What is Block Chain Technology ?As per a Developers : It is a set of protocols and encryption techniques to store data securely over distributed network. It works like a Digital Ledger over a distributed network. Data stored in it is temper proof and immutable.
As per Technology : It is a driving force which will lead us to develop next generation of Internet i.e. Web 3.0/Decentralized web.
Others : It is a tool for decentralized world to remove the deficiencies in our traditional system.
It will create trust between parties
HistoryIn year 1991 a group of researchers brought Digital Time Stamps as Block chain concept.
It was brought to reality by "Satoshi Nakamoto" in year 2009 in the form a digital cryptocurrency named "Bitcoin".
In later 2013 Ethereum was proposed by a cryptocurrecy researcher and a programmer named "Vitalik Buterin".
Areas of Use- Block chain technology's version 1.0 was used to develop Cryptocurrency like Bitcoin. Bitcoin is a peer to peer electronic cash network.
- Block chain technology's improved version i.e 2.0 by used by Ethereum. On this plarform programmers have developed Social Network Applications, Identity systems, Prediction Market Applications, Financial Applications on Ethereum.
-Tech community is finding other potential uses of the technology.
Financial Applications : To redesign the costly legacy workflows to overcome 3rd party centralized management, transaction processing time and transaction fees issues.
Health Care Applications : To remove the need of 3rd party verification firms to link patient health records.
Retail & Manufacturing : To develop a decentralized better supply chain.
Government : For tax collection and to develop a system for traceability and transparency that how the funds are being collected and spent.
Composition of a Block ChainData in a block chain is stored in cryptographic chain of blocks which are interlinked with each other. An individual Block contains Data(1), Hash(2), Hash of Previous block(3).
1. Data : Is like From, To, Amount or other Information .
2. Hash : It can be a GUID or a finger print impression which will be always unique through out the block chain. Hashing algorithm can be different for generating hash values for different block chains.
Genesis Block : It is the first block of the chain which do not contain the previous hash value and block chain begins from this special block.
Why Block Chain is so Secure !!!Distributed Network : The factor that makes a block chain secure is that the data is on a Peer to Peer Network. That means on distributed network . Its like we have a common register to mark daily attendance and to get the final attendance of whole office that sheet has to be passed through every desk to get employee signature based attendance.
At every stage, the network of participants must agree about the latest block of transactions. By a process of eliminating duplicate entries, majority consensus, double checking etc agreement about new block is made. With this and with the systematic layering of the blocks a block chain becomes irreversible and immutable.
No Tempering : If someone tries to change the Hash of a block it will no longer be the same block and its reference to previous and next block breaks. And other nodes will not accept this copy of block and this is how data tempering of data becomes impossible in a block Chain.
Proof of Work : This mechanism is based on slow and steady moral. In this programming world their can be intelligent minds that can write algorithm to alter whole block chain hash values through probability matrix. But for that they have to go through number of blocks quickly and rearrange the values. To avoid this situation block chain technology slows down the formation and alteration of a block. Generally 10 minutes per block. With this if anyone tries to run its algorithm to change whole chain hash values , that becomes impossible due to non availability of resources on time.
Block Size : In a block chain a block size never exceeds 1 Mega Byte.
Prefixed Zeros : Prefixed/Suffixed zeros in hash values of blocks by block chain developers increase the complexity of understanding the hash algorithm and it slows down the traceability of blocks in a block chain.
Private key : Example eWallet account protection through password.
Companies that are working on Block Chain Technology1. Infosys
2. Anthem Infotech Pvt. Ltd [ http://antheminfotech.com ]
3. Microsoft Azure
5. ICICI Bank Ltd.
Related TermsSmart Contracts : Algorithms which can execute automatically. It can be said that in Block chain version 2.0 smart contracts have replaced the limited static information with smart contracts.
Bitcoin : A digital money distributed over peer-to-peer network.
Ethereum : Ethereum is open source public block chain based distributed platform which is featuring smart contracts. It assumes each block a separate virtual machine.It is a largest network for software developers to develop and build distributed block chain based applications.
Ether : Is a crypto currency whose backbone block chain was based on Ethereum platform.
Mining : Is a process to predict the correct block address to submit the verification in distributed network consensus. First submitter among all the miner gets monitory reward for each submission. Mining needs special hardware setup and electricity consumption.
Thanks for reading an introduction about Block Chain above. I am not making this post too long so i will be sharing the detail of the terms i have used above for introduction in my upcoming articles.