Blockchain, a decentralized world

Blockchain, a decentralized world

Blockchain technology has recently attracted widespread attention due to its advantages, e.g., decentralization, transparency, traceability, and immutability; there is an exponential increase in the usage of various applications such as smart farming, innovative healthcare, supply chain, logistics, business, tourism, and hospitality, energy management, etc. Bank and Payment systems have begun employing Blockchain to make their processes softer,?and safe. For example, banks can efficiently transfer funds with decentralization technology.

?The interest in the Blockchain is expected to increase; Gartner (research and business consultant institute) reported that there is $3.1 trillion worth of investments to be scheduled in blockchain technology in 2030.

Blockchain concept

The Blockchain is a decentralized system where the database of records of transactions is distributed, validated, and maintained by a network of computers worldwide. Instead of a single central authority such as a bank, the records are supervised by a large community. As a result, no person has control; moreover, no one can change or delete a transaction history.

Decentralized vs. Centralized

The need for Blockchain is rapidly increased because the current digital economy and businesses are built based on trusted authorities and centralized systems; thus, in cases of carrying out transactions, the authorities are consulted regarding the authenticity of the receiving party. The problem with third parties is that they can also be compromised, manipulated, hacked, or misused, which may ultimately incur wrongdoing. Contrariwise blockchain technology provides consensus mechanisms to address the problem of the need for a trusted authority without compromising the privacy of other entities, including digital assets and parties. All transactional details can be verified at any stage. A blockchain could serve as an engine of growth in today's digital infrastructure, where businesses and commerce industries depend on the Internet.

In centralized systems, users rely on authority to carry on transactions. For example, in banks, the customers rely on a banking system that adjusts customers' account balances after making transactions. The central body can alter the entire system by directly altering and updating databases at the back end in a centralized system. Centralized services do not allow distribution of authority and thus are single services providers. Online payment, cloud systems, governments, and courts are various examples of centralized systems.?

Blockchain consensus algorithms

On the other hand, blockchain systems provide fault-tolerant distributed computing systems where the authority could be distributed without trust in any central systems or authorities, using various types of consensus algorithms; basically, a consensus algorithm provides an atomic commit capability in which peers on a blockchain network agree on the blockchain network's current state as well as any state updates.?

Also, consensus algorithms affect how blockchain networks allow peers to engage with each other; examples of consensus algorithms include proof of work (PoW), proof of stake (PoS), proof of authority (PoA),?as well as byzantine fault-tolerant??(BFT).

Blockchain challenges

Blockchain is a promising technology; nevertheless, there are challenges in its way; for example, Blockchains are expensive and resource-intensive; moreover, its complex solution could cause a slow operation for transactions, and such reasoning could slow down the downshift of the space of this technology.

Recommendation

Finally, I believe the Blockchain is receiving worldwide acceptance. As a result, I recommend that all organizations start adapting the Blockchain technology from a technical perspective and prepare the laws and regulations to ensure the proper usage for the decentralized application.?

Thank you

Wasim Khalil Ali