Cryptocurrency is a type of digital asset which is used to exchange value between parties. It uses strong cryptography to secure financial transactions and control the creation of new units of that currency and verify the transfer of assets. Cryptocurrency does not exist physically.

We know that the government prints the government currencies like fiat currency such as Dollar, Yen or Yuan itself. It means there is a centralized institution exists which can create thousands or millions or billions more of that currency. Unlike government currencies like bitcoin, these type of currencies is created by the same mathematical formulas that make the cryptocurrency work. Thus, cryptocurrencies use decentralized control, which works through distributed ledger technology that serves as a public financial transaction database.

Today, many different types of cryptocurrencies are available. Some of them are given below.

Bitcoin

Bitcoin is generally known as the first decentralized cryptocurrencies. It is created by the network of thousands of specific nodes called miners. The miners can process the bitcoin transactions in the blockchain network. Since the release of bitcoin, more than 4000 alternative variants of bitcoin are available now.

Litecoin

Litecoin cryptocurrency worked very similar to Bitcoin. We know that bitcoin wait ten minutes for a transaction block to be processed, but Litecoin can do this in maximum two and a half minutes. Litecoin doesn’t have a big market cap. The price of Litecoin is lower than Bitcoin, but it’s a very effective process and also has some variations from Bitcoin.

Z-Cash

Z-Cash is a privacy-protecting digital currency which is built-on strong science in cryptography. It provides enhanced privacy for its users as compared to other cryptocurrencies such as bitcoin. Here, transaction data is kept confidential, which is made possible through zero-knowledge proofs. It allows transactions to be verified without any information about the sender, receiver, and the amount transacted.

Z-Cash features known as viewing keys and payment disclosure makes it possible to disclose some of the user’s transaction data. It makes the transactions on Z-Cash auditable and regulation-compliant.

Monero

Monero is an open-source cryptocurrency which focuses on untraceable, privacy and decentralization. It is fast, private, and secure digital cash, which is operated by a network of users. We can use it to buy and sell things and can exchange for other coins or tokens.

It uses a special kind of cryptography which ensures that the transactions remain 100% untraceable. It focuses on anonymity, which is harder to track, whereas Bitcoin is pseudonymous, which transactions are still traceable.

Dash

Dash is a short form of Digital Cash. It is an open-source cryptocurrency and is a form of a decentralized autonomous organization which is run by a subset of users, called master nodes. It is one of the most promising alternative coins to bitcoin. It permits very fast transactions, which are untraceable.

A blockchain explorer is an online webpage similar to Mozilla and Google Chrome, which allows users to browse and explore information about blockchain technology. All bitcoin and ether users depend on blockchain explorer to manage their records and transactions. It allows users to explore the entire blockchain platform that clients are using. Blockchain explorers are exclusive in nature. Each blockchain explorer is associated with a specific blockchain i.e.; a Bitcoin explorer cannot be used to extract information about litecoin transactions or blocks.

The functionality of Blockchain Explorer

The behavior of each blockchain explorer with its respective blockchain interface is explained below:

• Block Logs– Explorer permits its user to scrutinize blocks, which are freshly mined in its associated blockchain. Each explorer produces the current feed of all the blocks that have been added most recently.
• Transaction Logs– Explorer authorizes its users to traverse any transaction of any block, which has already been mined and is still a part of the blockchain.
• Transaction history for any given address– This feature helps the users to explore all the records associated with a given public address, which may include a number of transactions, its balance, etc.
• Address information and modification– The blockchain explorer allows its users to see the receiving address in a transaction. It also allows them to make necessary changes in their existing public address.
• Best transaction for a given day– Some explorers keep a record of the largest transaction made in a day to distinguish it from the other. An example is blockchain.info.
• State of Mempool– Explorer enables its users to check the current status of the mempool, which encompasses the number of unregistered transactions and information related to it.
• Double spending occurrences– The record of all the double-spend transactions in the last ten minutes are recorded in some explorers.
• Genesis Block – Explorer displays the genesis block of that blockchain. For example, one can see Bitcoin’s genesis block here, which was mined in 2009 by Satoshi Nakamoto.
• Foundling Blocks- User can check the blocks, which were lost or orphaned and not attached to the blockchain.
• Relay chain- Explorer enables the user to know that the block was found by a particular mining pool.

