A Deep Dive Into Blockchain Technology.

The rapid progress of Blockchain technology is showing no signs of slowing down. In the past few decades, many things that seemed impossible have turned out to be false, such as high transaction fees, double spending, net fraud, retrieving lost data, etc. But, now all this can be avoided with the help of Blockchain Technology.

Have you ever wondered why blockchain is important? Or maybe you have asked how it is going to impact our daily life or the lives of different professionals working in different sectors.

Why should We study Blockchain?

There are several reasons why studying blockchain technology can be beneficial. Here are a few of the key reasons:

1. Blockchain is a rapidly growing technology that has numerous applications and is being adopted by a wide range of industries. By studying blockchain, you can gain a valuable skill that is in high demand and can open up a wide range of career opportunities.

2. Blockchain has the potential to greatly impact and disrupt various industries, including finance, supply chain management, and data management. By studying blockchain, you can gain a better understanding of how this technology works and how it can be used to improve existing systems and processes.

3. Blockchain is a complex and evolving technology that requires a deep understanding of various fields, including cryptography, computer science, and distributed systems. By studying blockchain, you can gain a deeper understanding of these fields and develop a broader range of technical skills.

4. Studying blockchain can also help you to understand the potential implications and ethical considerations of this technology. Blockchain has the potential to greatly impact society, and it is important to consider the potential consequences of its widespread adoption.

Studying blockchain can be beneficial for a wide range of reasons, including the potential career opportunities it offers, the potential impact it has on various industries, and the technical and ethical considerations it raises.

In this article, we are going to focus on the importance of blockchain technology, not only in real-life scenarios, but also its importance in businesses or banks. Blockchain is now very popular among the general audience. Its popularity started with the rise of bitcoin prices. However, right now, its popularity, according to Google, is now settling down.

A blockchain is a ledger-based peer-to-peer network where each peer has a ledger copy. This drives the decentralized idea into the minds of the Why Blockchain Is Important. At the core, you can find the blockchain's importance by going through its key features. These features make blockchain irresistible in diverse scenarios and mark itself as the best possible solution.

Immutability

Blockchain is immutable. This opens a lot of opportunities for platforms that need immutable traits to make their system more functional in a highly competitive market. Take the supply chain, for example. Immutability enables companies to ensure that there is no hamper done to the packages in transit. As blockchain is immutable, it is not possible to alter the package information in any way. Any alteration will alarm the system.

Transparency

Another crucial aspect that makes blockchain so important is transparency. There are different types of blockchains. Public blockchain provides transparency due to its nature. It is very useful for different functions of our society, including doing elections. Companies can also utilize it to ensure that the end-user can interact with the processes with full or partial transparency.

Digital Freedom

As a human being, one of your rights is freedom. There are centralized entities that offer connectivity in terms of economy but also take away our freedom. Take your bank, for example. It can block your transactions or confiscate your account if deemed right. There are banks that do so - even when the account holders have not done anything wrong. So, if you are taking blockchain into account, you will find there is no centralized authority.

With blockchain, you get true digital freedom. You are your own bank. You can take out your money when you want and do it without anyone else authorization. With the lack of any central authority, you are the sole owner and person responsible for your assets. It gives you digital freedom that relies heavily on the backbone of blockchain technology.

Truly Decentralized Services

Decentralized services are the backbone of our futuristic society. Be it asset management or energy management; there will be decentralized services for every sector out there. This will give people unprecedented access to the options that are currently not available in the market. Almost every sector will have decentralized services.

The music industry, for example, can benefit from truly decentralized services where both creator and consumer can participate without the need for any approval from a big centralized corporation.

Excellent Use-Cases

Blockchain is not confined to just one particular use case. This makes blockchain excellent technology for the future of our society. It can be used in almost every sector, including trade finance, banking, government, education, healthcare, oil, and so on. These use cases also have a huge impact.

Better Security

Blockchain uses cryptography to add a layer of security to the data stored on the network. The decentralization feature, on top of the cryptography, makes blockchain provide better security than other systems. Cryptography utilized complex mathematical algorithms that are used to secure the data and systems on the blockchain network.

Also, each block on the network carries a unique hash, which means that no data can be forged or changed by malicious actors or hackers.

Inexpensive

Blockchain is inexpensive when compared to other technologies. The removal of centralized authority removes the buffer required to run the network optimally. With no centralization, there is no need to pay a middleman, improving cost efficiency. In the supply chain, using blockchain means less paperwork. The paperwork itself costs a lot. There are other costs associated, including hiring people to do the paperwork and maintain the intermediaries.

