What is blockchain?

In a business network, the tracking assets and the process of recording transactions are facilitated by the shared immutable ledger called a blockchain. Assets are of two types they are tangible and intangible. The tangible assets are land, house, cash, etc. The intangible assets are copyrights, branding, properties patterns, intellectual property, etc. On a blockchain network, anything that has a value can be tracked and it can be traded.

Blockchain fundamentals

Information makes the business run. The business runs in a better way when the information is more accurate and faster. Blockchain fundamentals are called ideal for business because it delivers the information immediately; whereas, it shares and shows fully transparent information on an immutable ledger only when the network members give permission to access it. In a network tracking of orders, productions, accounts, and making payments can be tracked by blockchain fundamentals. It gives greater confidence efficiencies and opportunities when the user knows all the details of transactions from end to end.

Blockchain key elements

Ledger technology is distributed

The distributed ledger can be accessed by all the participants of networks. They can also access the unchangeable transaction records. The transaction records are recorded only once by using the ledger that is being shared and eliminates the replication of efforts of ancient business network techniques.

Unchangeable records

Once the transaction records are recorded to the ledger that is being shared they cannot be changed or tampered with by any participant. If any changes are made to the transaction records, the changes are visible. If there is any changes or error in the transaction record, then to reverse the error a new transaction record must be added. Both the old transaction record with the error and the newly added transaction record are visible.

Smart contracts

Smart contracts are the set of rules that are used to speed up transactions. Smart contracts execute automatically as it is being stored on the blockchain. The smart contract helps in defining conditions for corporate bonds. Corporate bonds may be travel insurance, terms that include travel insurance, transfers, insurance to be paid, etc.

Blockchain types

Public

A blockchain in which anyone can join and participate is called the public blockchain. An example of a public blockchain is bitcoin. But the disadvantage of this blockchain is that there is no security or has only weak security, there is no privacy for the transaction, it requires a continuous power supply.

Blockchain technology's first example is the bitcoin blockchain. Rather than digital currency modern blockchain provides tracking of digital assets but this blockchain works completely different from how bitcoin blockchain works. Bitcoin blockchain technology proved the notation that blockchain provides virtualized blank ledger which is used for tracking debits credits while offering a creative and the double-spending of cryptocurrency units are barred by the cryptographic solutions. The terms digital ledger and double-spend are associated with cryptocurrency blockchains. These terms are applied for transferring digital assets at a single time and tracking. Bitcoin is the database of a specific type that stores every transaction made. It requires a group of computers operated by an individual or group of individuals under a different roof. The computers which form the network of bitcoin are called nodes. The entire history of all bitcoin transactions forms the data of bitcoin. Thousands of nodes are used as a reference point to correct themselves if any error occurs in the bitcoin data.

Private

A private blockchain is the same as that of a public blockchain but peer-to-peer networks are decentralized. It has different organizations to look after every module. One organization takes care of the maintenance of the ledger that is being shared, the other controls the allowed participants, governing the network and executing the agreement protocol. The trust of the participants is boosted by seeing these use cases. A private blockchain runs in the back of a corporate firewall and can be hosted on other sites.

Permissioned

Businesses that take private blockchain also come under permissioned blockchain. Also, note that public blockchain also comes under permission blockchain networks. The only difference is that participants have restrictions to participate in the network and the transactions. They need to get an invitation or permission to participate in the network and the transactions.

Consortium

Responsibilities can be shared by multiple organizations for the maintenance of blockchain. The data access or the submission of the transaction can be determined by these already selected organizations. When a business requires permissioned participants and has responsibilities that are being shared for the blockchain, then a consortium blockchain is the ideal one.

Working of blockchain

Whenever the transaction occurs, it is stored as a block of data. The movement of an asset is shown by these transactions whether they are tangible or intangible. You can record any kind of data of your own choice and even it can answer the questions what, where, when, how much, how many, and so forth.

The data is stored in blocks and they are stored one after the another. These chain blocks of data are an asset and which is moved from one place to another or the hands of the ownership change it. These blocks have exact timing and sequence for their transactions and also these blocks are linked together securely so that the existing blocks do not get entered between any two blocks present.

The blockchain is an irreversible chain where the transactions are blocked together. Whenever the extra block is added it gives strength to the entire blockchain. This provides extra strength when the verification of former blocks occurs. This makes the blockchain technology tamper-free and shows the key of unchangeability. This makes the network members have trust over the blockchain technology and its fundaments over a transactions ledger.

Blockchain benefits

We need to change the operations that waste time on the efforts for making the replication of records or the validations done by the third party. Cyber attacks can be made on the records that are being kept in record-keeping systems. When the data are not completely transparent, it can slow down the data verification process. After the entry of the Internet of Things (IoT), it has accelerated the volumes of transactions. Because of these drawbacks, the business slows down. For this, the better option would be blockchain technology.

Trustworthy

With blockchain technology, the members of the network can be assured that they receive accurate data on time. The network members have confidential blockchain records and those who have permission can access them.

High efficiency

The network members have distributed ledger that helps in eliminating the time wasted on records for replication. The transactions are speeded up as it has the smart contract. Smart contract executes automatically as it is stored on the blockchain.

Security provided by blockchain

Blockchain technology provides a risk management system. A blockchain application has a comprehensive security strategy using frameworks of cybersecurity and assurance services that reduce attacks and frauds.

Context and Applications

This topic is important for postgraduate and undergraduate courses, particularly for,

• Bachelors in computer science engineering.
• Associate of science in computer science.

Practice problems

Question 1: Blockchain is employed in a___________ method in the instance of Bitcoin.

A. Centralized

B. Decentralized

C. Hub

D. None of these

Answer: Option B is correct.

Explanation: In the case of Bitcoin, blockchain is employed in a decentralized manner, meaning that no single person or group has control over the system—rather, all users have control collectively.

Question 2: Does private block is included in permissioned blockchain?

A. True

B. False

C. Can’t be defined

D. Wrong statement

Answer: Option A is correct.

Explanation: Businesses that take private blockchain also come under permissioned blockchain. The only difference is that participants have restrictions to participate in the network and the transactions.

Question 3: The computers which form the network of bitcoin are called _____.

A. Nodes

B. Nets

C. Sections

D. Endpoints

Answer: Option A is correct.

Explanation: Bitcoin is the database of a specific type that stores every transaction made. It requires a group of computers operated by an individual or group of individuals under a different roof. The computers which form the network of bitcoin are called nodes.

Question 4: In blockchain technology, the data is stored as ____.

A. Blocks

B. Table 

C. Array

D. List

Answer: Option A is correct.

Explanation: Blockchain is a database of a specific type that stores the data as blocks. Blocks are securely linked together one after the other.

Question 5: What is a blockchain?

A. Database type

B. View type

C. Object type

D. None of these

Answer: Option A is correct.

Explanation: The blockchain is a specific type of database. In a business network, the tracking assets and the process of recording transactions are facilitated by the shared immutable ledger called a blockchain.