Overview
Last updated
Last updated
Blockchain is an adnaved database mechanism and a form of distributed ledger that validates data in blocks with connected peer nodes. Data will be replicated on each nodes and no modification of data is allowed unless the network consent to the action(s). This prevents unauthorised transactions in the network and allow consistency of data across different nodes.
Distributed Ledger is a database spreading across several nodes that replicates identical copy of ledger records. Each node votes on the new ledger (consensus algorithm), updates itself independently and not maintained by central authority. This results in decentralised activities without the need of dependence on government, banks or compliance authority. This presents a new way for individual to have rights over their own record and information across the network.
Blockchain is a form of distributed ledger technology. All blockchains are distributed ledgers but not all distributed ledgers are blockchains. The difference is how data are strcutured in blockchain networks. Data are grouped as blocks, linked to one another chronologically and encrypted securely. This meant that blockchain only supports an append-only structure for a continuous growing list of new ledgers.
Computationally expensive algorithm for miners to mine blocks to obtain the correct hash and add the hash to the next block to mine.
This algorithm prevents spammers from flooding the network as each new action would require a new hash to be mined which computationally takes time. Bitcoin uses PoW to reward miners for every block mined with the correct hash. In order for PoW network to be disrupted, it requires a 51% control of hashing power within the network but it may be too costly to achieve.
Validators are chosen to create new blocks based on the amount of cryptocurrency they hold or "stake". It reduces the need for computational work and energy consumption. The validator is then responsible for checking that new blocks propagated over the network are valid and occasionally creating and propagating new blocks themselves. If they try to defraud the network (for example by proposing multiple blocks when they ought to send one or sending conflicting attestations), some or all of their staked cryptocurrency can be destroyed. Ethereum 2.0 uses PoS as their consensus algorithm.
It is based on PoS and network users vote to delegate block validation rights. There will be a limit of delegates for each block and delegators may not always delegate the subsequent blocks. Voters will stake their cryptocurrencies and vote their delegator to validate a block. Delegator with most votes will validate the block, get transaction fees as rewards and distribute to voters who chose the current delegator. Voters can vote out any delegator that attempts malicious activities. EOS and Tron uses DPoS as their consensus algorithm.
Banking and Finance Transactions
Stock Trading
Crowdfunding
Voting System
Wills & Inheritances
Health Information Exchange
Law Enforcements
Bitcoin
Ethereum
Dock
Decentralisation and transparency
Security due to distributed consensus algorithm and secure cryptographic protocols
Immutability from alteration
Speed
Scalability
Energy Consumption
Hyperledger
Corda
Effienct due to fewer participants
Control over data and transactions
Privacy by restricting who can be in the network
Centralisation
Trust
Isolation from other networks
How does Blockchain differ from traditional databases?
How does consensus algorithm work in blockchain and explain some practical uses.
Identify advantages and disadvantages to both public and private blockchains.
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