Imagine a future in which you can digitally carry your identity, prove your college degree, and send money to someone without using a bank — in seconds rather than days, without paying expensive fees. Or one in which you store your digital identity and money in an online wallet that is not connected to a bank, thereby making you your bank and exercising total control over your money. You do not need authorization from a bank to access or move it, and you never have to worry about a third party seizing it or a government altering its economic policy.

This is not a future world; it is a world in which a minor but rising number of early adopters such as BizSecure. These are just a handful of the critical blockchain technology use cases that are reshaping how we trust one another and do transactions. Nonetheless, for many, blockchain technology remains a strange or frightening concept. Some are even doubtful that humanity will ever deploy this technology. This pessimism is justified at the moment, as blockchain technology is still in its infancy in terms of development and general usage. Nevertheless, 2021 will be the late 1990s of Blockchain, as the late 1990s were of the internet. Like the internet, blockchain technology is not a fad; it is here to stay, and you, too, are ahead of the curve if you are reading this and have downloaded the BizSecure digital wallet.

What does a blockchain look like

A blockchain could be categorized into two parts: the block and the chain, which are both interconnected. A block is a chunk of data that is linked to other blocks in a virtual chain by the order in which they were created. A blockchain can be thought of as a railway consisting of several cars connected in a single line, with each vehicle containing a certain quantity of data. Like passengers in a real-life train carriage, Blocks can only hold a given amount of data before they become overburdened with information. Each block also carries a timestamp, which ensures that it is apparent when the data was captured and saved - something critical for things like transaction or supply chain data, where knowing when a payment or item was handled is critical to understanding the situation.

What is Blockchain

Blockchain is a decentralized ledger technology that underpins bitcoin. Satoshi developed bitcoin, and blockchain technology was a critical component. Blockchain technology is highly safe and is based on a decentralized consensus process, which means that no single entity can control it. Two essential blockchain properties are immutability and distribution. Due to the ledger's immutability, you can always rely on it to be correct. The distributed nature of the Blockchain protects it against network threats. Each ledger transaction or record is included within a "block." For instance, BLOCKS on the Ethereum ERC-777 blockchain typically include over 70 transactions. Each block contains information dependent on and related to the preceding block, forming a chain of transactions across time. As a result, the term "blockchain" was coined.

Components of Blockchain

To grasp what blockchain technology is in general, as opposed to its application to cryptocurrencies, it is vital to understand the logical components of a blockchain ecosystem and its functions. Any blockchain ecosystem is composed of four (4) primary components:

  • A node-connected application
  • A distributed ledger(e.g., BLOCKS, Hyperledger fabric, Indicio)
  • An algorithm for achieving consensus(BizSecure IDS powered by BLOCKS; Verifiable Credentials or Smart Contracts)
  • A virtual machine(node)

We are aware that additional, detailed decompositions have been developed, and we acknowledge that they exist. However, we opted to break them down into four components since it makes for a more straightforward introduction to the sector, and features of most of the decompositions fit into one of these four broad categories as well.

How does Blockchain Work?

To prevent someone from manipulating the network's transaction history, the network's community must agree on a shared "reality." In a blockchain, transactions are recorded in blocks, and each freshly created block has a unique identifier called a "hash" that refers to the previous block. These blocks form a chain, and this chain is unbreakable. In the case of blockchains such as BLOCKS or Indicio Tech, trust is established by technological qualities such as the public viewability of all blocks. Furthermore, no transaction is added to a block until it has been validated, a specialized sort of computer on the network. As a result, the community assures that no fraudulent transaction is recorded on the Blockchain. As a result, a blockchain can be utilized by parties that do not trust one another to do business since their transactions are tamper-proof.

When a user makes a transaction through the Blockchain, a message is formed that contains both the sender's and receiver's public addresses and the amount being sent. The sender takes this data, mixes it with their private key, and then generates a hash of it (turns it into a fixed-length code.) This generates a digital signature confirming the sender wants to transmit the specified amount of bitcoin to the receiver. The sender then encrypts and broadcasts the message together with the digital signature and their public key. It's almost as if you're saying, "Hey, everyone!" I'd want to send this individual bitcoin."

(Note: for most wallets and other applications, all of this occurs "behind the scenes," and users are not required to interact directly with the procedures.)

The packed transaction is added to a queue of other unconfirmed transactions awaiting inclusion on the Blockchain, referred to as a "mempool." In the case of the Bitcoin network, miners who successfully discover new blocks through proof-of-work then select a batch of transactions from the mempool (typically those with the highest fees).  To verify each transaction to ensure the sender has the amount of bitcoin they wish to send, run it through software to ensure the packaged data (digital signatures, messages, and public keys) are legitimate, and add it to the n-block chain. This is similar to the technique employed in proof-of-stake blockchains, except that instead of mining nodes identifying and confirming transactions, the process is carried out by users who have locked away a certain amount of money, referred to as "stakers" or "validators."