Traversing a Public Blockchain Address

The most commonly found explorers are the bitcoin explorers. To explain the process of traversing a public address, we will use https://explorer.bitcoin.com/btc  . It is one of the top results when searched for explorers.

For example, let’s take the given public bitcoin address-1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX

Step 1- Go to https://explorer.bitcoin.com/btc, and search for 1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX in the search tab.

Step 2- Check the details, such as total balance and BTC received or sent on this public address, as shown in the image.

Step 3- Exploring the transactions for this address, you will find transaction:

The ID of each transaction along with the input and output sections, amount in terms of BTC, fees charged, confirmations for this transaction, and size of the transactions.

You can also find equivalent BTH details of the same address through this explorer. The example of it is shown below:

Explorers are irreplaceable asset and one of the best methods to analyze a blockchain. The presence of such open-source explorers like https://explorer.bitcoin.com/btc,  provides transparency and immutability to the cryptocurrencies and other blockchain-based business solutions. Permitting users to access the blockchain ledger promotes a decentralized system to function peacefully.

In this article, the obstacles faced in efficiently implementing the blockchain technology are discussed in detail.

• Immutable

 Immutable means something which cannot be changed or improvised. The records of the blockchain cannot be modified once created and broadcasted on the chain network. It protects the integrity of data making it tamper-proof, but at the same time, it has its drawbacks. No corrections or revision can be done in order to reverse the errors made while entering the data. Once the data is on record, it is imperishable.

• Organization and Size

Every transaction needs to be validated or verified by every block over the network in order to reach a mutual consensus. A blockchain network may be vast in size, depending upon its growth and dispersion. The number of nodes and blocks determines the network size. The bigger the network size, the more time is consumed in the process of reaching consensus in an authentic manner. This leads to considerable consumption of time and resources.

• Scalability

The consensus mechanism requires every participating node to validate the transactions. This restricts the number of transactions that can be carried out over the blockchain network during a given time. As a result, an existing blockchain, Bitcoin can only process seven transactions a second.

• Plethora Proof of Work

Proof of work is an overload. The fact still holds true even if disregarding the energy consumption in terms of electricity and processor time. The dependability on a single linear chain even by Proof of Stake and other solutions is a soft underbelly or flaw. Options are being explored to avoid this discrepancy.

• Excessive Energy Consumption

The energy consumed by miners and giant mining sites in terms of electricity does not diminish with the outcome, which is the creation of a new block. According to statistical reports, Bitcoin’s energy usage is alone equivalent to Switzerland’s annual energy usage.

The most doubtful angle is that even after reducing the number of miners and energy consumption corresponding to it by ten folds, the Bitcoin would remain as efficient and stable as it is now. It would work at the same speed, processing the same number of transactions and produce an equal amount of blocks at the same interval of time.

• Lack of Technical Awareness

The developers these days are mostly trained in technologies like Java, C++, or Python. The lack of technical expertise in blockchain restricts its development and management. Even if it is developed, the users of the blockchain are unaware or incompetent to use its implementation. Thus, awareness about blockchain’s development, implementation, and usage must be spread.

• Regulation and Management

One might assume that if the blockchain is recorded at every node, then a single person or participant cannot shut down a blockchain. The absence of any central authority would make the closing down of any blockchain impossible.

This is probably a misconception. For instance, in Bitcoin, miners tend to operate in competing pools. This is done in order to ensure that they earn a reward for their work in which they have invested through electricity consumption and processor time. The main aim here is to avoid concentration.  The indestructibility of a blockchain is proportional to its dispersion. For instance, if more than 63% of miners of blockchain are from the same country, then the jurisdiction of that country can hamper indestructibility by halting communication services or seizing server sites.

Cryptography is a method for developing codes that prevent third parties from viewing private data. It helps in protecting data and information by using codes, such that it can only be interpreted by the intended receiver. Information can be encoded to make it difficult to steal the data. Clients want to be sure that their data and transactions are secure in the best possible way, though some organizations across the globe follow their own standard of security.

Cryptography is an essential component of Blockchain technology. Blockchain mainly uses asymmetric cryptography, also known as public-key cryptography. Blockchain uses cryptography in different ways, like- for wallets, security, and transactions. The role of cryptography is essential in Blockchain in terms of maintaining the trust and eliminating intermediates.

