The 21st century is all about technology. With the increasing need for modernization in our day-to-day lives, people are open to accepting new technologies. From using a remote for controlling devices to using voice notes for giving commands; modern technology has made space in our regular lives. Technologies like augmented reality and IoT that have gained pace in the past decade and now there’s a new addition to the pack i.e. Blockchain Technology.
Blockchain- The revolutionary technology impacting different industries miraculously was introduced in the markets with its very first modern application Bitcoin. Bitcoin is nothing but a form of digital currency (cryptocurrency) which can be used in the place of fiat money for trading. And the underlying technology behind the success of cryptocurrencies is termed as Blockchain.
There’s a common misconception among people that Bitcoin and Blockchain are one and the same, however, that is not the case. Creating cryptocurrencies is one of the applications of Blockchain technology and other than Bitcoin, there are numerous applications that are being developed on the basis of the blockchain technology.
What is a Blockchain?
In the simplest terms, Blockchain can be described as a data structure that holds transactional records and while ensuring security, transparency, and decentralization. You can also think of it as a chain or records stored in the forms of blocks which are controlled by no single authority. A blockchain is a distributed ledger that is completely open to any and everyone on the network. Once an information is stored on a blockchain, it is extremely difficult to change or alter it.
Each transaction on a blockchain is secured with a digital signature that proves its authenticity. Due to the use of encryption and digital signatures, the data stored on the blockchain is tamper-proof and cannot be changed.
Blockchain technology allows all the network participants to reach an agreement, commonly known as consensus. All the data stored on a blockchain is recorded digitally and has a common history which is available for all the network participants. This way, the chances of any fraudulent activity or duplication of transactions is eliminated without the need of a third-party.
In order to understand blockchain better, consider an example where you are looking for an option to send some money to your friend who lives in a different location. A general option that you can normally use can be a bank or via a payment transfer application like PayPal or Paytm. This option involves third parties in order to process the transaction due to which an extra amount of your money is deducted as transferring fee. Moreover, in cases like these, you cannot ensure the security of your money as it is highly possible that a hacker might disrupt the network and steal your money. In both the cases, it is the customer who suffers. This is where Blockchain comes in.
Instead of using a bank for transferring money, if we use a blockchain in such cases, the process becomes much easier and secure. There is no extra fee involved as the funds are directly processed by you thus, eliminating the need for a third party. Moreover, the blockchain database is decentralised and is not limited to any single location meaning that all the information and records kept on the blockchain are public and decentralized. Since the information is not stored in a single place, there’s no chance of corruption of the information by any hacker.
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How Does a Blockchain Work?
A blockchain is a chain of blocks that contain data or information. Despite being discovered earlier, the first successful and popular application of the Blockchain technology came into being in the year 2009 by Satoshi Nakamoto. He created the first digital cryptocurrency called Bitcoin through the use of Blockchain technology. Let’s understand how a blockchain actually works.
Each block in a blockchain network stores some information along with the hash of its previous block. A hash is a unique mathematical code which belongs to a specific block. If the information inside the block is modified, the hash of the block will be subject to modification too. The connection of blocks through unique hash keys is what makes blockchain secure.
While transactions take place on a blockchain, there are nodes on the network that validate these transactions. In Bitcoin blockchain, these nodes are called as miners and they use the concept of proof-of-work in order to process and validate transactions on the network. In order for a transaction to be valid, each block must refer to the hash of its preceding block. The transaction will take place only and only if the hash is correct. If a hacker tries to attack the network and change information of any specific block, the hash attached to the block will also get modified.
The breach will be detected as the modified hash will not match with the original one. This ensures that the blockchain is unalterable as if any change which is made to the chain of blocks will be reflected throughout the entire network and will be detected easily.
In a nutshell, here’s how blockchain allows transactions to take place:
A blockchain network makes use of public and private keys in order to form a digital signature ensuring security and consent.
Once the authentication is ensured through these keys, the need for authorization arises.
Blockchain allows participants of the network to perform mathematical verification and reach a consensus to agree on any particular value.
While making a transfer, the sender uses their private key and announces the transaction information over the network. A block is created containing information such as digital signature, timestamp, and the receiver’s public key.
This block of information is broadcasted through the network and the validation process starts.
Miners all over the network start solving the mathematical puzzle related to the transaction in order to process it. Solving this puzzle requires the miners to invest their computing power.
Upon solving the puzzle first, the miner receives rewards in the form of bitcoins. Such kind of problems is referred to as proof-of-work mathematical problems.
Once the majority of nodes in the network come to a consensus and agree to a common solution, the block is time stamped and added to the existing blockchain. This block can contain anything from money to data to messages.
After the new block is added to the chain, the existing copies of blockchain are updated for all the nodes on the network.
With the use of Blockchain, the interaction between two parties through a peer-to-peer model is easily accomplished without the requirement of any third party. Blockchain uses P2P protocol which allows all the network participants to hold an identical copy of transactions, enabling approval through a machine consensus. For example, if you wish to make any transaction from one part of the world to another, you can do that with blockchain all by yourself within a few seconds. Moreover, any interruptions or extra charges will not be deducted in the transfer.
Types of Blockchains
Though Blockchain has evolved to many levels since inception, there are two broad categories in which blockchains can be classified majorly i.e. Public and Private blockchains.