Improved Efficiency

Lastly, improved efficiency is another answer to why blockchain is important. The cause is better security, intermediary removal, and overall better processes. Transactions also take seconds rather than a week to complete, especially international transactions.

Why Blockchain Is Important for Business

Now that we understand the importance from a general point of view. Let's try to understand it from a business perspective. For the most part, it is the business that benefits from blockchain the most. Blockchain is not easy to implement for normal users. It needs to be managed by a team of experts, which makes it ideal for businesses that have the budget and appetite to manage the blockchain project.

The global blockchain market improvement to $20+ billion in 2023 is another sign of how rapidly businesses are adopting blockchain, as per this blockchain presentation.

So, what makes blockchain so lucrative to businesses? First of all, it reduces operational costs. The removal of intermediaries is a boon for business as it not only reduces cost but also reduces the point of contact - improving efficiency and growth.

Transaction speeds are also improved to a new height. For businesses, it is all about efficiency if they can keep their accuracy intact. The use cases are also in favor of business. Some companies have already shown their interest in blockchain. The Dubai Blockchain Strategy is one example where the government wants to change its city with the help of blockchain. They want it to become the first city that will be powered by blockchain. They are aiming at 2020 to make it happen.

Blockchain Maturity A Big Concern

However, businesses know that blockchain maturity is a big concern. Blockchain is a favorably new technology when compared to other technologies. It is also suffering from big challenges and disadvantages of blockchain, including scalability and widespread adoption. Also, blockchain might not be the answer to every industry out there. The finance sector may find blockchain very useful, but not in the art sector. But it doesn't mean that every sector out there doesn't benefit from it. The key sectors that can get truly transformed by blockchain include healthcare, transportation, retail, insurance, real estate, and more!

Blockchain As A Service

Blockchain is a disruptive technology. But it is also expensive to implement and manage. But, with blockchain as a service, businesses with a lower budget can also transit to the blockchain. There are popular blockchain-as-a-service (BaaS) services that are trying to solve the demand.

But what is blockchain as a service?

These are cloud-based solutions, which means that businesses don't have to worry about infrastructure or maintenance. All they have to do is pay for it like a service. Currently, there are plenty of blockchain-as-a-service providers, but the most notable ones include the following:

• Azure Blockchain Workbench

• Amazon Managed Blockchain

• SAP Blockchain (Cloud Platform Blockchain)

• Oracle Blockchain Applications Cloud

Check out the basic comparison between AWS vs Azure vs Oracle blockchain here.

Why Is Blockchain Important to Different Industry Sectors?

Now that we have understood the importance of blockchain for business. It is now time to reflect upon blockchain's importance to different sectors. Let's cover four of them below.

Why Blockchain Is Important in Banking and Finance

The banking and finance sector can be drastically improved by blockchain. Digital financial institutes have the most benefits when it comes to smart contracts. The benefits come from digital assets, programmable money, and smart contracts. There are plenty of use cases that can be used in the banking and finance sector. Especially, trade finance blockchain has gained a lot of traction in recent times.

Some of them are as below:

• Capital markets such as insurance, sales, and trading

• Payments and remittances for both domestic and international

• Trade finance sectors including bills of lading and letters of credit

• Insurance

• Investment management including fund launch, administration, and more

There are also a few business benefits, including:

- Authenticity: It helps finance institutes to bring data integrity and ensure proper authenticity in their systems - Streamlined Process: It improved operational efficiency, including the ability to do a real-time settlement, reporting, and audit. - Programmable Capabilities: The entire business logic can be coded including data privacy, compliance, identity, and so on - Economic Benefits: Better operational cost, fewer infrastructure costs, and transactional costs.

Why Blockchain Is Important in Healthcare

Healthcare is another sector where blockchain will play an important role. Currently, healthcare is suffering from a lack of unity. Patients need to carry their documents, and hospitals put records in separate silos, which takes time to be retrieved when needed. Currently, there are plenty of use cases related to healthcare, including the following:

• Patient consent management

• Drug traceability

• Secure electronic health records (ETRs)

• Micropayments Incentivization

• Clinical trials data security

Why Blockchain Is Important in Supply Chain

Supply Chain lacks transparency, accurate asset tracking, and enhanced licensing. Blockchain can improve traceability, transparency, and traceability and have a massive impact on every sector that relies on the supply chain. Right now, products can be hard to track due to the unavailability of real-time tracing. Also, it will become impossible for malicious actors to change goods in any form or factor.

• Improved transparency

• Traceability

• Tradability

The Origin of Blockchain:

Article from: Google

It is not clear when the first time the term 'blockchain' was used since in the bitcoin (BTC) whitepaper the creator or creators of the flagship digital currency, Satoshi Nakamoto, do not explicitly use that word. The closest instance of the word being used in the white paper is in the phrases 'blocks are chained' and 'chain of blocks' among other examples.