Public Key Cryptography

Public key cryptography uses the keys in pair, a public and private key. The public key is for encryption that can be distributed commonly, but the private key is not meant to share with anyone. Public key cryptography is mostly used between two users or two servers in a secure way. Blockchain technology mainly uses asymmetric cryptography for user authentication and data validation through digital signature.

There are many terms used in cryptography, and few are defined below:

1. Encryption: Encryption is the method of converting data into a set of random numbers and alphabets, which makes it meaningless but not for the intended recipient. It is the process of encoding plaintext to ciphertext. In the process of encryption, the data and information are referred to as plaintext, whereas the converted data referred to as ciphertext.

• Decryption: Decryption can be defined as the process of converting back the encrypted data into real data. It is the reverse process of encryption. An intended recipient can only decrypt the data by using the private key. If the key is not available, programmed software may be needed to decrypt the code using algorithms to make the data readable.

• Cipher: Cipher is an Algorithm that takes some data and produces a fixed-length output called ciphertext. A ciphertext is an encrypted form of the plaintext. It comprises a well-defined set of operations for encryption and decryption.
• Keys: Cryptography requires a key for encryption and decryption that allows changing the plaintext into ciphertext. The keys help to lock and unlock the data whenever needed; hence a key is not only a password.
• Digital signature: Digital signature is a mathematical strategy used to generate digital codes, which are used to establish the legitimacy of digital messages & documents. These codes are produced and substantiated by public-key encryption. The content and the sender’s specification are verified by attaching the signature to the electronically disseminated document.
• Payload: Payload is the information or the actual data in the message, which needs to be transmitted safely between the two parties, namely the sender and receiver. The operations are performed on the payload.
• Cryptographic Hashing: Cryptography hashing is an essential part of blockchain technology, which makes the Blockchain an immutable database. It is really important when someone needs to verify the authenticity of data or transactions. A hash function is created by a mathematical technique that takes an input any digital entity and produces an output of a 32-characters size fixed string, which is a combination of letters and numbers.

The SHA (Secure Hash Algorithm) is one of the most popular cryptographic hash functions (CHF). It is available in various forms like SHA1, SHA256, SHA512, etc. A cryptographic hash is used to make a signature for a text or a data file. We can convert data using various hashing algorithms

• MD5- Message digest algorithm is used to generate a 128-bit hash value.
• SHA1– It is an upgraded version of SHA designed by NIST and was published as per the Federal Information Processing Standard (FIPS).
• SHA256- Hash value is computed with 32-bit words, and the message digest is 256 bits.
• SHA512- Hash value is computed with 64-bit words, and the message digest is 512-bits.

Every such algorithm takes some data and produces a fixed-length output called as a cipher. 

Cryptography Example using Python

import hashlib
data=input("Enter data to encrypt ") a=hashlib.md5(data.encode()).hexdigest() b=hashlib.sha1(data.encode()).hexdigest() c=hashlib.sha256(data.encode()).hexdigest() d=hashlib.sha512(data.encode()).hexdigest() print(a,len(a))
print(b,len(b))
print(c,len(c))
print(d,len(d))

Output:

Enter data to encrypt   1234
81dc9bdb52d04dc20036dbd8313ed055   length 32
7110eda4d09e062aa5e4a390b0a572ac0d2c0220   length 40
03ac674216f3e15c761ee1a5e255f067953623c8b388b4459e13f978d7c846f4   length 64 d404559f602eab6fd602ac7680dacbfaadd13630335e951f097af3900e9de176b6db28512f2e
000b9d04fba5133e8b1c6e8df59db3a8ab9d60be4b97cc9e81db   length 128
 

Cryptography Example using Java:

import java.security.MessageDigest;
import java.util.Scanner;
public class HashingTest {
private static String bytesToHex(byte[] hash) { StringBuffer hexString = new StringBuffer();
for (int i = 0; i < hash.length; i++) {
String hex = Integer.toHexString(0xff & hash[i]);
if(hex.length() == 1) hexString.append('0');
hexString.append(hex);
}
return hexString.toString();
}
public static void main(String[] args) throws Exception {
Scanner sc=new Scanner(System.in); System.out.println("Enter the String to encrypt : "); String s=sc.nextLine();
MessageDigest digest = MessageDigest.getInstance("SHA-256");
byte[] sha256digest = digest.digest(s.getBytes()); String sha256cipher=bytesToHex(sha256digest);
System.out.println("SHA-256 cipher is "+sha256cipher);
}  
}

