The essence of block chain…
By: Sharbani Praharaj
Tags: Blockchain, Distributed Ledgers, Future Of Blockchain

Few common queries that comes to our mind on hearing block chain.

What is block chain ?

In simple words, block chain is a database where nobody is in charge i.e. a decentralized data base.it achieves digitalization of assets and information synchronization.

What is the structure of a block chain?

Block chains divide the data into different blocks, each block linked to the previous block through specific information to present a complete set of sequential data.

Each data block generally consists of these major elements.

The data in the block. An unsigned integer of 4 bytes called a nonce. The nonce is randomly generated when a block is created, which then generates a block header hash. The hash is a 32 bytes number wedded to the nonce.

Blocks in a block chain

How transactions work in a block chain?

Transaction in a block chain

Is block chain secure and traceable?

Yes, block chain is secure and even traceable for the below reasons.

Value exchange and data exchange between nodes is based on a rigorous encryption algorithm and reliable authentication system without mutual trust. Information cannot be altered: Every node in the system has the latest complete copy of the database. The ledger is available to all participants for complete transparency. Block chains adopt chain data structure, which makes data traceable with time stamps.

Is block chain energy efficient?

The hash used for unique identification of a block is created through a complex mathematical operation by the nodes which is called “Mining”. As mining requires great computation power , every node in the network cannot be a miner and miners are rewarded for this activity.

Now let’s understand what are different type of reward system.

PoW-Proof of Work- Whichever node/miner solves the puzzle first they get the reward.

PoS-Proof of Stake-Whichever miner has highest stake in the network, that is selected to be a miner.

So PoS based networks are much more energy efficient as only one computer is selected for mining. In fact, in PoS network nodes are called “forgers”.

Is block chain just about bitcoin?

Most of us think block chain is about bitcoin. But It is not true. Though block chain was predominantly invented for bitcoin, the use cases are far more useful and impressive.

Different companies are already suing block chain for different purposes, to name a few,

In health care industry where all of a patient’s medical data , collected from every single medical source under one app that lets the patient manage the data. — -doc.ai It is used for creating virtual environment to give interactive VR experience to users. — -High Fidelity Used in creating , storing and viewing block chain-based certificates helping individuals manage their own identity. — -Learning Machine For journalism to track sources and verify publications — -Civil Building a transparent supply chain industry for end to end tracking — -Chronicled

What is the future of blockchain in fintech industry?

Ripple has made its mark as a block chain-based payment network used for transferring money across the globe.

But the power of block chain will cause revolutionary changes in Fintech industry. It aims to revamps the wholesale banking completely by making banks sharing the ledger, making bank accounts programmable.

This way, expensive rejections for the payments with errors in account information or regulatory format can be avoided, specially involving multiple correspondent banks in a cross-border transaction. Similarly, paper checks can be completely avoided with exchange of digital information through block chain.

To conclude, block chain is a promising technology which gives us the control to our digital identity, ability to share more selectively whom we want, control over how our personal data is used, even more control over the information shared to us.

In my next article, will discuss about the verification and validation process of transactions by the nodes in a network.