Blockchain

What is Blockchain?

Blockchain is a P2P distributed ledger or register technology for

transaction or digital events which is shared among participating parties

This term is coined by BitCoin as cryptocurrencies.But as time elapsed its use case
changes from crypto currencies to a autonomous, transparent and immutable
ledger.

When any transactions happen on network it is notified to participating members

(NODE s) .Each transactions are verified by majority of the participants in the
system. Each transactions or blocks are autonomous and decentralized this
proofs that information which are shared are temper- proof.

when we run blockchain client ,we have to first checkout blockchain history .when
we chekin & commit then each commit will treat as a block in blockchain(i.e
because we have modified state and is immutable).similar to GIT or TFS

P2P nature of blockchain makes it autonomous rather relying on a centralize system

.In this system each nodes are publishing there changes .So each blocks have some
info to validate and prevent merge Conflicts.

Conflicts may occur at any time :-

1)version of history

2)Transparency- Each block in the blockchain are known to all participating

members.

3)Accountability-Each block creation and receiving are accountable by participants.

It internally uses Proof-Of-Work protocol to ensure or verify transaction. if a

transaction is initiated by from Party_A to Party_B .So information about this
transaction is broadcast among each participants(i.e nodes) in that network .As
soon as these nodes get information abot the transaction they will start maintaining
their ledger .Similarly they will also maintain information about all the previous
transactions which have happened in this network. Then each node will collate
each transaction into several transactional blocks. Then each transactional block
are digested in Markel Tree model like structure results a block .Similarly several
transactions happen in the network create chain of blocks .After that each blocks
has its own hashing and previous block of hashing .After getting those hashing
which is treated as challenge in proof of work protocol and also having a chain of
numbers which is treated as proof i.e Proof of work (challenge, proof).Once the
Proof of work is confirmed then each node is notified that someone has got the
proof of work. Who will solve the challenge will get some reward as points for the
effort done by minor (NODE).Then After doing some additional computation(i.e
transaction fees,charges etc ) that transaction will belong to Party_B.

AS we discussed earlier that each block in the block chain contains some
information like :-

1)Hashes(current hash & previous blocks hash)

2)Transactions

3)unstructured data

4)Signature (i.e public keys, which is not treated as identity. So all transactions are
pseudo-anonymous)

5)Application Block(dApps)

These dApps are decentralized and use smart contracts which contain self-
executing code and stores on the blockchain. Ethereum is used to support dApps
(i.e Decentralize app).
Why Blockchain ?

Taditional Transaction system Blockchain Technology

Require third party to execute &
verify transaction
EX:-
To transfer Money need BANK to
execute transaction.
We depends on INSURANCE BROKER
to properly
execute INSURANCE POLICY
Eliminate third party.
To transfer BITCOIN ,need Network of
peers
to execute transaction.
SMART CONTRACTS are triggered by
an events and self-executed by a PRE-
DEFINED ALGORITHM

1) Reduce Settlement time from days to approx instantaneous

2) Removes overhead & cost Intermediaries

3) Reduce risk of conclusion & tempering.

4) it allows us to sync the state of network under adversarial conditions:-

a) Brings everyone on the same page.

b) No centralize decision maker

 c) Every new node can catch up to the current state deterministically without
trusting someone not to lie to them .

Use Case:-

1) Bitcoin (i.e cryptocurrency)

2) Proof of Ownership(physical & digital assets)

3) Smart contracts

4) Financial transactions

5) Certificate

6) Proof of authenticity

7) Decentralize patient records

8) Voting