What is Blockchain? The blockchain concept was
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Posted On: 11/21/2019 11:19:57 PM
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What is Blockchain?
The blockchain concept was first introduced by Stuart Haber and W. Scott Stornetta in 1991 as “a cryptographically secured chain of blocks,” which means a chain or blocks that are linked and cryptographically secured. Each block is a combination of three items; a hash pointer to the previous block, a timestamp, and transaction data. By design, blockchains are secure and difficult to modify.
There are three key reasons why blockchain is becoming mainstream today:
- Increased digital processing power
- Rapid growth in cybercrimes
- Rise of bitcoin and cryptocurrency
Cybercrime has grown multifold in the past few years. The hacking of over a billion Yahoo accounts, the Equifax data breach, and increased ransomware damages are just a few incidents. As a matter of fact, over one million cyber threats are released every day and by 2020, over 200 billion IoT devices will need security. Today, Cyber Security is one of the biggest challenges for CEOs.
Bitcoin and cryptocurrency are one of the biggest reasons for the increasing popularity of blockchain. Bitcoin is a cryptocurrency created by an anonymous person named Satoshi Nakamoto, who used blockchain technology to create and distribute secure digital currency. Blockchain is a technology to create and maintain a cryptographically secure, shared, and distributed ledger (a database) for transactions. Blockchain brings trust, accountability, and transparency to digital transactions. Blockchain is a technology that allows individuals and companies to make instantaneous transactions on a network without any middlemen (like banks), it underpins digital currency Bitcoin, Litecoin, Ethereum, and the like, transactions made on blockchain are completely secure, and, by function of blockchain technology, are kept as a record of what happened. The tech allows digital information to be distributed, but not copied. The information is constantly reconciled into the database, which is stored in multiple locations and updated instantly. It works with Blocks, where as spreadsheet works with “rows” and “columns”. A block in a blockchain is a collection of data. The data is added to the block in blockchain, by connecting it with other blocks in chronological others creating a chain of blocks linked together. The first block in the Blockchain is called Genesis Block. Blockchain is a distributed ledger, which simply means that a ledger is spread across the network among all peers in the network, and each peer holds a copy of the complete ledger. No central authority to control or manipulate it. All participant talks to each other directly. This allows for data exchange to be made directly with third-parties involvement. The ledger is spread across the whole network which makes tampering not so easy. Cryptography is used for the security services to make the ledger tamper-proof . Data can only be added in the blockchain with time-sequential order. This property implies that once data is added to the blockchain, it is almost impossible to change that data and can be considered practically immutable. This gives blockchain the ability to update the ledger via consensus. No central authority is in control of updating the ledger, any update made to the blockchain is validated against strict criteria defined by the blockchain protocol and added to the blockchain only after a consensus has been reached among all participating peers/nodes on the network. Blockchain is the technology of the year 2018. You may thank bitcoin, altcoins (cryptocurrency), and ICOs (Initial Coin Offering) for the rise of blockchain. Thousands of blockchains have already been created and available publicly on GitHub and other open source platforms.
Software for blockchain is written in Digital Asset Modeling Language (DAML) which is a computer language designed for modeling agreements between financial institutions and their customers. It was developed by a technology firm called Elevence and was published by Digital Asset after it acquired Elevence. https://daml.com/
Blockchain software design is not unique, its application can be used in many industries and written in specific ways to fit the needs of the uers, any software designer can write such a software. Capstan created the unique proprietary blockchain software for QMC which embedded the trade mark "QDX" on it. QMC can sell its proprietary software to its licensees and customers. Through the QDX blockchain, QMC can monitor the financial transaction between its licensees and their customers, thus their sales to ensure fair royalties payment without a chance of cheating.
This is how the blockchain system work:
A node starts a transaction by first creating and then digitally signing it with its private key (created via cryptography) . A transaction can represent various actions in a blockchain. Most commonly this is a data structure that represents transfer of value between users on the blockchain network. Transaction data structure usually consists of some logic of transfer of value, relevant rules, source and destination addresses, and other validation information. A transaction is propagated (flooded) by using a flooding protocol, called Gossip protocol, to peers that validate the transaction based on preset criteria. Usually, more than one node is required to verify the transaction. Once the transaction is validated, it is included in a block, which is then propagated onto the network. At this point, the transaction is considered confirmed. The newly-created block now becomes part of the ledger, and the next block links itself cryptographically back to this block. This link is a hash pointer. At this stage, the transaction gets its second confirmation and the block gets its first confirmation. Transactions are then reconfirmed every time a new block is created. Usually, six confirmations in a network are required to consider the transaction final.