Cryptography Example using NodeJS

const SHA256=require('crypto-js/sha256');
function hashing(s)
{
return SHA256(s).toString();
}
console.log(hashing("xyz"))

Blockchain is explored by a wide range of audiences daily. There are lots of terms used for the Blockchain technology; one of them is Distributed Ledger Technology (DLT). Blockchain and DLT are often used interchangeably but they are not same. Blockchain and DTL share the same objective of the decentralized database.

Blockchain is comparable to a distributed ledger, whereas distributed ledger cannot be seen as Blockchain. We can better understand the differences between both the terms using below descriptions:

What is Distributed ledger technology?

Distributed ledger technology (DLT) is an online system that records the transactions and their details on multiple nodes at the same time. It can be described as an online software technology that collects information as a record of the ledger. The circulation of the transaction to other nodes occurs automatically on a peer-to-peer server on a regular basis. DLT information and records can be shared either publicly or on a private basis among the participants. It sounds like Blockchain, but these two terms are not the same.

The implementer controls the whole implementation process in DLT. DLT was the main reason behind the first step towards a decentralized blockchain, but it would not necessarily form a chain of blocks.

What is Blockchain?

On the other hand, there is blockchain technology, which is a form of a distributed ledger with a particular technological backend. As we all know, it forms an immutable ledger of records comprising transactions that are controlled by a decentralized server. In blockchain, records are permitted by participant nodes consensus. With blockchain technology, anyone can store entries into a record of a transaction, and a group of users and individual can control how the record of information and transaction is edited and updated.

Though blockchains are possibly more significant than distributed ledgers, still DLT can be useful for the global economy’s technological store, especially in cases where it would be unwise to hitch a genuinely decentralized blockchain.

One of the main differences between both the technologies is Blockchain is permissionless, whereas DTL is permissioned. In the case of Blockchain, anyone can participate in the network, but in DTL, only selected participants can access to the network. This decides the size and type of the server as in permissioned type blockchain, the number of participant nodes is smaller.

Blockchain VS DLT

Merkle Trees are foundation components of the blockchain mechanism. The methodical, systematic, and reliable verification of content in unbounded and dispersed data sets is enabled with the use of Merkle Trees. Blockchain implementations such as Bitcoin and Ethereum use Merkle Trees as essentials. Merkle Trees help in validating the stability and essence of data. It provides a hashed structure, which not only protects data cryptographically but also maintains its integrity.

History of Merkle Trees

The concept of Merkle Trees came into existence in the year 1979. A student at Standford University named Ralph Merkle wrote a paper labeled “A Certified Digital Signature,” which proved to be a major breakthrough to initiate the development of blockchain. The paper discussed new methodologies for creating proofs. The process of verifying data much faster than existing methods made Merkle’s paper a success. The pattern of encrypting computer protocol functions radically changed after the introduction of Merkle Trees. Since then, the popularity and use of Merkle Trees have grown tremendously.   

Working of Merkle Trees

Each block in a blockchain network has thousands of transactions stored in it, along with a transaction ID for its authentication. Thus, a considerable amount of the space and time is required to manage and process these transactions. Employing the least amount of data in verifying and processing these transactions is preferable. This is what exactly Merkle Trees do.

• Merkle Tree collects every transaction in a block and creates a digital fingerprint of the complete set of operations. This fingerprint is a 64 character code labeled as Merkle Root.  It permits a user to substantiate the inclusion of a transaction in a block.
• The process of the generation of Merkle Roots takes place in pairs. For 600 transaction IDs, grouping into 300 pairs will be done.
•  Repetitive hashing of each pair of nodes is done until there is only one hash left, called the Root Hash (or the Merkle Root). Bottom up approach is followed for the construction of Root, starting from hashing singular transaction IDs.
• There are two kinds of nodes in a Merkle Tree-
• Leaf node– Contains hash of Transactional data
• Non-Leaf node– Contains hash or previous hashes
• The Merkle Tree is binary in nature and thus requires an even number of leaf nodes. In the case of an odd number of nodes, the hash of the last node is copied, and one extra node is created for uniformity.

