BLOCKCHAIN

Blockchains are incredibly popular nowadays. But what is Blockchain? How do they work, what all problems do they solve and how they can be used?

“BLOCKCHAIN” as the name suggests is chain of blocks which contains information.

This technique was originally invented by some researchers in 1991 and was intended to timestamp the digital documents so that its not possible to temper or backdate them.

However it wasn’t so popular until Satoshi Nakamoto in 2009 created a digital crypto currency ‘BITCOIN’.

Blockchain can be described as a data structure that holds transactional records and while ensuring security, transparency, and decentralization. We can also think of it as a chain or records stored in the forms of blocks which are controlled by no single authority. A Blockchain is a distributed ledger that is completely open to any and everyone on the network. Once an information is stored on a Blockchain, it is extremely difficult to change or alter it.

It is a secure technology that enables to transfer digital data through a sophisticated encoding information system. In other words, Blockchain is a ledger that provides a way for information to be recorded and shared by a community. That is why it is usually compared to a ledger of digital transactions.

How does Blockchain works?

Each block in the Blockchain 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 number of coins. A block also has a hash; you can compare a hash to a fingerprint. It identifies a block and all of its components and it’s always unique, just as 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 another word, hashes are very useful when you want to detect changes to blocks. If the fingerprint of a block changes, it is no longer is the same block. The third element inside each block is the hash of the previous block. This effectively creates a chain of blocks and it is this technique that makes a blockchain so secure.

The database is the Blockchain and each node on a Blockchain has access to the whole Blockchain. No one node or computer regulates the information it contains. Every node is able to validate the records of the Blockchain. This is all done without one or several intermediaries in control of everything.

It is architecturally decentralized as there is no one or several points of failure. There is no one point of failure that would bring down the Blockchain.

However the nodes of a Blockchain are logically centralized, as the entire Blockchain is a distributed network performing certain actions programmed into it.

The distributed ledger technology used in Blockchain offers multiple benefits to businesses that make a difference when implementing a solution that requires a high degree of trust for business transactions.

What problems do they solve?

All transactions occurring on a Blockchain are recorded there, so the transactions of any person using the network are public and completely transparent, even though they may be anonymous.
Once a transaction is recorded on the Blockchain and the Blockchain has updated,

then that transaction cannot be altered.
No one person or organization can turn off a Blockchain.
The reason that faking a block is almost impossible is that the validity of the block and, by extension, its inclusion into the Blockchain is determined by an electronic consensus of nodes. There are thousands of these nodes, scattered all over the world, and as a consequence capturing the network would require a computer with impossible power.
In this sense, the big advantage of Blockchain is that, in case any node of the chain changes the register, it is automatically synchronized with the rest of the parts. Additionally, if the network of any of the computers or servers crashes, the information is not in danger, it remains intact provided that, at least, one of the parts keeps on working.
Blockchain can process transactions faster because it doesn’t use a centralized infrastructure.
The distributed nature of Blockchain provides a huge level of trust. The unchangeable property of Blockchain and its public availability among its users, whether in a public ledger or a private one, provides transparency. Any user of the system can query transactions on a real-time basis.

· In short, by adopting Blockchain people across the world can say goodbye to the middleman, dependence on banks, legal agencies, and hackers.

Where can Blockchain be used?

The Blockchain is ideal for what are known as Smart contracts.

What are smart contracts?

Smart contracts define the rules and penalties around a specific agreement in the same way as traditional contracts do. However, the big difference is that smart contracts automatically enforce those obligations. The contracts are coded so that they are discharged on the fulfillment of specific criteria. Smart contracts enables better management for realizing and administering digital agreements because they are self-verifying and self-executing.

This contract is embedded in the Blockchain making it transparent, immutable, inexpensive and decentralized. Every smart contract has its address in the Blockchain. The contract can be interacted with by using its address presuming the contract has been broadcasted in the network.