The blockchain concept was first introduced by Stuart Haber and W. Scott Stornetta in 1991 as “a cryptographically secured chain of blocks,” which means a chain or blocks that are linked and cryptographically secured. Each block is a combination of three items; a hash pointer to the previous block, a timestamp, and transaction data. By design, blockchains are secure and difficult to modify.
There are three key reasons why blockchain is becoming mainstream today:
- Increased digital processing power
- Rapid growth in cybercrimes
- Rise of bitcoin and cryptocurrency
Cybercrime has grown multifold in the past few years. The hacking of over a billion Yahoo accounts, the Equifax data breach, and increased ransomware damages are just a few incidents. As a matter of fact, over one million cyber threats are released every day and by 2020, over 200 billion IoT devices will need security. Today, Cyber Security is one of the biggest challenges for CEOs.
Bitcoin and cryptocurrency are one of the biggest reasons for the increasing popularity of blockchain. Bitcoin is a cryptocurrency created by an anonymous person named Satoshi Nakamoto, who used blockchain technology to create and distribute secure digital currency. Blockchain is a technology to create and maintain a cryptographically secure, shared, and distributed ledger (a database) for transactions. Blockchain brings trust, accountability, and transparency to digital transactions. Blockchain is a technology that allows individuals and companies to make instantaneous transactions on a network without any middlemen (like banks), it underpins digital currency Bitcoin, Litecoin, Ethereum, and the like, transactions made on blockchain are completely secure, and, by function of blockchain technology, are kept as a record of what happened. The tech allows digital information to be distributed, but not copied. The information is constantly reconciled into the database, which is stored in multiple locations and updated instantly. It works with Blocks, where as spreadsheet works with “rows” and “columns”. A block in a blockchain is a collection of data. The data is added to the block in blockchain, by connecting it with other blocks in chronological others creating a chain of blocks linked together. The first block in the Blockchain is called Genesis Block. Blockchain is a distributed ledger, which simply means that a ledger is spread across the network among all peers in the network, and each peer holds a copy of the complete ledger. No central authority to control or manipulate it. All participant talks to each other directly. This allows for data exchange to be made directly with third-parties involvement. The ledger is spread across the whole network which makes tampering not so easy. Cryptography is used for the security services to make the ledger tamper-proof . Data can only be added in the blockchain with time-sequential order. This property implies that once data is added to the blockchain, it is almost impossible to change that data and can be considered practically immutable. This gives blockchain the ability to update the ledger via consensus. No central authority is in control of updating the ledger, any update made to the blockchain is validated against strict criteria defined by the blockchain protocol and added to the blockchain only after a consensus has been reached among all participating peers/nodes on the network. Blockchain is the technology of the year 2018. You may thank bitcoin, altcoins (cryptocurrency), and ICOs (Initial Coin Offering) for the rise of blockchain. Thousands of blockchains have already been created and available publicly on GitHub and other open source platforms.
Software for blockchain is written in Digital Asset Modeling Language (DAML) which is a computer language designed for modeling agreements between financial institutions and their customers. It was developed by a technology firm called Elevence and was published by Digital Asset after it acquired Elevence. https://daml.com/
Blockchain software design is not unique, its application can be used in many industries and written in specific ways to fit the needs of the uers, any software designer can write such a software. Capstan created the unique proprietary blockchain software for QMC which embedded the trade mark "QDX" on it. QMC can sell its proprietary software to its licensees and customers. Through the QDX blockchain, QMC can monitor the financial transaction between its licensees and their customers, thus their sales to ensure fair royalties payment without a chance of cheating.
This is how the blockchain system work:
A node starts a transaction by first creating and then digitally signing it with its private key (created via cryptography) . A transaction can represent various actions in a blockchain. Most commonly this is a data structure that represents transfer of value between users on the blockchain network. Transaction data structure usually consists of some logic of transfer of value, relevant rules, source and destination addresses, and other validation information. A transaction is propagated (flooded) by using a flooding protocol, called Gossip protocol, to peers that validate the transaction based on preset criteria. Usually, more than one node is required to verify the transaction. Once the transaction is validated, it is included in a block, which is then propagated onto the network. At this point, the transaction is considered confirmed. The newly-created block now becomes part of the ledger, and the next block links itself cryptographically back to this block. This link is a hash pointer. At this stage, the transaction gets its second confirmation and the block gets its first confirmation. Transactions are then reconfirmed every time a new block is created. Usually, six confirmations in a network are required to consider the transaction final.
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