Before heading towards the difference between these two, let’s keep a check on the similarities that both public and private blockchain have:
Both Public and Private blockchain have peer-to-peer decentralized networks.
All the participants of the network maintain the copy of the shared ledger with them.
The network maintains copies of the ledger and synchronizes the latest update with the help of consensus.
The rules for immutability and safety of the ledger are decided and applied on the network so as to avoid malicious attacks.
Now that we know the similar elements of both these blockchains, let’s learn about each of them in detail and the differences between them.
Public Blockchain- As the name suggests, a public blockchain is a permissionless ledger and can be accessed by any and everyone. Anyone with the access to the internet is eligible to download and access it. Moreover, one can also check the overall history of the blockchain along with making any transactions through it. Public blockchains usually reward their network participants for performing the mining process and maintaining the immutability of the ledger. An example of the public blockchain is the Bitcoin Blockchain.
Public blockchains allow the communities worldwide to exchange information openly and securely. However, an obvious disadvantage of this type of blockchain is that it can be compromised if the rules around it are not executed strictly. Moreover, the rules decided and applied initially have very little scope of modification in the later stages.
Private Blockchain- Contrary to the public blockchain, private blockchains are the ones which are shared only among the trusted participants. The overall control of the network is in the hands of the owners. Moreover, the rules of a private blockchain can be changed according to different levels of permissions, exposure, number of members, authorization etc.
Private blockchains can run independently or can be integrated with other blockchains too. These are usually used by enterprises and organizations. Therefore, the level of trust required amongst the participants is higher in private blockchains.
Top 10 Reputable Blockchain Development Companies
Blockchain technology has emerged as one of the most promising services in the recent years. It holds tremendous potential to transform the workings of the financial sector. Living in a highly digitalized world, a range of large and medium-sized enterprises are exploring blockchain technology services in order to make a place in this competitive market.
Companies can really excel by providing blockchain solutions in this sector. A mix and match of strategies is all you need to see your business growing by leaps and bounds. Understanding nuances of blockchain technology can play an instrumental role in charting the future path of any company.
EngineerBabu is responsible for implementing, supporting and designing a distributed blockchain based network. Their enthusiastic and hard-working team of developers is responsible for analyzing the requirements of the client and designing blockchain technology around a certain business model and building and launching a blockchain network.
Founded in 2001 in Sunnyvale, Altoros is best known for satisfying the requirements of the clients in the best possible way. This global IT consultancy company lies in the heart of silicon valley and has its offices in Switzerland, Norway, Denmark, and the UK. With over 300 employees, Altoros works for enterprises by deploying cloud and software solutions of the Cloud Foundry ecosystem. Their areas of proficiency include big data, AI, blockchain technology and cloud consulting.
LeewayHertz has worked with a range of medium and large-sized enterprises like Identity Solution, Utility Bill Generation, and Global Supply Chain. This company was founded in 2007 and is headquartered in San Francisco, USA. What makes them stand out in the crowd among hundreds of other blockchain technology provider services is their dedication to deliver the best for every project.
4.Treehouse Technology Group
Treehouse Technology Group possesses a team of skilled and knowledgeable experts who aim at revolutionizing the workings of blockchain industry. It was founded in 2014 in Boston. They support thousands of users from Fortune 100 companies to startups by developing reliable and secure contracts using Ethereum, Solidity, and Proof of Stake Algorithm.
Founded in the year 2015 in Ukraine, openGeekslab is a reliable blockchain development company. They hold expertise in delivering ICO development services for various sectors. What makes them stand out in the crowd is their dedication to successfully launch ICO campaigns from token design and smart contract to ICO platform hosting and landing page design. Some of their areas of expertise include crypto wallets, Hyperledger Fabric, smart contracts, solidity, blockchain development and more.
Founded in 2014 in New York, Appinventiv made a mark in the competitive market within a few years of its establishment. Their young and agile team is committed to providing a great range of blockchain services to its customers. Some of their areas of excellence include initial coin offering, smart contract, cryptocurrencies, bitcoin, ethereum, tech audit and IoT in the blockchain.
ABES was founded in the year 2017 in Philadelphia and is a dedicated lab of R & D experts for blockchain technologies for a software development company Aplana Software Inc. It offers a full range of services which include architecture design, blockchain consulting, support and maintenance, services and applications development and smart contracts.
The company is focusing on implementation and research of innovative solutions related to blockchain technology for customers all over the world.
Founded in 2008 in San Fransisco, ArcTouch is a renowned blockchain development company which has achieved indefeasible feats in the competitive market. It has helped companies transform the way their business processes function. They believe in following a three-step approach when it comes to transforming your business through blockchain.
Founded in 2014 in San Francisco, this blockchain company has excelled in numerous fields of blockchain technology. It enables organizations to build a solid ground for financial services. They can securely manage your financial assets in a token format on private ledgers and transfer them across public networks.
Founded in 2014 in Stockholm, ChromaWay experts are working with a range of renowned real estate companies, financial institutions, and government agencies to provide them with smart contract solutions. Their ultimate focus is on blockchain as a database. Therefore, they introduced ‘Postchain’ also known as a consortium database, as a distributed database management tool. They basically work closely with real estate and finance companies.
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