Blockchain Architecture and Consensus Protoco
It’s understandable why the blockchain has been dubbed the most significant technology since the internet when you consider all the issues it can resolve (in addition to making you rich, we hope). The complexity of understanding how blockchains operate has, up until now, outweighed the relative simplicity of understanding what a blockchain is and why it has so many uses. This article will examine the construction of blockchains, how mining and consensus methods impact these structures, and how to use this information in practical settings.
What is Blockchain?
A blockchain is an electronic record of all bitcoin transactions. As additional blocks of finished recordings are uploaded to it, it keeps growing. Each block has a timestamp, a cryptographic hash of the previous one, and transaction data. Bitcoin nodes utilize the block chain to distinguish between legitimate Bitcoin transactions and efforts to resend already spent money.
Architecture of Blockchain
A peer-to-peer network of computers known as a blockchain network saves a copy of the blockchain on each device. The computers in a network called the Nodes. A transaction needs to be approved by the consensus protocol before it can be put to the blockchain. The network can agree on which transactions are valid and which are not thanks to the consensus protocol. A transaction is added to the blockchain
and cannot be modified or withdrawn once it has been verified.
Power of Work Vs. Power of Stake
The most popular consensus algorithm is proof of work, and Bitcoin makes use of it. In proof of work, miners compete with one another to figure out a challenging mathematical issue. The next block of transactions is added to the blockchain by the first miner to solve the issue, and they are rewarded with Bitcoins. As more miners join the network, the math problem becomes increasingly difficult, making it more difficult for anyone miner to solve the issue and contribute a block. As more miners join the network, this guarantees that blocks are added to the blockchain at a regular rate.
Bitcoin uses a Proof-of-Work (PoW) consensus method, which means that in order to confirm transactions and add blocks to the blockchain, miners must compete to solve challenging mathematical puzzles. In the near future, Ethereum intends to transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS). Validators stake their ETH on the network in a PoS system to receive rewards. PoS is more environmentally friendly than PoW because they do not require expensive mining equipment.
The Differences Between Public, Private, Permissioned, and Consortium
Anyone can join and take part in a decentralized network called a public blockchain. A private blockchain is a network that only those with permission to do so can access. A blockchain with permissions can be either public or private. A consortium blockchain is a permissioned network controlled by a select number of authorized users.
Public blockchains are typically open source, allowing anybody to inspect and modify the code. Private blockchains are often proprietary, which means that the owner is the only one who can examine and modify the code. Consortium blockchains can be either open source or proprietary depending on the governance model because they are controlled by a group of authorized users.
Bitcoin is the most well-known public blockchain, and Ethereum is a well-liked permissioned blockchain
The emergence of Cryptocurrency
The same underlying technology known as blockchain has been used to build a number of different digital currencies since the 2009 debut of Bitcoin. Blockchain is a distributed database that enables transactions that are safe, open, and unchangeable. Blockchain technology is used by cryptocurrencies to build a decentralized system that is not governed by a single central authority. Instead, the Proof-of-Work method is used to obtain consensus (PoW). PoW is a mathematical technique that makes sure everyone agrees on the blockchain’s current state. As a result, it is highly challenging for anyone to cheat or interfere with the system.
Advantages of Blockchain
Blockchain has a lot of benefits. Here are a few of these.
- A distributed database known as a blockchain enables safe, open, and unchangeable record-keeping.
- A blockchain network ensures transparency and trust by enabling real-time access to the whole database by all users.
- Data storage is decentralized, making it very difficult to break into or tamper with.
- The creation of immutable records of data using blockchain technology has a variety of uses, including voting systems and supply chain management.
- Since there is no single point of failure, the decentralized nature of blockchain also makes it extremely resilient to outages or attacks.
Disadvantages of Blockchain
Blockchain technology has many benefits, but there are also some possible drawbacks to be aware of. First of all, because blockchain is still a young technology, unanticipated security concerns can arise. The volatile world of cryptocurrencies is another factor that makes blockchain look like a dangerous investment. Third, since blockchain is decentralized, any issues can’t be blamed on a single central authority. Fourth, because every node in the network must verify every transaction, blockchains can be slow and complicated Fifth, due to the limited number of transactions that can be completed per second, scalability is a significant problem for blockchains.
The Future of Blockchain
Blockchain, a distributed ledger technology, has the power to completely change how we interact with the internet. Blockchain has the potential to revolutionize everything from the way we do business to the way we cast our votes by developing a safe, unbreakable method of storing data.
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I am a computer engineering student having an experience in Artificial intelligence, machine learning, computer vision , deep learning and block chain. I love to write and share my knowledge with the world community.