Example of Merkle Tree

1. In the example given below, there are four transactions, labeled P, Q, R, and S. Each Transaction has an associated transaction ID, which is hashed, and each hash is stored in an individual leaf node.

• The nodes are grouped successively in pairs and then hashed, the hash is stored in the parent node. For the given example, the nodes containing hash (P) and hash (Q) are paired, and the combined hash value i.e., hash (PQ), is stored in the parent node. Similarly, hash (RS) is stored in the other parent node. The same process is repeated for all pairs of successive nodes.
• For the final step, the parent nodes are summarized, the nodes containing hash (PQ) and hash (RS) are combined and hashed. This hashed value, hash (PQRS), is stored in the Merkle Root.

Advantages of Using Merkle Tree

• It provides integrity and authentication at the most fundamental level.
• It consumes comparatively very limited data storage for the process of proofing.
• Little information needs to be transmitted over the unbounded network to carry out the process of substantiation and management.
• Merkle Trees help advocate that later versions of a log include everything from an earlier version.

Applications of Merkle Trees

1. Merkle Trees are used by Certification Authorities as a means of certificate transparency. Both public and private key pairs are considered as Merkle Tree leaves. This strategy is opted to avoid rejection if any one of the CA might turn out to be a defaulter and certify a domain without bringing it to the knowledge of the domain’s owner.

• The Root of the Merkle Tree is treated like a public key, and the discrete nodes are used as one-time signatures. The advanced and revised updates of this are robust against quantum attacks.
• Simplified Payment Verification (SPV) is a technique of authentication, which is used when a specific transaction is included in a block without completely downloading it. Merkle trees are used thoroughly by SPV nodes.
• These are used as building blocks of data structure by Ethereum and Bitcoin.

In this Topic, we are going to learn about Applications of Blockchain. The blockchain is a technology that enables moving digital currencies from one side to another side. Some people refer bitcoins to blockchain but that facts are incorrect. The blockchain is a technology it’s completely different from Bitcoin. Some important ­­facts related to blockchain are given below:

• It was firstly introduced by Santoshi Nakamoto in 2008.
• It works on cryptography and uses peer to peer network.
• Blockchain basically built by using 3 technologies which are Private Key Cryptography, Peer to Peer Network, Program(the blockchain’s protocol)
• The main uses of Blockchain is in Cryptocurrencies.
• The database of blockchain is managed by peer to peer network and by a distributed timestamping server.
• It can be described as a value-exchange protocol.
• There are basically three types of Blockchain:
  Public blockchains, Private blockchains, Consortium blockchain.

Applications of Blockchain In Real World:

Top 10 Applications Of Blockchain are as follows:

Bitcoin:

The major application of blockchain is in Cryptocurrencies like Bitcoin. Bitcoin is decentralized digital currency introduced by Santoshi Nakamoto.

 Banking:

Nowadays blockchain is also replacing the existing or we can say overtaking the current Banking system. By the help of blockchain, we can transfer the fund from one to another person in a second because the validation of the transaction will take place by uses of Blockchain and cryptography. It’s a possibility that blockchain is going to cut down of 19.8 Billion Dollar which is going for middleman cost/year. Because of the blockchain, the hacking of account will become impossible. applications of Blockchain also solves the problem of double spending.

Payment and Transfers:

Because of Blockchain, only the wallet system has grown up so rapidly and by using that we can make the payment and money transfer very quickly and we don’t need to enter the public key we just need to scan a unique QR code and make the payment in few seconds. The payment which is done by blockchain will be highly secure with no transfer fees. For blockchain transfer no bank account needed.

Healthcare:

Healthcare is also a domain where the uses of Blockchain technology has been used for storing the details of the patients. This technology ensures that anyone who has access to this particular blockchain can have access of patients data. This database will be highly secure and for checking the data related with the patient-doctor has to log in there with public key and details and he can check the data of the patients.

