Blockchain is the world’s leading software platform for digital assets. A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a cryptographic hash of the previous block, a timestamp and transaction data. Blockchains are secure by design and exemplify a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been achieved with a blockchain.
What is Blockchain ?
The blockchain is an undeniably ingenious invention developed by a person or group of persons referred as Satoshi Nakamoto. It was initially developed as a wallet for Bitcoin. But since then it has evolved into something else entirely, some people also predicts that it is evolving towards a new Internet aka Internet 2.0. By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet.
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” — Don & Alex Tapscott, authors Blockchain Revolution (2016).
The Fundamental working of Blockchain is as follows —
In his original Bitcoin paper, Satoshi Nakamoto defined an electronic coin — the bitcoin — as “a chain of digital signatures” known as the ‘blockchain’. The blockchain enables each coin owner to transfer an amount of currency directly to any other party connected to the same network without the need for a financial institution to mediate the exchange.
Despite its apparent complexity, a blockchain is just another type of database for recording transactions — one that is copied to all the computers in a participating network. A blockchain is thus sometimes referred to as a ‘distributed ledger’. Data in a blockchain is stored in fixed structures called ‘blocks’. The important parts of block are as follows –
Header — This includes metadata — reference number, timestamp etc.
Content — Contains the validated list of digital assets and instruction statement — transaction completed, amount and addresses of the parties of the transaction.
Blockchain comes in many types. As well as the Bitcoin Blockchain, a number of other independent blockchain’s have emerged in recent years. None has yet achieved the same scale as Bitcoin, but they do offer other benefits, such as increased speed, larger data capacities, different consensus methods or more advanced functionality.
— Before you begin working with blockchain, or even working towards, achieving the blockchain for your existing application/infrastructure, you need to understand the fundamental application/use cases of blockchain.
1. Data Authentication & Verification.
2. Smart Asset Management.
3. Smart Contracts.
— Once you agree on the use cases, the next step is to select the most suitable platform. There are many platforms which are commonly used for blockchain and the good news is that most of these platforms are open source. The most common platform are as follows –
5. Open Chain
— The Heart and soul of Blockchain is nodes, or P2P network of nodes, hence it has to be considered at this stage whether the nodes will run on the cloud, on-premise or both. Then comes hardware configuration issues like processors, memory and disk size. You also need to decide on the base operating systems (usually Ubuntu, CentOS, Debian, Fedora, Red Hat or Windows).
— Next step is to design the blockchain instance. Most blockchain platforms need very careful planned configuration for the following elements:
2. Asset issuance
3. Asset re-issuance
4. Atomic exchanges
5. Key management
6. Multi signatures
8. Native assets
9. Address formats
10. Key formats
11. Block signatures
Some parameters can be changed at run-time but some cannot, so this is a very crucial step.
— API’s, Some blockchain platforms come with APIs while some don’t. The major categories of APIs that you would need are for:
Generating key pairs and addresses.
Performing audit related functions.
Data authentication through digital signatures and hashes.
Data storage and retrieval.
Smart-asset life cycle management –issuance, payment, exchange, escrow and retirement
At this stage you should be up and running. Just kidding!!!, I wish it was this easy, but at least for now you should have a fundamental working knowledge of Blockchain. I think it’s still great progress, we started with just a term “Blockchain and Bitcoin” and now we have a deep level of working understanding of Blockchain. Blockchain is still in developing stage and have a long way to go before actually achieving a status, where we could call it an Internet 2.0. But we are definitely heading towards it.
I’m not sure how many of you guys have watching the American TV Series known as “Silicon Valley”. In 4th season the main character comes up with the idea of Decentralized Internet for his startup business. Although they have never made a direct reference to Blockchain, but the idea and the application that they come up with is more or less similar to Blockchain. If you have watched the show, you can directly related to the Blockchain. I would recommend watching it, just for the fun of it :D. That would be all for today guys. I hope you guys have enjoyed as much as I did, while creating the content. If you have any concerns, questions, queries you can always come to me, I’m more than happy to address any and all queries related to Blockchain or in general any technology, tools, language etc. See you all soon with another new technology, until then take care.