Hi everyone, I'd like to present what is Blockchain and some important characteristics.
Introduction - What is BlockChain?
Bitcoin is well known as the most successful cryptocurrency nowadays. It was proposed and implemented under the pseudonym of Satoshi Nakamoto in 2009. Blockchain is the core technology that supports Bitcoin. It was initially implemented to solve the double-spending problem. Basically, it is a decentralized database (or ledger) that allows digital transactions in a trustless environment. This ledger is replicated and shared among the members of a network [1]. Transactions are permanently stored in a chain of blocks since inception. Members of the network legitimize these transactions through a consensus mechanism. If something changes in one machine, then it changes everywhere. It is computationally infeasible to fake a block but it is very easy to detect the fake block. Therefore, a trusted third party is no longer needed.
Blockchain has great potential to become the fifth disruptive computing paradigm after mainframes, PCs, the Internet, and mobile/social networking [2]. According to M. Swan [2], blockchain has potential as a worldwide, decentralized record for the registration, inventory and transfer of all assets-not just finances, but property and intangible assets such as votes, software, health data and ideas.
Problem
Machines distributed on the internet have their own version of reality, i.e., their own database. API's are used to communicate and synchronize their data. In conventional centralized systems, a central authority (e.g., a central bank) validates every single transaction, which turns out to be expensive and time-consuming. This centralized architecture presents many drawbacks. A central authority is a single point of failure or attack.
Blockchain is basically a solution to these problems. It allows executing digital transactions in a decentralized fashion without a trusted intermediary. Blockchain is a merge of databases and networks where every machine shares the same data. It implements a decentralized consensus mechanism to construct a single truth.
We can define blockchain as a decentralized database that stores a registry of assets and transactions across a peer-to-peer network.
Key Characteristics of blockchain
In summary, according to Zhen et al., blockchain technology has the following key characteristics [3]:
- Decentralization: A transaction in the blockchain network can be conducted between any two peers without the intervention of any central entity. Thus, a blockchain network can reduce the operation cost of a central entity.
- Persistency: Every node has a valid copy of the ledger. Nodes cannot delete or rollback transactions once they are part of the blockchain.
- Immutability: Given the properties of the hash functions, it is not possible to alter a single bit within a block without changing the hash value of its header.
- Anonymity: Users can preserve some level of anonymity by using their generated address (through the public key).
- Auditability: Every transaction is validated and recorded in the blockchain. Each of them includes a timestamp and information of previous records. This mechanism improves the traceability and the transparency of the data stored in the blockchain.
What do you think about this new technology?
References
[1] K. Christidis and M. Devetsikiotis. Blockchains and smart contracts for the internet of things. IEEE Access, 4:2292{2303, 2016.
[2] M. Swan. Blockchain: Blueprint for a New Economy. O'Reilly Media, 2015.
[3] Z. Zheng, S. Xie, H.-N. Dai, and H. Wang. Blockchain challenges and opportunities: A survey. Journal, 2016.