Law Enforcement:

The law Enforcements agency is also now applying applications of Blockchain technology. So that they can create a Common Database of the criminal and the crimes commits by them and with all the biometric details. Since its highly secure nobody can do the changes in it without proper access. Popular Course in this categoryCyber Security Training (12 Courses, 3 Projects)12 Online Courses | 3 Hands-on Projects | 77+ Hours | Verifiable Certificate of Completion | Lifetime Access
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Voting:

Blockchain can be possibly used in the next election or in Voting because of its revolutionary unchanging nature. Voting will become more secure and fail proof by the help of Blockchain.

IoT(Internet of Things):

The blockchain is also now used by IoT. This ensures that data which is going to transfer over or between the devices will be secure and encrypted without any interference.

Online music:

Online music is one field which is growing rapidly with the help of Blockchain technology. Companies are putting their music in blockchain where everyone can access the music but none can change it and a customer can pay of a particular song and then he can download it from the blockchain itself.

Real estate:

Real estate is also a domain which is affected by the applications of blockchain and in the future people are going to sell and buy the property over blockchain.

Digital IDs:

The blockchain is also now used by different companies for the Digital Id. These digital ID’s will be managed by the private keys of the owner and will also help to avoid excess personal information over the internet.

Blockchain is undoubtedly a smart invention. It comes with trust, decentralized network, and transparency, let’s discuss some beneficial traits of Blockchain, which escalate its need for implementation in the coming future-

• Provides History of Activities

Blockchain maintains a record of all previous transactions and changes, which have been made from the beginning of its creation, along with the most recently updated status of data. In other words, Blockchain not only stores a snapshot of the most recent updates but also stores the history of all operations on data for reference.

• No Achilles Heel

The decentralized nature of the blockchain network makes it robust against any sort of attack. There exist no central vulnerable site to target and bring down the whole network. The distributed and dispersed nature of control amongst the nodes makes it very secure to use.

• No  Need of Central Administrator

Each node in a blockchain network holds the most recently updated replica of records. Since every node holds the power to control the network equally, there is no need to have any central authority to look over and administrate work. This saves the cost of infrastructure required to its set up.

Why do we need blockchain?

1. To record secure transactions between numerous partners

When it comes to record simple transactions between two parties, then the conventional database system can be efficiently used. However, for more complex transactions involving multiple mistrusting partners who want to interact and make changes in the data, Blockchain must be used. It yields satisfactory results to overcome tailback and congestion problems to simplify connections.

• To eliminate the role of a middleman

For instance, many sections of hospitality such as flight and accommodation providers have to deal with their guests through a centralized application or website playing the role of a middleman such as Trivago, Makemytrip, and Expedia, etc. As believed by many travel companies, the implementation of Blockchain would help to cut the role of middleman and help to establish direct interactions and deals with customers and tourists.

• To manage and assure the safety of digital relationships 

Taking another example, for securing records of property or land rights and any other such assets, one needs a transparent and durable system in order to ensure this data.

Smart contracts are on such application of Blockchain, which expedite such digital connections/ transactions. Automated payments of requirement fulfillment and digital history of all records are some critical features of any smart contract.

• A tradeoff between transparency and privacy

A completely transparent system would commonly provide no privacy and make information available to anyone and everyone, making it susceptible to attacks. Similarly, a fully private system would provide no transparency. However, Blockchain is one such technology which provides a midway to balance both pellucidity and privacy. It does so by making all the transactions available for verification by the nodes in the network and, at the same time, using techniques to encrypt the block in chronological relation cryptographically.

• To maintain data integrity.

It is very important to secure the data from any unauthorized modifications. On a digital platform with extensive participation of nodes, in a distributed manner, the data is vulnerable to threats of being tempered or corrupted during transmission. Blockchain provides the feature of public verifiability to each of its nodes. Any harm to the integrity of the data can be reported via any node part of the network. This helps to maintain the integrity of data over a dispersed blockchain network.

• Autonomous system

Unlike customary organizations or companies, blockchain has no central body of governance or management. One such example is the Decentralized Autonomous Organization (DAO), which is defined by a set of rules mentioned in a smart contract that establishes the degree of its usage and evolution. DAO may have many investors who vote upon how to invest the funds of DAO. Since the investors have a feeling of mistrust amongst them, DAO is best implemented using permissionless Blockchain.

A Blockchain is simply a collection of records of time-stamped transactions that are managed by a group of servers. There is no central authority who controls the database. It can be updated by consensus between participants in the network, and a new transaction is recorded that can never be erased or tampered. But the big question is that how does a Blockchain work?