Who Invented Blockchain?

While the origin of the term itself is not clear that of the technology is. The origins of blockchain technology can be traced back to the cryptography work that was conducted by two scientists, W. Scott Stornetta and Stuart Haber. In their work, the goal of the two scientists was to develop a system where the timestamps of a document would be immune to tampering or changes. Merkle trees were later introduced by the two scientists to the design and this increased the efficiency since it allowed for the collection of several documents into one block.

But while Satoshi Nakamoto did not explicitly use the term blockchain he (or she or they) is credited with conceptualizing the first blockchain as it is the core component of bitcoin. In the flagship, digital currency blockchain serves the purpose of acting as a public ledger with regard to the transactions that take place on the network. By employing a blockchain bitcoin solved a problem that had been inherent in other digital currencies - double-spending. This was done without the need for a central trusted authority.

for more detailed explanations visit Origin Of Blockchain Technology.

What is Blockchain?

Blockchain is incredibly popular nowadays. But What is Blockchain? How does it work? What problems they do solve and how can they be used?

Like the name indicates, a blockchain is a chain of blocks that contain information. This technique is originally described in 1991 by a group of researchers and was originally intended to timestamp digital documents so that it's not possible to backdate them or tamper with them. Almost like a notary. However, it went mostly unused until it was adopted by Satoshi Nakamoto to create a digital cryptocurrency Bitcoin. A blockchain is a distributed ledger that is completely open to anyone. They have an interesting property. Once some data has been recorded inside a blockchain, it became very difficult to change it.

So, how does that works? Well, let's take a closer look at a block-

Each block contains some data, the hash of the block, and the hash of the previous block. The data that is stored inside a block depends on the type of blockchain. The Bitcoin blockchain for example stores the details about a transaction in here, such as the sender, receiver, and the amount of coins. A block also has a hash. You can compare a hash to a fingerprint. It identifies a block and all of it is contents and it's always unique, just like a fingerprint.

Once a block is created, its hash is being calculated changing something inside the block will cause the hash to change. So, in other words, hashes are very useful when you want to detect changes to the blocks. If the fingerprint(hash) of the block changes, it is no longer the same block. The third element inside each block is the hash of the previous block. These effectively create a chain of blocks and it's this technique that makes a blockchain so secure.

Let's take an example,

here we have a chain of 3 blocks. As you can see, each block has a hash and the hash of the previous block. So, block number 3 points to block number 2 and block number 2 points to block number 1. Now the first block is a bit special, it cannot point to previous blacks because it is the first one. We called this the genesis block. Now, let's say you tamper with the second block. This causes the hash of the block as well. In turn that will make blocks and all the following blocks invalid because they no longer store a valid hash of the previous block So, changing a single block will make all following blocks invalid. But using hashes is not enough to prevent tampering.

Computers these days are very fast and can calculate hundreds of thousands of hashes per second. You could effectively tamper with a block and recalculate all the hashes of other blocks to make your blockchain valid again. So, to mitigate this, blockchain has something called proof-of-work. It's a mechanism that slows down the creation of new blocks. In the Bitcoin case, it takes about 10 minutes to calculate the required proof-of-work and add a new block to the chain. This mechanism makes it very hard to tamper with the blocks because if you tamper with one block you'll need to recalculate the proof-of-work for all the following blocks as well.

So, the security of a blockchain comes from its creative use of hashing and the proof-of-work mechanism. But there is one more way that blockchains secure themself and that's by being distributed. Instead of using a central entity to manage the chain, blockchain uses a peer-to-peer network and anyone is allowed to join. When someone joins this network he gets the full copy of the blockchain. The node can use this to verify that everything is still in order.

Now let's see what happens when someone creates a new block. That new block is sent to everyone on the network. Each node then verifies the block to make sure that it hasn't been tampered with. If everything checks out, each node adds these blocks that are valid and which aren't. Blocks that are tampered with will be rejected by other nodes in the network. So, to successfully tamper with a blockchain you'll need to tamper with all the blocks on the chain, redo the proof-of-work for each block and take control of more than 50% of the peer-to-peer network. Only then does your tampered block become accepted by everyone else. This is almost impossible to do!

Blockchain is also constantly evolving. One of the more fascinating development is the creation of smart contracts. These contracts are simple programs that are stored on the blockchain and can be used to automatically exchange coins based on certain conditions. The creation of blockchain technology peaked a lot of people's interest. Soon, others will realize the technology Can be used for various purposes.

