The Components of Blockchain
Blockchain is an important step or advancement towards technology. It is the continuously developing record list that could be interlinked together for the purpose of making it secured [14]. These records are also called blocks and these blocks are made secured by means of applying cryptography algorithm. All the blocks present in the list eventually consists of a specific cryptographic hash of any block, which is also the predecessor of the block. Furthermore, the particular block consists of transaction of data or a time stamp. The Blockchain design is specifically resistant to any type of modification of data [2]. The technology of Blockchain has the core capability of recording any type of transaction between two parties. Blockchain allows the transactions in the most effective manner. This report will be outlining a detailed description about the technology of Blockchain. Various relevant and significant details will be given here regarding Blockchain and its applications.
Discussion
Part 1: Blockchain
Blockchain can be defined as the technology, which eventually helps with procedure for money transfer easily and also payment processing [4]. The supply chain is subsequently monitored and thus data sharing is done easily. There are three aspects in Blockchain. These are architecture, challenges and features.
- i) Architecture: Blockchain consists of a specific mesh network of several important systems, which are properly linked with each other and are not linked with the server that is centralized. All the significant system in the mesh network define or even agree for the sharing of data and hence remain connected with several constraints, which could be imposed on data to be shared [13]. There are several components of the architecture of Blockchain like transactions, consensus, mining and blocks. These are properly implemented in all the applications of Blockchain.
The first component is transaction. These are smaller blocks that help in building a system of Blockchain. All the transactions consist of various values, specific sender addresses and relevant receiver addresses. The transaction is utilized for shifting of value from an address to another. The significant state of the correct Blockchain is changed [1]. All the nodes hold the copies of Blockchain. Next, the current state is evaluated by means of process of every transaction. The transaction format is either one or more input or output. The input is the significant reference of output for the transactions.
The next component of Blockchain is block. A block is specific data structure in which the transaction set is bundled up and is distributed with the presence of each node in the mesh. Miners are responsible for creating this block. All the blocks comprise of the block headers for the successful verification of block validity and metadata [11]. This metadata consists of nBits, time, nonce, version, merkle root hash and last block header hash. The moment each and every block is amended within the Blockchain, overwriting on them is not possible.
The next component of Blockchain is mining. Mining can be defined as the specific process that is put in the work of real world for the purpose of creation of any valid block and is accepted in the rest of the network [2]. All the miners thus take up the respective pending transactions and thus verifying the accurateness of these transactions.
Transaction Components
The fourth component of Blockchain is consensus. It is utilized for the proper checking or verification of transaction validity. It is the collection of codified rules, which is completely self-enforced.
- ii) Features: The features of Blockchain technology refer to the characteristics of it [13]. The several features of this technology are as follows:
- a) Security: The first and the foremost feature of Blockchain technology. Due to the excess safety or security, Blockchain is widely accepted by each and every user. Moreover, the users of this technology are ensured regarding their money and hence they use this technology for transfer of their money.
- b) Immutability: Blockchain is eventually resistant to any kind of alteration or change and hence the blocks are linked with cryptographic hash and since these transactions are transparent, the users do not worry while utilizing the technology [4].
- c) Reliability and Durability: The third important feature of Blockchain technology is reliability and durability. Since all the networks of this technology are completely decentralized, the central point of failure is not present and there is a resistant power to fight with the cyber attacks or threats. It is also reliable and durable for technology and thus popularity is gained within limited time.
- d) Integrity: The fourth feature is the integrity. All the users could subsequently trust on the technology since the information or data has not been changed or altered for the purpose [3]. All the users are ensured for the integrity of their data and thus properly utilizing the technology to transfer money.
iii) Challenges: The various challenges of Blockchain technology are as follows:
- a) Costs: The first challenge is the initial cost. It is extremely higher than the rest and thus could not be afforded easily. The software and personnel cost are high [14].
- b) High Consumption of Energy: The next challenge is the high energy consumption.
- c) Legacy System Integration: The final challenge is integration with the legacy system. Moreover, it is extremely time consuming.
Part 2: Applications of Blockchain
The two applications of Blockchain technology for the domains of currency and Internet of Things and IoT are as follows:
- i) Currency: The best application of the Blockchain technology in the currency domain is Bitcoin [5]. Bitcoin can be defined as the specific type of cryptocurrency or payment system, which is used in the world. The first digital decentralized currency, Bitcoin is utilized for making system of payment work without administrator help or help from centralized banks. This network is completely P2P or peer to peer and hence all the transactions, taking place are without the intermediaries and within users. Each and every network node verifies the transactions and this is done with cryptography [7]. Bitcoin was invented by SatoshiNakamoto group in the year of 2009. The currencies are eventually made with mining process. It is extremely effective and secured mode of payment.
- ii) Internet of Things: The next domain of Blockchain is Internet of Things or IoT. The application is self driven cars [9]. The main step of the application is for the advanced technological society. This type of service is very effective as all the individuals could simply form any particular agreement amongst themselves to purchase the self driven car and the maintenance cost is shared within them. These individuals would enter in Smart Contract for defining the machine ownership, perfect utilization and maintenance requirement. These protocols of reputation are responsible for simply enabling the services, resources and information within any group [8]. Due to the high efficiency and effectiveness, self driven cars are easily taken by various users. This is the significant integration of Smart contract or IoT with the technology of Blockchain.