Let’s discuss the entire working process by dividing it into several individual steps.

Firstly, when the sender party makes a call to transfer some money following steps occur:

Step 1: Let’s suppose two users in a Blockchain network, Alex and Brown, want to create a new transaction. Alex sends 50 BTC to Brown. They will request for the transaction to be mined.

Step 2: The transaction can take place if all the other participants in the network verify it as a genuine transaction. Thus, each user will receive the request to verify the transaction between Alex and Brown.

Step 3: The data of the transaction requires a hash value now to process the transaction. The hash function takes any data of input and converts it into a unique 64-bit string of output. Each client will check certain information about the transaction, such as does Alex have sufficient funds to make the transaction.

Step 4: Then, the transaction is forwarded to the participating nodes of the network. Once the verification is done, the transaction is ready to take place. Now, the transaction is added into the memory pool of Blockchain.

Step 5: Every block has a defined memory pool; hence several other verified transactions combine together to create a new block of the ledger. There can be a number of transactions in the block.

Step 6: The created block is then added to the existing Blockchain. Each new block will have a block header consisting of time-stamp, hash, previous hash, and transaction data summary. Every block has its unique hash value, which acts like its signature, or you can say fingerprint.

Step 7: The block is mined with the help of the hash function. After this, the transaction is completed, and money is sent to the second individual.

The above process repeats itself, and new blocks continue to get added into the Blockchain permanently after every 10 minutes. There is a unique concept of incentive and reward upon doing proof-of-work. The practical working of Blockchain will ask you to add $50 for each into the required software. The software will keep the money safe with itself and will check the winner. The system will reward this whole $100 to the winner.

Blockchain can be defined as a continuously growing chain of blocks, which is a decentralized, distributed, and immutable database that records the derivations of digital assets. Every user of the network can reach consensus without trusting each other.

It is the world’s most trusted compact cryptocurrency company. It connects the world with future products, including digital and crypto wallet, bitcoin explorer, and market information.

Types of Blockchain

Blockchain technology is undoubtedly a great invention. Let’s take a quick look at the different kinds of Blockchain available and their functionality.

Blockchains comprises three different types that are as follows:

1. Public Blockchains

In public blockchains, any user can join the network, read and write, or send and receive data using the required software. It is a decentralized network that doesn’t have a single entity to control the flow as public blockchains are permissionless. Every transaction that takes place on public blockchains is completely transparent, which means anyone can access the transaction details. Example– Bitcoin, Dash, Ethereum, Litecoin, etc.

Below are some features of the public blockchain:

• These are designed to be fully decentralized, with no individual controlling the flow of the transaction.
• Public blockchains are open to anyone; regardless of nationality or location, which makes it harder for authorities to filter the users.
• Each participant has a token associated with them that is designed to provide them some incentive and reward in the network.

2. Private blockchains

In private blockchains, only authorized users are allowed to access the chain. It is also known as permissioned blockchain as it restricts the unauthorized users to participate in the network. There can be more than one person or organization that controls the system and this allows the need of third parties for transactions. In simple words, access permissions for reading and writing are kept centralized to an individual organization. Example– Hyperledger, R3 Corda, EWF (energy), etc.

Below are some features of the private blockchain:

• Users always need permission to participate in the network.
• A private blockchain is more centralized and secure than public blockchains.
• Transactions in private blockchain are available only for the allowed participants of the network.

3. Consortium Blockchains

Consortium blockchains are permissioned networks that allow certain entities or group of users to read and write data with certain restrictions. It can be best explained when compared to their counterpart, public blockchains. Though it is semi-decentralized, consortium blockchain is controlled by a group of approved individuals rather than a single entity. Example– Quorum, hyperledger, etc.

Below are some features of the blockchain:

• Consortium blockchain provides more efficiency by collaborating some aspects of their business.
• Anyone can be included in the network by its participants from the supply chain, to the central bank, and to the governments.
• It offers different use cases of blockchain, bringing together many businesses and organizations around the globe that work together and also compete against each other.

It can be differentiated based on permission less blockchains like Bitcoin and permissioned ones like DLT. In Bitcoin-based Blockchains, no one needs to trust any third-party entity to run it transparently. The main difference between the different types of blockchains is the range of availability.