Nodes are capable of a wide variety of operations. These tasks include archiving all transaction data, confirming transactions, and adding new blocks to the Blockchain in the case of mining nodes or validator nodes. It cannot be changed or redone once a transaction is accepted and added. That is why blockchain-based data is said to as "immutable."

Types of Blockchain

There are basically four types of Blockchain

  1. Public blockchains

Public blockchains are decentralized, open networks of computers that are accessible to anybody requesting or validating a transaction (check for accuracy). Those that validate transactions (miners) get rewarded. Public blockchains utilize proof-of-work or proof-of-stake consensus procedures. The BLOCKS, Ethereum (ETH), and Indicio Tech blockchains are three  examples of public blockchains.   

  1. Private Blockchains

Private blockchains are not public; access to them is restricted. Individuals wishing to join must get authorization from the system administrator. They are often centralized, meaning a single body governs them. Hyperledger Fabric, for example, is a private, permissioned blockchain.

  1. Consortia or Hybrid Blockchains

Consortiums are a hybrid of public and private blockchains with centralized and decentralized functionality. For instance, the Energy Web Foundation, Dragonchain, Polygon, and R3 are all examples.

  1. Side-chains

A side-chain is a blockchain that exists independently of the main chain. It enables the transfer of digital assets across two distinct blockchains, hence increasing scalability and efficiency.

How does the transaction work on Blockchain

A third entry cryptographically secures transactions on a blockchain. This results in a tamper-resistant record of transactions kept in blocks and confirmed by a distributed consensus method. Additionally, these consensus processes ensure that new blocks are added to a blockchain. Proof-of-work (PoW), which is sometimes referred to as "mining," is an example of a consensus process. Mining is not a need for all blockchains; it is merely one sort of consensus mechanism that Bitcoin and Ethereum now utilize, while Ethereum intends to switch to another—proof-of-stake (PoS).

The following diagram illustrates how this procedure works using Bitcoin, for example. When transferring Bitcoin, you pay a tiny fee (in bitcoin) to have your transaction validated by a network of computers. Your transaction is then combined with those currently queued to be included in a new block. The computers (nodes) then work to validate the block's list of transactions by solving a complex mathematical problem and generating a hash, which is a 64-digit hexadecimal integer. When a block is solved, it is added to the network—and your fee, along with all other transaction fees in that block, is the miner's reward.

A unique key is issued to each new block added to the network (via cryptography). Each new key is obtained by inputting the preceding block's key and information into a formula. As additional blocks are created as part of the continuing mining process, they become increasingly secure and difficult to manipulate. Anyone who is detected attempting to modify a record will be disregarded. All subsequent blocks are thus dependent on the information contained in previous blocks—and this reliance between blocks creates a secure chain known as the Blockchain. This is seen below for housing records that are saved on the Blockchain. For instance, Block 2 generates a key by combining all of the data from Block 1 (including the key) and feeding it into a formula. Block 3 generates a new key by combining all of the data from Blocks 1 and 2 (including the key) and inserting it into a formula. As a result, the procedure continues endlessly. 

 

Benefits of Blockchain Technology Over Conventional Finance?

Trustless: Because the Blockchain is immutable, it automates trustworthy transactions between unrelated counterparties. Transactions are only carried out when both parties satisfy predefined requirements.

Unstoppable: Once the requirements specified in a blockchain protocol are satisfied, a begun transaction cannot be reversed, altered, or terminated.

Immutable: A blockchain's records cannot be altered or tampered with — it can never be hacked. A new block of transactions is added after a complex mathematical problem has been solved and validated by a consensus process.

Decentralized: The network is not maintained by a single body. Unlike centralized institutions, a consensus is used to make decisions on the Blockchain, creating organizations like DAO

Transparent and cost-efficient: can help serve consumers, corporations, and governments in the digital registry, verification, trade, transfer, and settlement of new and existing asset grids. A good example is The BLOCKS BizSecure integration.

Peer-to-Peer: Cryptocurrencies such as BLOCK enable you to transfer cryptos directly to anybody, anywhere in the world, without the use of an intermediary such as a bank, which would charge transaction or handling fees.

Use Cases

  • Data security and verification tools
  • Immutable data storage
  • Drivers Licenses
  • Voter Registration Cards
  • Proof of Ownership
  • Proof of Vaccination
  • Flight Cards
  • Smart Contract Transactions

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