Blockchain as a technology ideally contributes in enhancing the level of trust between the parties involved in a transaction. It is a transaction record database that is distributed, validated and maintained around the world by a network of computers. Instead of a single central authority such as a bank, a large community oversees the records in Blockchain, and no individual person has control over these records.
Blockchain is based on decentralized technologies. This functions as a peer-to-peer (P2P) network. Blockchain can be defined as “A peer-to-peer, decentralized, distributed ledger that records transactions efficiently, and in a verifiable and robust fashion.”
The financial transactions carried out in the day-to-day basis like transferring money to others needs to be carried out with the involvement of a banking institution. The banking institution herein tends to work like a third party that takes service charges for helping in finalising the transaction. Herein, the incorporation of the Blockchain technology potentially reduces the need to depend on third parties for making of transfers or in carrying out of other types of financial transactions. The technology helps in carrying out of transactions like transfer or in carrying out of purchases without the involvement of additional cost or time. The same also contributes in increasing the level of trust shared between the parties involved in the transaction.
The concept of Blockchain earned needed popularity after the release of a paper by Satoshi Nakomoto during 2008 which provided a discussion regarding Bitcoin or the electronic cash. Blockchain is observed to be a secure chain built of a network of different blocks. Each of the different blocks contains needed data associated to digital information. Further, each of the different blocks encompasses a unique identifier and also an identifier pertaining to the previous block. The identifiers act like passports that help in uniquely identifying and segregating a block from another block. In technical terms, the identifiers are also known to be “Hashes”. Thus, each of the different blocks encompasses its own hash and also the hash belonging to that of the previous block. The different blocks are distributed in an open fashion and are highly secure in nature.
Each of the different data blocks are both secured and linked to each other based on the application of cryptographic principles or chains. This aspect makes it highly difficult for the blocks to be altered. Different types of applications associated to diverse fields like finance and healthcare are carried out based on the incorporation of Blockchain Technology. Blockchain earns needed popularity in that the same helps in recording of different types of transactions.
Below are 3 types of Blockchain
- Public Blockchain
- Private Blockchain
- Federated/Consortium
Different Blockchain Technologies
- Bitcoin : Bitcoin is a globally known cryptocurrency and digital payment system. It was the first decentralized digital currency whose ledger is maintained by blockchain openly. Bitcoin is an implementation of blockchain distributed ledger technology and the transactions in bitcoin blockchain takes place directly between users, without an intermediary.
- Ethereum: Ethereum is also an open source software platform, based on Blockchain technology that enables developers to build and deploy decentralized applications. It was initiated by Vitalik Buterin in late 2013. It offers Decentralized Virtual Machine aka Ethereum Virtual Machine (EVM) which can execute scripts using an international network of public nodes. Development for Ethereum was funded by an online public crowdsale during July-August 2014, by buying the Ethereum value token (Ether).
- Hyperledger : Hyperledger is a multi-project open source blockchain platform created to advance cross-industry blockchain technologies. It is a global collaboration, hosted by The Linux Foundation, including leaders in Finance, Banking, Internet of Things, Supply chains, Manufacturing, and Technology. Hyperledger acts as an operating system for marketplaces, data-sharing networks, micro-currencies, and decentralized digital communities.
- NEO: NEO was initially called AntShares (ANS) which was launched in 2014, founded by Da Hongfei and Erik Zhang. Antshares announced on June 22, 2017 that it planned to rebrand itself as NEO. NEO is a smart economy for the distributed network. The first ICO on the NEO blockchain, Red Pulse Token (RPX) was announced soon after the rebranding finished. Apart from the NEO cryptocurrency itself, it has another crypto-token called “GAS” which was formerly known as “ANCAntcoins”.
- EOS: EOS is the leading open source blockchain platform that enables transparency in transactions at the speed and scale needed to solve real-world challenges. EOS is an operating system for marketplaces, data-sharing networks, micro-currencies, and decentralized digital communities. EOS blockchain is aiming to become a decentralized operating system which can support industrial-scale decentralized applications
- Corda : Corda is a distributed ledger open source platform for businesses. It is among the most sophisticated platforms to enable the implementation of enterprise blockchain applications. It is not a blockchain and also not a native cryptocurrency. Nodes here are arranged in an authenticated peer-to-peer network with no message broadcasting.
- Quorum : Quorum is an open-source, permissioned implementation of Ethereum supporting transaction and contract privacy. It is an enterprise-focused version of the Ethereum Blockchain, developed by J.P. Morgan. It is an ideal application for high speed and high throughput processing of private transactions. It is a fork of the 'geth' public ethereum client with many changes in protocol level to support business needs. The primary aim of the Quorum project is to build an ethereum client enterprise that empowers enterprises to accept blockchain technology and benefit from it.
Benefits of using Blockchain Technology
- No Third-Party Intermediaries
- Greater Transparency
- High Availability
- High Security
- Faster Dealings and Cost Savings
