All You Need To Know About “BLOCKCHAIN”

Blockchain can be defined as a chain of blocks that contains information. The technique is intended to timestamp digital documents so that it’s not possible to backdate them or temper them. The purpose of blockchain is to solve the double records problem without the need for a central server.

The blockchain is used for the secure transfer of items like money, property, contracts, etc.. without requiring a third-party intermediary like a bank or government. Once data is recorded inside a blockchain, it is very difficult to change it.

Why do we need Blockchain?

Here are some reasons why Blockchain technology has become so popular.

Resilience: Blockchains is often replicated architecture. The chain is still operated by most nodes in the event of a massive attack against the system.

Time reduction: In the financial industry, blockchain can play a vital role by allowing the quicker settlement of trades as it does not need a lengthy process of verification, settlement, and clearance because a single version of agreed-upon data of the shared ledger is available between all stack holders.

Reliability: Blockchain certifies and verifies the identities of the interested parties. This removes double records, reduces rates, and accelerates transactions.

Unchangeable transactions: By registering transactions in chronological order, Blockchain certifies the un alterability of all operations, which means when any new block has been added to the chain of ledgers, it cannot be removed or modified.

Fraud prevention: The concepts of shared information and consensus prevent possible losses due to fraud or embezzlement. In logistics-based industries, blockchain as a monitoring mechanism act to reduce costs.

Security: Attacking a traditional database is the bringing down of a specific target. With the help of Distributed Ledger Technology, each party holds a copy of the original chain, so the system remains operative, even a large number of other nodes fall.

Transparency: Changes to public blockchains are publicly viewable to everyone. This offers greater transparency, and all transactions are immutable.

Collaboration — Allows parties to transact directly with each other without the need for mediating third parties.

Decentralized: There are standards rules on how every node exchanges the blockchain information. This method ensures that all transactions are validated and all valid transactions are added one by one

Blockchain Variants

Public:

In this type of blockchain, ledgers are visible to everyone on the internet. It allows anyone to verify and add a block of transactions to the blockchain. Public networks have incentives for people to join and are free for use. Anyone can use a public blockchain network.

Private:

The private blockchain is within a single organization. It allows only specific people of the organization to verify and add transaction blocks. However, everyone on the internet is generally allowed to view it.

Consortium:

In this Blockchain variant, only a group of organizations can verify and add transactions. Here, the ledger can be open or restricted to select groups. Consortium blockchain is used cross-organizations. It is only controlled by pre-authorized nodes.

Important Real-Life Use Cases of Blockchain

1.Dubai: The Smart City

In the year 2016, smart Dubai office introduced Blockchain strategy. Using this technology, entrepreneurs and developers will be able to connect with investor and leading companies. The objective is to implement blockchain based system which favors the development of various kinds of industries to make Dubai ‘the happiest city in the world.’

2. Incent Customer retention

Incent is CRAAS (Consumer retention as a service) based on Blockchain technology. It is a loyalty program which is based on generating tokens for businesses affiliated with its related network. In this system, blockchain is exchanged instantaneously, and it can be stored in digital portfolios of user’s phones or accessing through the browser.

3. Blockchain for Humanitarian Aid

In January 2017, the united nations world food program started a project called humanitarian aid. The project was developed in rural areas of the Sindh region of Pakistan. By using the Blockchain technology, beneficiaries received money, food and all type of transactions are registered on a blockchain to ensure security and transparency of this process.

Applications of Blockchain Technology

• It is used to create a secure and transparent digital ledger of all transactions.
• It allows you to create a tamper-proof record of academic achievement that is accessible to all students and teachers.
• It is used for creating a more efficient system for trading securities.
• Lenders use blockchain to execute collateralized loans through smart contracts
• Using blockchain technology to record real estate transactions can provide a more secure and accessible means of verifying and transferring ownership.
• Use for keeping data like Social Security number, date of birth, and other identifying information on a public ledger.
• Blockchain technology is also used in the logistics industry as it helps to track items as they move through a logistics or supply chain network.

Limitations of Blockchain technology

Higher costs: Nodes seek higher rewards for completing Transactions in a business that work on the principle of Supply and Demand

Slower transactions: Nodes prioritize transactions with higher rewards, backlogs of transactions build-up
Smaller ledger: It is not possible to a full copy of the Blockchain, potentially which can affect immutability, consensus, etc.

Transaction costs, network speed: The transactions cost of Bitcoin is quite high after being touted as ‘nearly free’ for the first few years.

Risk of error: There is always a risk of error, as long as the human factor is involved. In case a blockchain serves as a database, all the incoming data has to be of high quality. However, human involvement can quickly resolve the error.

Wasteful: Every node that runs the blockchain has to maintain consensus across the blockchain. This offers very low downtime and makes data stored on the blockchain forever unchangeable. However, all this is wasteful because each node repeats a task to reach a consensus.

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