Blockchain : Next Stage of Internet!

What is Block chain?

Simply put, it is a continuously updated record of who holds what. The blockchain is the technology behind cryptocurrencies like Bitcoin and Ethereum. The blockchain is the data repository which in itself has trust embedded in it. How? I will explain it later in this post. Basically, it holds all the transactions being done in the whole world in the form of link Blocks and every previous transaction holds the pointer to the next transaction succeeding it. These list of records are known as Distributed Ledger. The ledger is decentralized and available for everyone to see in an encrypted form. All the records in the Blockchain are secured using Cryptography.

How does Blockchain come into existence?

Our current internet is an internet of information. It is based on copying and distributing the information. Information can be anything like audio, video, image, document, etc. for e.g If you are watching a video on youtube, you are watching the digital copy of the original. Take another example, you are downloading a pdf file on your pc. Here you are using the digital copy of the original pdf file which is located on the distant server. This copying thing is ok in case of videos and files. But what if we think about money, assets, etc. On the internet that we are using today anyone can copy and give you 100$ while him still having that 100$. For e.g if a person A sends 100$ to person B from his account. we don’t want person A still have that 100$ in his account. This is basically called Double Spending Problem by Cryptographists. Double Spending Problem means that there are two digital copies of something that should unique. And here comes the Blockchain. Blockchain was the first to solve this problem using cryptography.

Where is the Blockchain applied?

As said by cryptographists, The Blockchain will be applied in FITS Model.

F – Fraud.

I – Intermediary.

T – Throughput.

S – Stable Data.

Basically, if there is an environment where there is a possibility of fraud. Where there are many middle men, where there is less throughput (i.e. no of transactions per sec) or stability of data is not ensured. Blockchain comes into the picture. 

How does Blockchain help?

Simply think of a scenario where you and many people on the internet have Bank Accounts. Anyone can increase the amount, decrease the amount and do whatever they want with their account. A way they could not do it is keeping a centralized server to keep a check on all accounts. In the real world, this is done by our banks. But this has some disadvantages, suppose you want to transfer some money to your friend's account, you first have to go to the bank transfer the amount to the bank and then they will transfer the respective amount to your friend(eg. RTGs), which in turn is time-consuming. 

Also, on the internet, while shopping or booking a ticket on Irctc we have to go through payment gateways, they cost us some extra money. These are intermediaries which are sometimes not secured too.

Blockchain works on peer-to-peer networking where every node(PCs or laptops) is connected to another node without going through a separate server computer. Basically, there is no central authority still the most secure. How?. Because if someone has to do a transaction, it is sent to every node on the network in encrypted form and all of them has to verify the transaction. If there is a consensus then only the transaction proceeds. Also, there are no intermediaries, therefore your transaction cost is lowered. Also, the stability of data is maintained in the Blockchain.

Talking about throughput, in case of digital currency like Bitcoin, throughput is only 10 trans/sec. while Visa/master card can do 80K trans/sec. but the study is on and the throughput can go to 400K trans/sec using more processing power.

For e.g if you want to buy a car now, you will go to the showroom, know the details or history of the car, do a lot of paper work, then your documents will be verified, you pay the money, and then the car will be registered under your name and finally, you get the keys. This process can somewhere take between 4-5 days. Now, Know how will Blockchain work. You go online, you get the details of the car show room and the car, they will be correct as trust is embedded in the system. You can pay directly to their account and the car will be registered under your name in Blockchain database. Now, your Id in Blockchain database will show that car. This all will take few minutes to complete. 

How does Blockchain technology works?

As of now, if we do a transaction, there are two separate ledgers of both buyer and seller. Two separate ledgers of the same transaction are a waste of memory. The Blockchain only creates a single ledger of the transaction which would be available to all the nodes in the network. Basically, whenever some one initiates a transaction, the transactions are sent to every node on the network in encrypted form. If the transaction is verified by consensus, then it becomes the block and it is attached to the chain of the existing verified blocks and then the transaction is completed.

Blockchain technology is the future of Business, on how we will transact online. Like the Internet is the technology that has helped people to communicate, Blockchain is the technology that will help people to transact.

The blockchain is a revolutionary technology that is called the next stage of Internet by many cryptographists. I hope this Information about Blockchain helps. Finally, Thank you.