The Innovation of Blockchain
Know about Blockchain and how far it has been developed.
Every smart person that I admire in the world, and those I semi-fear, is focused on this concept of crypto for a reason. They understand that this is the driving force of the fourth industrial revolution: steam engine, electricity, then the microchip — blockchain and crypto is the fourth.
We all came to Know about Blockchain since the launch of the cryptocurrency named Bitcoin. But before that we never came across a term like that. the only terms we came to know was encryption and decryption, hashing,network security protocols.
So how did this term Blockchain become so popular suddenly even though it was released a long time ago. people get to see the application only when there is a need for a problem that is to be solved, and how the name Blockchain got popular.
Still many are not familiar about the Blockchain due to fake news or scams. So what is Blockchain???
A blockchain, originally block chain, is a growing list of records, called blocks, that are linked using cryptography. Each block contains a cryptographic has of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree).
By design, a blockchain is resistant to modification of its data. This is because once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks. For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Although blockchain records are not unalterable, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance. The blockchain has been described as “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.
The blockchain was invented by a person (or group of people) using the name Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin. The identity of Satoshi Nakamoto remains unknown to date. The invention of the blockchain for bitcoin made it the first digital currency to solve the double-spending problem without the need of a trusted authority or central server. The bitcoin design has inspired other applications, and blockchains that are readable by the public are widely used by cryptocurrencies. The blockchain is considered a type of payment rail. Private blockchains have been proposed for business use. Computerworld called the marketing of such blockchains without a proper security model “snake oil”.
Lets take a quick peak into a video to get a better understanding about what is blockchain.
So The blockchain is all about bringing in transparency and efficiency into the existing systems which are running the upstream and downstream supply chains and making them more proactive and predictive.
The concept of Blockchain was first initiated and practically worked out by Satoshi Nakamoto a group of persons who created the first cryptocurrency coins named Bitcoin. later other types of cryptocurrencies were formed.
Lets see how the Blockchain works.
When a block stores new data it is added to the blockchain. Blockchain, as its name suggests, consists of multiple blocks strung together. In order for a block to be added to the blockchain, however, four things must happen:
- A transaction must occur. Let’s continue with the example of your impulsive Amazon purchase. After hastily clicking through multiple checkout prompt, you go against your better judgment and make a purchase. As we discussed above, in many cases a block will group together potentially thousands of transactions, so your Amazon purchase will be packaged in the block along with other users’ transaction information as well.
- That transaction must be verified. After making that purchase, your transaction must be verified. With other public records of information, like the Securities Exchange Commission, Wikipedia, or your local library, there’s someone in charge of vetting new data entries. With blockchain, however, that job is left up to a network of computers. When you make your purchase from Amazon, that network of computers rushes to check that your transaction happened in the way you said it did. That is, they confirm the details of the purchase, including the transaction’s time, dollar amount, and participants.
- That transaction must be stored in a block. After your transaction has been verified as accurate, it gets the green light. The transaction’s dollar amount, your digital signature, and Amazon’s digital signature are all stored in a block. There, the transaction will likely join hundreds, or thousands, of others like it.
- That block must be given a hash. Not unlike an angel earning its wings, once all of a block’s transactions have been verified, it must be given a unique, identifying code called a hash. The block is also given the hash of the most recent block added to the blockchain. Once hashed, the block can be added to the blockchain.
So now we know how Blockchain works, let see how it is been innovative.
As mentioned before at first when blockchain was first introduced in Bitcoin it was not established with its full capabilities,then later with several other Crypto coins were invented in an innovative manner.
For example let us consider the Ethereum Blockchain,in this Blockchain Ether coins are used as Cryptocoins. At first the one major thing that separates them from Bitcoins is the ability to utilise the Smart contract.Recently Ethereum have launched a lot of utilities such as Defi application and NFT(Non fungibile token).Though Bitcoin do have the capability of using smart contract but its not capable as much as the Ether coins.
So what is a Smart contract ???
A Smart contract is a computer program or a transaction protocol which is intended to automatically execute, control or document legally relevant events and actions according to the terms of a contract or an agreement. The objectives of smart contracts are the reduction of need in trusted intermediators, arbitrations and enforcement costs, fraud losses, as well as the reduction of malicious and accidental exceptions.
In simple terms smart contract is a computer program thats allows us to manage the Blockchain without a person who needs to be assigned to continuously monitor the chain exchange between one user to another one. Smart Contracts can be customised based on our needs.