Blockchain in data communication

1. Secure Messaging

People worry about social media platforms keeping their private data private. Blockchain provides the solution by decentralizing data to provide a way for only intended users to access any set of data. New messaging systems have begun to capitalize on this powerful concept.
The advancements of the past decades on modern cryptography and distributed systems paved the way forward for a new, publicly accessible, fair platform to modernize message passing. Based on blockchain technology, these modern approaches to secure messaging extends far beyond fintech applications, and very much applies to secure interpersonal and machine-readable communications.

Many central points of failure and control will get eliminated by Decentralization, creating a more stable backplane to establish connectivity and trust. These tenets create an trustless, open environment that will allow users to communicate freely and safely by default.

2. Enterprise-level Communications

TOP Network is a startup that’s building the world’s first decentralized cloud communication network on the Blockchain. It allows individuals and organizations to contribute their idle resources (such as a spare server in a data center) to the network,

and receive rewards in return for their contribution. Resource and service providers join the network transparently via Blockchain technology, which enables the company to build in wider coverage and higher-quality services at lower prices, and also offers substantially more robust security.

3. Secure VoIP

In addition to security and speed, communications providers and consumers also want cost effectiveness. Voice over Internet Protocol (VoIP), which is already a vastly cheaper option than customary telephony, has a genuine future as a decentralized network system.

Blockchain technology removes the centralized access point used in current VoIP solutions. It instead routes the calling party’s signal to a receiving number and replaces it with a distributed network shared by all network users. This eliminates any routing cost, since all routes are already established by the distributed ledger. This also maintains security and maximizes speed of data transfer.

4. Encryption

An integral part of Blockchain’s transport protocols is, Modern encryption which ensures the data privacy and eliminates threats of surveillance by default. Using the Asymmetric key pairs associated with each node Blockchain provides protocols for one to may and one to one encryption. The data packets are decrypted by keys intended for specific nodes. When one node sends a packet to the another node, using the public or pre-arranged shared key of the intended recipient node it encrypts the packet.

5. Blockchain used for securing network packets

The work is initiated for alternative name resolution protocols such as the Handshake Protocol by Blockchain and Web 3 community. Handshake is an ongoing project nearing public launch to establish a decentralized network of DNS servers that utilize crypto-economic incentives to coordinate consensus on the association between names and certificates.

Blockchain technology like the Handshake Protocol creates the ability for canonical ownership records by recording in order that a record exists before another. This confirms that if a person Alice registered a domain name before Bob, and cryptographically signs ownership. The record is immutable across the network, since it is recorded in a decentralized manner, eliminating the vulnerabilities created by centralized CAs.

The possibility of data loss in the case of a server failure for email or messages will be reduced due to decentralized infrastructure, since messages are replicated across a diverse network. It also provides a protected , secure, uncensored mechanism to restore message history in the case of a mail client failure.

6. Blockchain in IOT

In the upcoming days, different Blockchains may serve different tasks. Blockchain network may be a home network, enterprise or the internet. A Decentralize Autonomous organization that runs without human involvement will be created if artificial intelligence is added to the IoT environment that is connected to a Blockchain network.

The link to settle scalability, privacy, and reliability concerns in the Internet of Things is Blockchain technology . This technology can be used for the purpose of tracking billions of enabling the processing of transactions, connected devices and coordination between devices; allow for great savings to IoT industry producers. This decentralized approach would eliminate single points of failure, creating a more strong system for devices to run on. The consumer data will get more private due to cryptographic algorithms used by Blockchains. The blockchain can keep an immutable record of the history of smart devices in an IoT network,. This feature enables the autonomous working of smart devices without the need for centralized authority. As a result, the Blockchain paves path to a series of IoT developments that were extraordinarily difficult, or even impossible to implement without it.

By leveraging the Blockchain, IoT solutions can enable secure, trustless messaging between devices in an IoT network. In this model, the Blockchain will treat message exchanges between devices similar to financial transactions in a bitcoin network. To enable message exchanges, devices will leverage smart contracts which then model the agreement between the two parties.

One of the most exciting capabilities of the Blockchain is the ability to maintain a duly decentralized, trusted ledger of all transactions occurring in a network. This capability is essential to enable the many compliance and regulatory requirements of industrial IoT applications without the need to rely on a centralized model.