Applications of Blockchain:

As we already know Blockchain is a decentralized and distributed digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the consensus of the network. This technology has been widely used in various industries and has the potential to revolutionize the way businesses and organizations operate.

One of the most well-known applications of blockchain technology is in the financial industry. Blockchain allows for the secure and transparent transfer of assets, such as cryptocurrencies, without the need for a third-party intermediary. This not only reduces the cost of transactions but also increases their speed and security.

Another use case for blockchain is in supply chain management. By using blockchain, businesses can track their products from the point of origin to the final destination in a transparent and immutable manner. This can help to increase the efficiency and accountability of supply chains, and also allows for the detection of any potential issues or discrepancies.

Blockchain technology can also be used in the field of voting. By using a blockchain-based voting system, votes can be securely and transparently recorded, ensuring the integrity and accuracy of the voting process. This can help to increase public trust in the electoral process and prevent voter fraud.

In addition, blockchain has the potential to revolutionize the way we handle and manage data. By storing data on a decentralized and distributed ledger, it becomes much more secure and difficult to tamper with. This can be particularly useful for industries that deal with sensitive data, such as the healthcare industry.

Blockchain technology has numerous applications and has the potential to greatly impact various industries. Its decentralized and transparent nature makes it a powerful tool for increasing efficiency, security, and trust in various systems and processes.

Hashing Algorithm:

Hashing algorithms are mathematical functions that are used to map data of any size to a fixed-size output. In the context of blockchain, hashing algorithms are used to securely and efficiently store and transmit data in the form of blocks on the blockchain network.

When a new block of data is added to the blockchain, the hashing algorithm is used to create a unique digital signature, known as a "hash," for that block. This hash is generated by running the block's data through the hashing algorithm, which produces a fixed-size output that is unique to that specific block of data.

The hash for each block on the blockchain is also linked to the hash of the previous block in the chain, creating a secure and unalterable record of all transactions on the network. This is because changing any data in a block would result in a different hash, which would then break the link to the previous block and be easily detected by the network.

There are various types of hashing algorithms that are used in blockchain technology, each with its own unique characteristics and strengths. Some of the most commonly used hashing algorithms in blockchain include SHA-256, SHA-3, and Scrypt.

Hashing algorithms are an essential part of the security and efficiency of blockchain technology. They allow for the secure and efficient storage and transmission of data on the network, while also providing a means of detecting any tampering or alterations to the data.

Immutable Ledger:

An immutable ledger is a digital record of transactions that cannot be altered or tampered with. In the context of blockchain technology, an immutable ledger refers to the decentralized and distributed digital ledger that is used to securely and transparently record transactions on the blockchain network.

One of the key features of an immutable ledger is that it cannot be altered retroactively. This means that once a block of data has been added to the blockchain, it cannot be changed or deleted without also changing all subsequent blocks in the chain and the consensus of the network.

This makes the blockchain an extremely secure and reliable means of storing and transmitting data. It prevents any single entity from being able to alter the ledger without the consensus of the network, and also allows for the transparent and auditable tracking of all transactions on the network.

In addition, the decentralized and distributed nature of the blockchain ensures that the ledger is not controlled by any single entity, further increasing its security and reliability.

The immutable ledger is a key feature of blockchain technology that allows for the secure and transparent storage and transmission of data on the network. It ensures that the data on the blockchain cannot be altered retroactively and is a crucial part of the security and reliability of the network.

What is a P2P network?

A peer-to-peer (P2P) network is a type of network in which each computer or device is connected to each other, allowing them to share and exchange resources and information without the need for a central server or authority. In a P2P network, each computer or device acts as both a client and a server, allowing for decentralized and distributed communication and data sharing.

One of the key advantages of a P2P network is that it allows for decentralized and distributed communication and data sharing. This means that there is no single point of failure or central authority, making the network more resilient and less vulnerable to attacks or disruptions.

P2P networks are commonly used for various applications, including file sharing, video conferencing, and online gaming. They are also used in blockchain technology, where they enable decentralized and distributed transaction processing and data storage.

P2P networks are a type of network that allows for decentralized and distributed communication and data sharing. They offer several advantages over traditional client-server networks, including increased resilience and the ability to operate without a central authority.

Distributed P2P Network in Blockchain:

In a distributed peer-to-peer (P2P) network in blockchain, each computer or device in the network is connected to each other and acts as both a client and a server. This allows for decentralized and distributed communication and data sharing among the nodes in the network.

In a distributed P2P network, each node maintains a copy of the blockchain ledger, which contains a record of all transactions that have occurred on the network. When a new transaction is made, it is broadcasted to the entire network and verified by the nodes. Once the transaction has been verified, it is added to the blockchain as a new block, and the updated ledger is distributed to all nodes on the network.

