Using Blockchain as a platform for consensus
Blockchain for consensus ensures that the network security of collected digital assets is not compromised.
Blockchain technology is a foundational yet rapidly emerging technology that maintains a set of continuously growing blocks. Various digital transactions from multiple industries, such as finance, retail, and healthcare, are carried out within the blockchain network. This blockchain network- intranet or internet contains the validation of all parties involved in a given transaction. The new block is added to the previous block, thereby forming a blockchain. The entire chain is regularly updated and any changes made are reflected in all copies in real-time. These blocks in a blockchain are linked and secured using cryptography, thereby meeting security constraints. According to Statistica Report 2017, the global blockchain technology is predicted to grow to 2.3 billion U.S. dollars by 2021. This highlights the rate at which the blockchain industry is growing. As blockchain collects digital assets and executes their validation, some consensus is essential to ensure that the digital transactions are secure. Blockchain for consensus helps to meet the security and trust constraints.
Benefits offered by blockchain Blockchain is an emerging technology, but it is rapidly spreading around us benefiting various industries with its many features. So, why so much buzz around this technology? Blockchain offers many advantages to various industries. One of the biggest advantages associated with blockchain technology is disintermediation. With blockchain, the need for any middlemen or intermediaries is eliminated. This is because blockchain makes use of a distributed ledger. This helps to lower the transactional costs. As all transactions recorded on a blockchain are processed and verified independent of one another. Besides, any transaction, once carried out on a blockchain, cannot be altered or reversed, i.e., all processes are immutable. This helps resolves the security and privacy issue. the traditional models use the known operator for operating the whole model, whereas blockchain is managed by an unknown organization or individual (we never know). Hence, it is necessary that the blockchain operators accept and agree on the consensus to ensure the network security is met without any violation occurring. Blockchain for consensus To ensure that the security and privacy on blockchain are not compromised, the blockchain operator must agree on the consensus before they get access to the blockchain database. The information recorded on the blockchain database must maintain consensus algorithm to run the technology for the betterment of its users smoothly. The following are two examples of how the consensus algorithm is carried out.
POW - Proof of work is used for miners where they are provided by the complex cryptographic puzzle. The one who solves the puzzle first gets a reward of 12.5 bitcoins plus transactional costs. Miners are responsible for maintaining the security related to the whole blockchain, including the new blocks that are regularly updated.
POS - Proof of stake is used as an alternative to POW. It is most extensively used to reduce the cost incurred in POW because of its expensive hardware and computational power. Here, each blockchain node contains an address, and the winner is identified by chance similar to winning a lottery.
Blockchain offers a new and secure platform for the transaction of all digital assets. Additionally, it attracts more users once users are sure that their information is secured.
Analista de Infraestrutura/Redes/CyberSeguran?a/ Perícia Digital/Suporte/TI/Membro ANPPD/SFPC/DEPC/SAP/CFSPC/RWVCPC
6 年Very Good!
Growing Teams Through Innovation
6 年Nice overview. As the article says, the benefit is the middleman would not be needed. It does make me think though, what are the aggregate computing and energy costs to maintain a blockchain, since the most secure blockchain requires many computers to be successful. Food for thought
Director of Risk Management | Risk Financing, Quantification & Mitigation
6 年Great read & honest feedback! Thanks
Immediate Joiner as Senior Java/Database Developer|Leader|Solution Designer
6 年Its an interesting article to read about Blockchain, as it is a new buzzword in todays times. I think if multiple copies of ledger provide security then one can think to have them without blockchain also & provide the inter-communication among the related programs to get them updated & matched synchronously. Plus if I need to get the list of all connected transactions across different times, then I think those transactions will be in different blocks & all blocks are encrypted...So if I need those details I need to decrypt all the related blocks every time which will be time consuming. Plus transactions are immutable, I am not sure if someone will build any system in which one transaction can be altered without making its separate entry in the system. I think, in blockchain, if you send money to wrong person then you are on the mercy of that person if s/he returns that, so this is a concern as you have noone to intervene in this for your help. And for POW or POS, lot of computing power is used to build a block & which may or may not be useful in some system. And blockchain claims complete anonymity of the transaction & its owner, so this is another point to consider before jumping on blockchain. If someone is not planning to allow any type of money laundering or to provide too much security to the transactions preventing the identification of their owners, which may cause national security issues, then take steps slowly to adopt blockchain for now.
Hong Kong & Taiwan CFO - Royal Canin chez Mars
6 年Good read but I think we could go further on the consensus algorithm used by blockchain nowadays and their strengths and weaknesses. Bitcoin for example is POW and about 65% of the hashrate is divided among 5 mining pools which could theoretically come together to launch a 51% attack on the bitcoin protocol. Separately it is harder to hard fork from a POW chain as miners will allocate their hash power towards the longer chain, more profitable and risk free to mine. This is not the case for POS consensus algorithm and you may be interested you look into another type of algorithm called ‘delegated Byzantine Fault Tolerant’ used by the Neo blockain at the moment and requires 66% of the bookkeeping nodes to give their approval for the law on the chain to pass and does not allow hard fork. This is another alternative to POS and POW.