Blockchain Technology

Traditional database

A traditional database is data structure that stores data in an electronic form. They adopted a traditional way of storing information, later on they started using relational model which created complex ways of gathering data by sharing relationships between multiple databases

Characteristics of database

They can be controlled, managed and modified.

Administrator could also perform administration operations like optimizing performance and managing size for the database.

A Database could also have many other roles to control and operate the data.

A Database is recursive, you can modify, update or delete a particular record.

What exactly is Blockchain?

The blockchain is general terms is defined in following manner:

● A technology that permits transactions to be recorded permanently.

● A technology that cryptographically secure the system and chains data in chronological order.

● A technology that remove intermediaries and create trust through the algorithm.

Blockchain was first introduced in the white paper for Bitcoin in 2009 by unknown person named as Satoshi Nakamoto. Currently, blockchain is used my multiple organizations to tackle their problems and provide a better solution.

How Blockchain solves the current problem?

● Security through Cryptography

● Availability through multiple machines

● Low transaction costs

● Remove of central parties and intermediaries. Proprietary content.

Blockchain Definition:

“A blockchain is a digitized, distributed, consensus-based secure storage of information protected from revision and tampering over the peer-to-peer network.”

Advantages of Blockchain

● Decentralization

● Immutability

● Transparency

● Security

● Removal of Intermediaries

Introduction to Cryptography

Cryptography is an important aspect when we deal with network security. ‘Crypto’ means secret or hidden.

Merkle Trees

Blockchain makes use of hashing algorithm where hash of each and every node is transformed to higher level of hierarchy forming a Merkle Tree.

What is Consensus?

● Blockchains are decentralized systems which consist of different participants who act depending on incentives they receive and the information that is available to them.

● When a new transaction gets broadcasted on the network, nodes connected to the network have the option to either include that transaction to their copy of ledger or to ignore it. When the majority of the nodes which comprise the network decide on a single state, the consensus is achieved.

How does transaction get into blockchain ?

Industry Challenges for Blockchain Adoption

Energy Consumption :

● Some major public Blockchains use Proof-of-Work algorithms.

● PoW involves the use of the computational power of a machine to solve a complex mathematical puzzle to verify a transaction and add it to a block.

● Current Bitcoin energy consumption is almost equal to the consumption by Ireland.

● By 2020 it’s estimated that Bitcoin will utilize more energy consumption than the entire world currently uses.

● A probable solution for this has emerged in the form of different consensus mechanisms like Proof-of-Stake, Delegated-Proof-of-Stake, etc.

Scalability :

● Scalability has appeared as a significant issue for the Blockchain networks like Bitcoin and Ethereum.

● Blockchains are having trouble effectively supporting a large number of users on the network.

● Moreover, the size of public blockchains keeps on increasing. Currently, Bitcoin ledger size is above 100 GB.

● One possible solution which has emerged is storing a hash of data over the network.

Public Perception

● Presently, blockchain technology is almost synonymous with Bitcoin.

● The majority of the public is still oblivious to the existence and potential uses of Blockchain technology.

● As Bitcoin is anonymous and is used for shadowy dealings of money laundering, black market trade, and other illegal activities. The blockchain is also getting a bad reputation due to the same.

● Mainstream adoption is needed to remove the sometimes-negative undertones of Bitcoin.

Standards and Regulations :

● Blockchains are continuously evolving, but still, countries are skeptic about it as there is no proper definition for standards and regulations.

● Enterprises and Governments require regulations to protect their customers.

● To tackle this problem, certain countries are trying to launch their regulations over the technology.

● Mass adoption might also standardize the Blockchain.