BLOCKCHAIN TECHNOLOGY (DISTRIBUTED LEDGER TECHNOLOGY)
A Blockchain is a database that stores encrypted blocks of data then chains them
together to form a chronological single-source-of-truth for the data.
Blockchain is a type of distributed ledger for maintaining a permanent and tamper-proof
record of transactional data.
Blockchain is a peer-to-peer decentralized network built on the basis of the internet. A
secure, shared, distributed and decentralized ledger used to execute transactions.
BLOCK CHAIN TERMINOLGIES
BLOCKS
Bundle of Transactions.
All blocks are linked using their hash.
Data can’t be changed in one block without breaking the chain.
In a Blockchain every block has its own unique nonce and hash.
MINERS
Mining is the process by which transactions are verified and added to a blockchain.
NODES
A node is a client, which owns the block.
Nodes can be any kind of electronic device that maintains copies of the blockchain and
keeps the network functioning.
ADVANTAGES AND DISADVANTAGES OF BLOCK CHAIN
ADVANTAGES
Improved accuracy by removing human involvement in verification
Cost reductions by eliminating third-party verification
Once a transaction is confirmed, it is stored on the ledger and protected using
cryptography.
Decentralization makes it harder to tamper with
Transactions are secure, private, and efficient
Transparent technology
No Government Interference
Faster transaction settlements
DISADVANTAGES
Significant technology cost associated with mining bitcoin
Low transactions per second
History of use in illicit activities
Regulation
Power use
It opens up possibilities for money laundering
WHY WE NEED BLOCKCHAIN
Bring Trust: To establish trust between ourselves, we depend on individual third parties
such as banks, land registries, government etc.
Decentralization: Chances of error, mistakes and corruption can happen in centralized
control systems.
Remove Middle Man: They always comes with somewhat risk and cost.
INDUSTRY APPLICATION AND USE OF BLOCKCHAIN
BANKING AND FINANCE
By integrating blockchain into banks, consumers can see their transactions
processed in as little as 10 minutes.
With blockchain, banks also have the opportunity to exchange funds between
institutions more quickly and securely.
Blockchain technology also stands to eliminate expensive intermediary fees that
have burdened both individuals and businesses, especially when it comes to
remittances.
CURRENCY
The U.S. dollar is controlled by the Federal Reserve (Central Authority System). If
a user’s bank is hacked, the client’s private information is at risk.
Blockchain allows Bitcoin and other cryptocurrencies to operate without the
need for a central authority.
This not only reduces risk but also eliminates many of the processing and
transaction fees.
HEALTHCARE
Health care providers can leverage blockchain to store their patients’ medical
records.
These personal health records could be encoded and stored on the blockchain
with a private key, so that they are only accessible by certain individuals, thereby
ensuring privacy.
SUPPLY CHAIN MANAGEMENT
In the IBM Food Trust, suppliers can use blockchain to record the origins of
materials that they have purchased. This would allow companies to verify the
authenticity of their products.
Blockchain allows for real-time tracking and viewing accurate, tamper-proof data
automatically tracked by GPS and IoT devices.
REAL ESTATE
If property ownership is stored and verified on the blockchain, owners can trust
that their deed is accurate and permanently recorded.
Real Estate can benefit from blockchain solutions by enabling purchase of
property via digital currency.
VOTING
Block chain could be used to facilitate a modern voting system that eliminate
election fraud and boost voter turnout.
GOVERNMENT & E-GOVERNANCE
Blockchain software can help in creating full scale eGovernance ecosystems by
providing verified IDs registered on the network.
Such systems could help citizens vote, pay taxes and perform other government-
related transactions with increased privacy and security.
LIMITATION OF BLOCKCHAIN TECHNOLOGY
LACK OF AWARENESS
How people could implement it in different situations.
LIMITED AVAILABILITY OF TECHNICAL TALENT
There are not so many developers available who have specialized expertise in
blockchain technology.
IMMUTABLE
In immutable, we cannot make any modifications to any of the records.
KEY MANAGEMENT
As we know, block chain is built on cryptography, which implies that there are
different keys, such as public keys and private keys.
SCALABILITY
Bitcoin was not developed to do the large scale volumes of transactions.
Currently, Bitcoin can process a maximum of seven transactions per second.
CONSENSUS MECHANISM
In the block chain, we know that a block can be created in every 10 minutes.
It is because every transaction made must ensure that every block in the block
chain network must reach a common consensus.
