Blockchain Has Disruptive Power

A blockchain is a database that stores encrypted blocks of data then chains them together to form a chronological single-source-of-truth for the data. The blockchain is an immutable and distributed digital ledger which is digital record of transactions or data stored in multiple places on a computer network. A transparent ledger of changes preserves integrity of the document, which creates trust in the asset. Blockchain’s inherent security measures and public ledger make it a prime technology for almost every single sector.

Core Components of Block Chain

Block

Every chain consists of multiple blocks and each block has three basic elements: Data, 32-bit whole number called a nonce and The hash which is a 256-bit number wedded to the nonce.

Chain

Blocks inside a blockchain network are connected to each other. Multiple blocks that are joined together form a chain of blocks.

Node

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. Nodes can be any kind of electronic device that maintains copies of the blockchain and keeps the network functioning.

MasterNode

Master nodes are more capable than normal nodes.They are in an active mode (24*7). These nodes take up more memory than the normal nodes; their main task is to maintain an equilibrium between the blocks. Master nodes are not responsible for adding new blocks to the blockchain network.

Need of Block Chain and its Types

The most basic need or application of a blockchain is to carry out transactions or exchange of information through a secure network. But the way people use blockchain and distributed ledger technology or network vary from case to case. There are four main types of blockchain networks: public blockchains, private blockchains, consortium blockchains and hybrid blockchains. While the blockchain technology behind projects is the same, the target end users of the different types of blockchain may differ.

Public Blockchain

A public blockchain is a non-restrictive, permission-less distributed ledger system. All the data stored in the blockchain are public, although pseudo-anonymity of the user can be established since the data is linked to the public key. Public blockchains can be highly censorship-resistant, since anyone is open to join the network, regardless of location, nationality, etc. This makes it extremely hard for authorities to shut them down. The data is immutable. These types of blockchain should only be used if the business model can handle rigorously increasing data.

Private Blockchain

Private blockchains are more centralized than public blockchains. They are customizable blockchains typically operated on a small network inside a company or organization. They are also known as permissioned blockchains or enterprise blockchains. The entities running the chain have significant control over participants and governance structures. Private blockchains may or may not have a token involved with the chain.

Consortium Blockchain

A consortium blockchain is a semi-decentralized type where more than one organization manages a blockchain network. This approach has all the same benefits of a private blockchain and could be considered a sub-category of private blockchains. Consortium blockchains are typically used by banks, government organizations, etc. In a consortium blockchain, the consensus procedures are controlled by preset nodes. It has a validator node that initiates, receives and validates transactions. Member nodes can receive or initiate transactions.

Hybrid Blockchain

It combines the privacy benefits of a permissioned and private blockchain with the security and transparency benefits of a public blockchain. With such a hybrid network, users can control who gets access to which data stored in the blockchain. The hybrid system of blockchain is flexible so that users can easily join a private blockchain with multiple public blockchains. A transaction in a private network of a hybrid blockchain is usually verified within that network. But users can also release it in the public blockchain to get verified.

Every one of these types of blockchain has potential application that can improve trust and transparency and create a better record of transactions. If you have any queries in a particular type of blockchain? Leave your comments below.

 

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