Part 3: Socio Technical Aspects
- i) Bitcoin: The various socio technical features of Bitcoin are given below:
- a) Transactions: Easy transactions are possible with Bitcoin [6].
- b) Asymmetric Encryption: As the algorithm of asymmetric key encryption is incorporated, this is extremely secured.
- c) Virtual Money: The aspect is the virtual money. The users do not have to carry the real money and thus it is safe [1].
- d) Mining: The currency of Bitcoin enabled mining process.
- ii) Self Driving Cars: The various socio technical features of self driven cars are given below:
- a) Machine Learning: This is the first and the foremost aspect [10]. As the IoT is incorporated in the application of self driven cars, this particular application comprises of the features like easy lane detection and the ability in identifying all the users. Moreover, it is the basic tool of AI or artificial intelligence.
- b) Easy Usability: The next aspect is the easy usability [8]. This particular application could be easily utilized by all the users, because of the fact that the entire application is extremely simplified.
Conclusion
Therefore, from the above discussion, conclusion can be drawn that Blockchain is considered as one of the most effective and efficient technology that provides various applications for the users. It is the sole kind of distributed ledger, which eventually helps in maintenance of an tamper proof or permanent data transactions record. The functionalities of a Blockchain is same as the decentralized database, which is eventually managed or controlled by the computers within a P2P or peer to peer network. All the computers subsequently maintain the copies of the ledger for the proper prevention of SPOF or single point of failure. Hence each and every copy is updates as well as validated. The most significant applications of this Blockchain mainly include Bitcoin, Ethereum and many others. The linking of the Blockchain is done in an extremely secured or cost effective manner with any digital currency or application. The above report has properly highlighted about the core topic of Blockchain with proper description. Each and every feature, challenge and architecture of Blockchain is provided here.
References
[1] Swan, Melanie. Blockchain: Blueprint for a new economy. ” O’Reilly Media, Inc.”, 2015.
[2] Zyskind, Guy, and Oz Nathan. “Decentralizing privacy: Using blockchain to protect personal data.” In Security and Privacy Workshops (SPW), 2015 IEEE, pp. 180-184. IEEE, 2015.
[3] Kosba, Ahmed, Andrew Miller, Elaine Shi, Zikai Wen, and Charalampos Papamanthou. “Hawk: The blockchain model of cryptography and privacy-preserving smart contracts.” In Security and Privacy (SP), 2016 IEEE Symposium on, pp. 839-858. IEEE, 2016.
[4] Pilkington, Marc. “11 Blockchain technology: principles and applications.” Research handbook on digital transformations(2016): 225.
[5] Eyal, Ittay, and Emin Gün Sirer. “Majority is not enough: Bitcoin mining is vulnerable.” In International conference on financial cryptography and data security, pp. 436-454. Springer, Berlin, Heidelberg, 2014.
[6] Yermack, David. “Is Bitcoin a real currency? An economic appraisal.” In Handbook of digital currency, pp. 31-43. 2015.
[7] Androulaki, Elli, Ghassan O. Karame, Marc Roeschlin, Tobias Scherer, and Srdjan Capkun. “Evaluating user privacy in bitcoin.” In International Conference on Financial Cryptography and Data Security, pp. 34-51. Springer, Berlin, Heidelberg, 2013.
[8] Bojarski, Mariusz, Davide Del Testa, Daniel Dworakowski, Bernhard Firner, Beat Flepp, Prasoon Goyal, Lawrence D. Jackel et al. “End to end learning for self-driving cars.” arXiv preprint arXiv:1604.07316 (2016).
[9] Daily, Mike, Swarup Medasani, Reinhold Behringer, and Mohan Trivedi. “Self-Driving Cars.” Computer 50, no. 12 (2017): 18-23.
[10] Lee, Gim Hee, Friedrich Faundorfer, and Marc Pollefeys. “Motion estimation for self-driving cars with a generalized camera.” In Computer Vision and Pattern Recognition (CVPR), 2013 IEEE Conference on, pp. 2746-2753. IEEE, 2013.
[11] Cachin, Christian. “Architecture of the Hyperledger blockchain fabric.” In Workshop on Distributed Cryptocurrencies and Consensus Ledgers. 2016.
[12] Back, Adam, Matt Corallo, Luke Dashjr, Mark Friedenbach, Gregory Maxwell, Andrew Miller, Andrew Poelstra, Jorge Timón, and Pieter Wuille. “Enabling blockchain innovations with pegged sidechains.”
[13] Pass, Rafael, Lior Seeman, and Abhi Shelat. “Analysis of the blockchain protocol in asynchronous networks.” In Annual International Conference on the Theory and Applications of Cryptographic Techniques, pp. 643-673. Springer, Cham, 2017.
[14] Wright, Aaron, and Primavera De Filippi. “Decentralized blockchain technology and the rise of lex cryptographia.” (2015).
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