The distributed nature of a P2P network in blockchain allows for decentralized and distributed transaction processing and data storage. This means that there is no single point of failure or central authority, making the network more resilient and less vulnerable to attacks or disruptions.

A distributed P2P network in the blockchain is a decentralized and distributed network of computers or devices that allows for the secure and transparent processing and storage of transactions on the blockchain. Its distributed nature makes it more resilient and less vulnerable to attacks or disruptions.

Blockchain Mining:

Blockchain mining is the process of verifying and adding transactions to the blockchain ledger. In a blockchain network, transactions are grouped into blocks and added to the blockchain through a process called mining.

Mining involves using specialized computer hardware to solve complex mathematical problems, known as "proof-of-work," in order to verify the transactions in a block and add it to the blockchain. This process requires a significant amount of computational power, and miners are rewarded for their efforts with a certain number of cryptocurrencies.

In addition to verifying and adding transactions to the blockchain, mining also plays a key role in maintaining the security and integrity of the network. By requiring miners to solve complex mathematical problems in order to add blocks to the blockchain, the network is protected from attacks and malicious actors.

Blockchain mining is the process of verifying and adding transactions to the blockchain through the use of specialized computer hardware. It plays a crucial role in maintaining the security and integrity of the blockchain network.

Byzantine General's Problem:

The Byzantine Generals Problem is a concept in computer science that refers to the challenge of achieving consensus among multiple parties in a distributed network when some of the parties may be unreliable or malicious.

In the context of the Byzantine Generals Problem, the parties are represented by a group of generals who are trying to decide on a strategy for attacking a city. However, some of the generals may be unreliable or may have conflicting interests, making it difficult for the group to reach a consensus on a plan of action.

To solve the Byzantine General's Problem, a consensus protocol must be implemented to ensure that all parties agree on a course of action. This typically involves some form of voting or agreement-reaching mechanism, where each party must agree on the plan before it can be implemented.

The Byzantine General's Problem is relevant to the design and implementation of distributed systems, such as blockchain technology. In a blockchain network, it is important to achieve consensus among the nodes in the network in order to maintain the integrity and security of the network.

The Byzantine Generals Problem is a concept that refers to the challenge of achieving consensus among multiple parties in a distributed network when some of the parties may be unreliable or malicious. It is relevant to the design and implementation of distributed systems, including blockchain technology.

Proof Of Work (PoW):

Proof of Work (PoW) is a consensus protocol used in blockchain technology to achieve distributed consensus and prevent malicious attacks on the network. In a PoW-based blockchain network, miners compete to solve complex mathematical problems in order to verify transactions and add them to the blockchain.

The PoW consensus protocol works by requiring miners to perform a certain amount of computational work, in the form of solving mathematical problems, in order to add a new block of transactions to the blockchain. This process, known as "mining," helps to ensure that only valid transactions are added to the blockchain and that the network is protected from malicious actors.

In addition to providing security for the network, the PoW consensus protocol also serves to incentivize miners to participate in the network. Miners are rewarded for their efforts with a certain number of cryptocurrencies, providing a financial incentive for them to continue mining and contributing to the network.

Proof of Work is a consensus protocol used in blockchain technology to achieve distributed consensus and prevent malicious attacks on the network. It works by requiring miners to perform computational work in order to verify transactions and add them to the blockchain, and also provides an incentive for miners to participate in the network.

Longest Completing Chain (LCC):

The Longest Competing Chain (LCC) is a consensus protocol used in some blockchain networks to achieve distributed consensus and prevent malicious attacks on the network. In an LCC-based blockchain network, the longest chain of valid blocks is considered to be the correct version of the blockchain.

The LCC consensus protocol works by allowing multiple competing versions of the blockchain to exist simultaneously. When a new block is added to the blockchain, it may be added to one of the competing chains. The longest chain, which is the chain with the most number of blocks, is considered to be the correct version of the blockchain.

One of the key advantages of the LCC consensus protocol is that it allows for high transaction throughput and fast block times. Because multiple competing versions of the blockchain can exist simultaneously, transactions can be processed and added to the blockchain more quickly, resulting in faster block times.

However, the LCC consensus protocol is not without its drawbacks. One potential issue is that it may be susceptible to "selfish mining," where miners can deliberately withhold blocks in order to extend their own chain and gain an advantage over other miners.

The Longest Competing Chain is a consensus protocol used in some blockchain networks to achieve distributed consensus and prevent malicious attacks on the network. It allows for high transaction throughput and fast block times but may be susceptible to certain types of attacks.