on the blockchain. Each block in the chain
contains a number of transactions, and every time a new transaction occurs on the
blockchain, a record of that transaction is added to every participant’s ledger. The
decentralised database managed by multiple participants is known as Distributed Ledger
Technology (DLT).
Blockchain is a type of DLT in which transactions are recorded with an immutable
cryptographic signature called a hash.

How blockchain works

 As each transaction occurs, it is recorded as a “block” of data
Those transactions show the movement of an asset that can be tangible (a product) or
intangible (intellectual). The data block can record the information of your choice.
 Each block is connected to the ones before and after it
These blocks form a chain of data as an asset moves from place to place or ownership changes hands. The
blocks confirm the exact time and sequence of transactions, and the blocks link securely together to prevent any
block from being altered or a block being inserted between two existing blocks.

 Transactions are blocked together in an irreversible chain: a blockchain

Each additional block strengthens the verification of the previous block and hence the
entire blockchain. This renders the blockchain tamper-evident, delivering the key strength
of immutability. This removes the possibility of tampering by a malicious actor — and
builds a ledger of transactions you and other network members can trust.
 What Is a Block?
Every chain consists of multiple blocks and each block has three basic elements:

 The data in the block.

 The nonce: “number used only once.” A nonce in blockchain is a whole number
that’s randomly generated when a block is created, which then generates a
block header hash.

 The hash: a hash in blockchain is a number permanently attached to the nonce.

What Is Decentralization in Blockchain?

One of the most important concepts in blockchain technology is decentralization. No
one computer or organization can own the chain. Instead, it is a distributed ledger via
the nodes connected to the chain. Blockchain nodes can be any kind of electronic
device that maintains copies of the chain and keeps the network functioning.

Every node has its own copy of the blockchain and the network must algorithmically
approve any newly mined block for the chain to be updated, trusted and verified.
Since blockchains are transparent, every action in the ledger can be easily checked
and viewed, creating inherent blockchain security. Each participant is given a unique
alphanumeric identification number that shows their transactions.

Advantages and Disadvantages

 Higher Accuracy of  Limit on Transactions per

Transactions Second

 No Need for Intermediaries  High Energy Costs

 Extra Security  Risk of Asset Loss

 More Efficient Transfers  Potential for Illegal Activity

Public Blockchain: These blockchains are completely open to following the idea of decentralization. They
don’t have any restrictions, anyone having a computer and internet can participate in the network.
 As the name is public this blockchain is open to the public, which means it is not owned by anyone.

 Anyone having internet and a computer with good hardware can participate in this public blockchain.

 All the computer in the network hold the copy of other nodes or block present in the network

 In this public blockchain, we can also perform verification of transactions or records

Private Blockchain: These blockchains are not as decentralized as the public blockchain only selected
nodes can participate in the process, making it more secure than the others.
 These are not as open as a public blockchain.

 They are open to some authorized users only.

 These blockchains are operated in a closed network.

 In this few people are allowed to participate in a network within a company/organization.

Hybrid Blockchain: It is the mixed content of the private and public blockchain, where some part is
controlled by some organization and other makes are made visible as a public blockchain.
 It is a combination of both public and private blockchain.

 Permission-based and permissionless systems are used.

 User access information via smart contracts

 Even a primary entity owns a hybrid blockchain it cannot alter the transaction

Consortium Blockchain: It is a creative approach that solves the needs of the organization. This blockchain
validates the transaction and also initiates or receives transactions.
 Also known as Federated Blockchain.
 This is an innovative method to solve the organization’s needs.
 Some part is public and some part is private.
 In this type, more than one organization manages the blockchain.