But since smart contracts can be created an performed at ease (with some programming knowledge), there is a possibility of creating a deadlock in Smart contract during the execution.
So to resolve this there comes a term called Gas. Gas is nothing but the service charge used to execute the smart contract in a blockchain. this concept of Gas was also brought up in Ethereum Blockchain. The gas is to be paid it should be from coins.
If a person wants to send some contract to another person it needs to be authenticated such that it won’t get missed. so there comes another innovation idea of blockchain called as Token.
Crypto tokens, which are also called crypto assets, are special kinds of virtual currency tokens that reside on their own blockchains and represent an asset or utility. Most often, they are used to fundraise for crowd sales, but they can also be used as a substitute for other things. So far there are two types of token ERC10 and ERC 20. ERC 10 is standard token where we can create token within the particular Blockchain which is by their rules, the another one is ERC 20 which enables us to create custom contracts can be implemented in the required platform.Currently ERC 20 can be used in Ethereum and Tron Blockchains.
So it can be used as an asset and also as authentication.
Like this, the Blockchain has been innovated into different types to get to know its full potential.
if we see the Tron Cryptocurrency the gas charge is low compared to Ethereum coin.
the recent innovation in Blockchain is the ability to use Cryptocurrency in our Mobile Phones. Pi Coin has brought the ability to use Cryptocurrency mining in Mobile phone which was not possible in previous Blockchain.
Still we have more to bring innovation to the blockchain but this is the start cause all we have seen is in terms of cryptocurrency, but Blockchain can be applied in hospitals traffic signal management and many more which makes to bring new ideas in Blockchain.
Imagine Blockchain being implemented in Voting for elections to chose the electoral candidate as a leader, there are many possibilities of getting illegal votes during election, if Blockchain is being implemented for Voting machine (EVM with Blockchain), each time a person tries to vote, his identity will be recorded in a block and if any other person tries to vote illegally using the same person name , then another block will be created in the name of that person which helps the officers to keep a track on how many times the person is trying to vote, in such case those kinds of vote can be found and easily be removed thus ensuring a safe voting for the election. Still this idea is yet to come as innovation as Blockchain is still evolving to its full potential.
Lets take a look on how NFT’s work..
What is NFT?
NFTs are tokens that we can use to represent ownership of unique items. They let us tokenise things like art, collectibles, even real estate. They can only have one official owner at a time and they’re secured by the Ethereum blockchain — no one can modify the record of ownership or copy/paste a new NFT into existence.
NFT stands for non-fungible token. Non-fungible is an economic term that you could use to describe things like your furniture, a song file, or your computer. These things are not interchangeable for other items because they have unique properties.
The difference between Fungible and non-fungible are fungible tokens are mutable which means their value keeps varying whereas for non-fungible token the value is immutable which means the values of the token is fixed once updated.
NFT is mainly deployed and being popular under the Ethereum blockchain. Lets see how NFT works.
NFTs are different from ERC-20 tokens, such as DAI or LINK, in that each individual token is completely unique and is not divisible. NFTs give the ability to assign or claim ownership of any unique piece of digital data, trackable by using Ethereum’s blockchain as a public ledger. An NFT is minted from digital objects as a representation of digital or non-digital assets. For example, an NFT could represent:
Real World Items:
- Deeds to a car
- Tickets to a real world event
- Tokenized invoices
- Legal documents
An NFT can only have one owner at a time. Ownership is managed through the uniqueID and metadata that no other token can replicate. NFTs are minted through smart contracts that assign ownership and manage the transferability of the NFT’s. When someone creates or mints an NFT, they execute code stored in smart contracts that conform to different standards, such as ERC-721. This information is added to the blockchain where the NFT is being managed. The minting process, from a high level, has the following steps that it goes through:
- Creating a new block
- Validating information
- Recording information into the blockchain
NFT’s have some special properties:
- Each token minted has a unique identifier that is directly linked to one Ethereum address.
- They’re not directly interchangeable with other tokens 1:1. For example 1 ETH is exactly the same as another ETH. This isn’t the case with NFTs.
- Each token has an owner and this information is easily verifiable.
- They live on Ethereum and can be bought and sold on any Ethereum-based NFT market.
I hope this article help you to understand how the innovation of Blockchain has evolved and what all applications it can be utilised in order to ensure security and ease of use.
Thank you for reading this article and i’ll see you in the next one.
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