What Is The Blockchain? | GWC Tech Hub Limited

With talk of it all over the place, you must have wondered at least once: what is the blockchain? A blockchain is a distributed database that maintains an expanding list of ordered records called blocks. These blocks, connected through cryptography, contain transaction information, timestamps, and cryptographic hashes of the preceding blocks. A blockchain is an open, decentralized, and distributed digital ledger used to log transactions across multiple computers, ensuring retroactive changes without impacting prior blocks and network consensus.

According to Wikipedia, the pseudonymous Satoshi Nakamoto invented blockchain in 2008 as the public transaction ledger for Bitcoin. It was the first digital currency to solve the double-spending problem without relying on a trusted authority or central server.

While primarily used for recording and storing cryptocurrency transactions like Bitcoin, blockchain advocates are exploring additional applications, such as:

1. Money transfers and payment processing: Blockchain enables faster transaction finalization and potentially reduces banking transfer fees.
2. Supply chain monitoring: Businesses can swiftly identify bottlenecks, track items in real-time, and monitor product quality across the supply chain using blockchain.
3. Electronic IDs: Microsoft is experimenting with blockchain to give users control over data access and aid in managing digital identities.
4. Information sharing: Blockchain serves as a secure intermediary for transferring and storing business data between sectors.
5. Royalties and copyrights protection: Blockchain technology offers transparent and real-time royalties for musicians and safeguards open-source programmers’ rights.
6. Internet of Things (IoT) network management: Blockchain could regulate IoT networks by identifying devices, monitoring their activity, and assessing their trustworthiness.
7. Medical field applications: Healthcare providers utilize blockchain for managing clinical trial data, electronic medical records, and regulatory compliance.

What are the business advantages of blockchain?

Blockchain offers several advantages over traditional databases, including:

1. Time reduction: Transaction settlement on the blockchain is faster as it eliminates the need for central authority verification.
2. Cost reductions: Blockchain minimizes supervision efforts and allows the direct exchange of valuables, reducing transaction costs.
3. Increased security: Blockchain’s security features guard against fraud, manipulation, and cybercrime.

What is the blockchain?

Blockchain derives its name from the way it maintains transaction data in interconnected blocks. As transactions increase, the blockchain expands. The time and order of transactions are recorded and confirmed in blocks, which are added to the blockchain according to user-defined rules.

Each block includes the previous block’s hash, timestamped batches of valid transactions, and unique identification. Due to the interconnection of blocks through prior block hashes, tampering with the blockchain is theoretically impossible.

The four main ideas of blockchain are:

1. Joint ledger: A shared ledger system, eliminating the repetition of effort found in traditional business networks.
2. Permissions: Blockchain ensures secure, authenticated, and verifiable transactions by granting permissions, and aiding compliance with data protection laws.
3. Digital contracts: Smart contracts, stored on the blockchain, automatically execute business transaction rules.
4. Consensus: All parties involved consent to network-verified transactions using various consensus procedures.

Blockchain networks consist of different roles, including Bitcoin users, regulators, operators, and certificate authorities.

Hyperledger:

Hyperledger is an open-source project initiated by the Linux Foundation in collaboration with industry players like IBM, Intel, and SAP. Its aim is to develop blockchain-based distributed ledgers with improved performance and reliability for global business transactions.

What about protection?

While blockchain is often referred to as “unhackable,” it is susceptible to 51% of attacks, where threat actors gain control over a majority of the computing power to corrupt the shared ledger’s integrity. Security professionals should view blockchain as valuable technology but not a one-size-fits-all solution.

Public and private blockchains offer different security levels. Public blockchains require computers connected to the public internet, while private blockchains restrict access to known corporations. Businesses concerned about confidentiality may prefer private blockchains, which verify transactions through selective endorsement.

Developers must prioritize security

when creating blockchain applications. Tasks such as risk assessments, threat models, and code analysis, including static code analysis, interactive application security testing, and software composition analysis, should be part of the development roadmap for a secure blockchain application.