Today's modernized world's needs and necessities are growing rapidly and are being fulfilled through highly complex technologies. Technologies are also changing with the rapid growth of globalization and the economy. First, the invention of the Internet brought a new revolution to human lives. The Internet led to the further advancement of more technologies, making human lives easier and more comfortable. In this article, we shall learn about a new technology called blockchain, a network-based technology regarded as disruptive worldwide.
Blockchain technology a public distributed ledger, it is an immutable ledger made up of blocks complemented with cryptography, earlier data stored on the database and servers in the centralized system. With the advent of blockchain technology, the data is stored on blocks that connects each other forming a chain structure. Every single block contains information from the previous block linked to it. The whole technology is based on the decentralized peer-to-peer network system, which is a fundamental core element of the technology and therefore makes it the most reliable and secure technology for record-keeping in a cryptographic form.
The credits for creating this intriguing technology were given to Stuart Haber and W. Scott Stornetta in 1991 while researching the topic of authentication of digital documents. Although the technology has existed since 1991, it became popularized in 2009 by being the basis of the cryptocurrency Bitcoin.
For instance, suppose there is a new transaction entered, and the transaction is transmitted to a network of computers linked with each other. This network of computers will try to solve the cryptographic mathematical computation. Once this is done, the decrypted information is then validated by the computers, and the data is replicated across the network. For ciphering, data hashing techniques and consensus algorithms are used.
Cryptography is done through the consensus of algorithms. The objective of the consensus algorithm is to bring all the stakeholders of the network to an agreement in which they trust each other. The utilization of these algorithms by cryptocurrencies made them popular among the general public.
There are different types of consensus algorithms. Some important consensus algorithms are listed below:
The basic idea behind this algorithm is that the contestant has to solve the hash or mathematical puzzle first and then reward that computational puzzle in return. The mathematical puzzle is solved through the graphics processing unit(GPU), which has high computational power and requires high electricity. The blockchain will list unsolved problems or pending/unconfirmed transactions. The GPU will try to solve the problem, and once the first node solves it, the other nodes in the network will validate it. After validation, the data is replicated across the network. The popular hash technique used in the proof of work is SHA 256. This hashing technique is used in bitcoin.
In this algorithm, the puzzle is not solved through the GPU. The puzzle is solved in a unique way. Here, validators invest in the coins of a certain cryptocurrency system. Their blockchain will consider the invested coins as a stake. Validators will validate blocks by placing a bet on the block if they discover it on the chain. The probability of winning the bet is based on the number of coins the node has put on the stake. Higher the coins, Higher the probability of the node winning the reward for solving mathematical problems. Ethereum and DogeCoin are a few examples of proof of stake.
The technology has disrupted the market through cryptocurrencies and several other applications in various fields.
The use of blockchain technology in product tracking is a great thing to happen because it will give us true information regarding the product from its origin. what kind of raw material was used in the process of supply chain management of product. Denmark is using blockchain technology in the food supply chain. The use of blockchain technology in product tracking will eliminate the misinformation and cheating of its end users.
The use of blockchain technology in making contracts and formal or informal agreements is a boon for society as it makes people's lives easier by not worrying about any cheating or forgery while making a deal with some third party. Suppose A fruit trader lays down a condition in a contract with a fruit supplier that they will buy the fruits only if it gets delivered to him/her in a truck with a specific temperature. If the condition is not met, the payment will not go through. The payment will be automatically go through the blockchain if it is met. If any further dispute arises, this contract will be valid proof for legal systems like court or tribunal and help quick judgments.
Suppose person 'A' goes on vacation somewhere and gets sick there. He/she need an immediate treatment. The hospital will require the patient's medical history to get a quick diagnosis, and through blockchain network of all hospitals in all cities will help in this situation.
Lastly, more research is being done on blockchain applications. There are a lot more things that will unfurl soon.