Is blockchain the next revolution in computer science?
If you want to explain blockchain in one word then the word you are looking for is trust. A person cannot trust another person blindly. In order to earn the trust of someone, legitimacy needs to be proven.
Trust, but verify
-Suzanne Massie
The lack of trust led to the evolution of banks which acts as an intermediary in the transaction process. Banks made sure that all transactions are validated before processing by maintaining a centralized ledger (a collection of all financial transactions). Banks have become more powerful entity in the current world and its presence has become indispensable for any transaction to be processed.
What is blockchain technology?
In simple words, blockchain is an immutable digital ledger of all economic transactions stored in a decentralized architecture. The ledgers can not only programmed to keep track of financial transactions but virtually anything of value. Since these ledgers are highly distributed anyone can own a copy of the ledger and they cannot be tampered with false information.
A Distributed Database
Blockchain can viewed as a database which is public, distributed, highly synchronous and secured using the art of cryptography. The information stored on the blockchain exists as a shared - and continually reconciled - database. Thus the records are public and anyone can view the information contained in a ledger.
Roadmap to Blockchain
Blockchain is undoubtedly the ingenious innovation which originated from the white paper published by Satoshi Nakamoto on Bitcoin (A peer to peer way of digital cash transaction without the intervention of middlemen like banks, etc). Blockchain works independently of bitcoin. Bitcoin used the blockchain technology to prove its security.
Blockchain is to Bitcoin, what internet is to email
Features of Blockchain
Blockchain technology is like the internet in which it has in-build robustness. By storing the identical blocks of information across the network, blockchain can't be controlled by a single entity not it has a single point of failure.
Blockchain is transparent and conscientious. It is a self-auditing ecosystem of a digital value. It cannot be corrupted by altering a unit of information (block).
Building blocks of Blockchain
A network of computing nodes make up the blockchain. A Node in a blockchain can be a computer connected to the blockchain network using a client which performs the which helps in validating and relaying the transactions. Node gets a copy of the blockchain (ledger) automatically upon joining the blockchain network.
Every node in the blockchain network is an administrator of the blockchain. These nodes join the network voluntarily and gains an incentive for participating in the network and solving a computational puzzles. This process is known as mining.
Security enhancement in blockchain
Since the data is stored in the distributed format, the blockchain eliminates the risk of centralized data storage and maintenance. A hacker can possibly hack the centralized server and perform any malicious activity over the centralized system. Usernames/Passwords are used as the major form of security in the today's internet world to prevent any hackers from performing unwanted or illegal operations.
In the case of blockchain architecture, it uses security methods like encryption technology. The basis for this is the private and public keys. Public key represents the user's address to the blockchain. The cryptocurrencies sent across the network get stored as belonging to this address. Private key is like the password that gains access to the user for his/her digital assets or cryptocurrencies. Data stored on the blockchain network is incorruptible.
Blockchain Applications
When we think of blockchain the first thing which comes to our mind is the cryptocurrencies. Blockchain can be used for various other applications as well. Some of the currently developing applications which use blockchain as their base are as follows:
- Smart contracts
- Crowdfunding
- Sharing economy
- Governance of digital assets
- Supply chain auditing
- Identity Management
- Land registration
The full capability of blockchain is yet to be leveraged. People are now restricting the usage of blockchain to cryptocurrencies. Soon they will start thinking blockchain as a completely independent unit and realize that blockchain technology is more powerful than what bitcoin is. The realization of what blockchain can do the current internet era is not very far from now.
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