Blockchain

Blockchain is a system of recording information in a way that makes it difficult or

impossible to change, hack, or cheat the system.

A blockchain is essentially a digital ledger of transactions that is duplicated and

distributed across the entire network of computer systems on the blockchain. Each
block in the chain contains a number of transactions, and every time a new
transaction occurs on the blockchain, a record of that transaction is added to
every participant’s ledger. The decentralized database managed by multiple
participants is known as Distributed Ledger Technology (DLT).

Blockchain is a type of DLT in which transactions are recorded with an immutable

cryptographic signature called a hash.

This means if one block in one chain was changed, it would be immediately
apparent it had been tampered with. If hackers wanted to corrupt a blockchain
system, they would have to change every block in the chain, across all of the
distributed versions of the chain.
Blockchains such as Bitcoin and Ethereum are constantly and continually growing
as blocks are being added to the chain, which significantly adds to the security of
the ledger.

Why blockchain technology?

There have been many attempts to create digital money in the past, but they have
always failed.

The prevailing issue is trust. If someone creates a new currency called the X
dollar, how can we trust that they won't give themselves a million X dollars, or
steal your X dollars for themselves?

Bitcoin was designed to solve this problem by using a specific type of database
called a blockchain. Most normal databases, such as an SQL database, have
someone in charge who can change the entries (e.g. giving themselves a million X
dollars). Blockchain is different because nobody is in charge; it’s run by the people
who use it. What’s more, bitcoins can’t be faked, hacked or double spent – so
people that own this money can trust that it has some value.

How Does Blockchain Work?

Blockchain consists of three important concepts: blocks, nodes and miners.

Blocks
Every chain consists of multiple blocks and each block has three basic elements:

• The data in the block.

• A 32-bit whole number called a nonce. The nonce is randomly generated
when a block is created, which then generates a block header hash.
• The hash is a 256-bit number wedded to the nonce. It must start with a huge
number of zeroes (i.e., be extremely small).
When the first block of a chain is created, a nonce generates the cryptographic
hash. The data in the block is considered signed and forever tied to the nonce and
hash unless it is mined.

Miners
Miners create new blocks on the chain through a process called mining.

In a blockchain every block has its own unique nonce and hash, but also
references the hash of the previous block in the chain, so mining a block isn't
easy, especially on large chains.

Miners use special software to solve the incredibly complex math problem of
finding a nonce that generates an accepted hash. Because the nonce is only 32
bits and the hash is 256, there are roughly four billion possible nonce-hash
combinations that must be mined before the right one is found. When that
happens miners are said to have found the "golden nonce" and their block is
added to the chain.

Making a change to any block earlier in the chain requires re-mining not just the
block with the change, but all of the blocks that come after. This is why it's
extremely difficult to manipulate blockchain technology. Think of it as "safety in
math" since finding golden nonces requires an enormous amount of time and
computing power.

When a block is successfully mined, the change is accepted by all of the nodes on
the network and the miner is rewarded financially.

Nodes
One of the most important concepts in blockchain technology is decentralization.
No one computer or organization can own the chain. Instead, it is a distributed
ledger via the nodes connected to the chain. Nodes can be any kind of electronic
device that maintains copies of the blockchain and keeps the network functioning.

Every node has its own copy of the blockchain and the network must
algorithmically approve any newly mined block for the chain to be updated,
trusted and verified. Since blockchains are transparent, every action in the ledger
can be easily checked and viewed. Each participant is given a unique
alphanumeric identification number that shows their transactions.
Combining public information with a system of checks-and-balances helps the
blockchain maintain integrity and creates trust among users. Essentially,
blockchains can be thought of as the scalability of trust via technology.

The role of Distributed Computing in Blockchain Technology

The management of the distributed immutable ledger, the backbone of Blockchain
is one of the main use cases of Distributed Computing in Blockchain. Distributed
Computing ensures that every node in the network has a copy of the blockchain
and that it is updated in real-time when a transaction takes place. Use of
Distributed Computing along with the peer-to-peer architecture, blockchain also
eliminates the use of a central authority to manage the network thus making the
blockchain secure, transparent, and immutable.

Another key feature in the Distributed Network of Blockchain is maintaining the

present state of the ledger. Once a set of transactions is validated and a block is
created by a miner that block is added to the Blockchain. Even though there are
many miners working on block creation the final block that is being added to the
blockchain will be created by a single winning miner and all the other nodes in the
blockchain should agree and synchronize with the present state of the Blockchain.
This is known as the consensus protocol followed by the Blockchain and it helps
the network to achieve reliability and maintain trust within the peers in the
Blockchain. Distributed Computing plays a major role in maintaining this
consensus protocol as every node has to communicate with its neighbor node in
order to arrive at a common decision.

Blockchain is nothing but another Distributed System that heavily uses the
concepts and elements of Distributed Systems and every computation that takes
place in the blockchain can be stated as Distributed System Computing.
Complications that can occur when using Distributed Computing for
Blockchain
• The network can be vulnerable to deterring cyberattacks such as Distributed
Denial of Service(DDoS) which can exhaust the resources of a computing
system by sending multiple fake requests.
• Another complication in using Distributed Computing for Blockchain is that
backups should be done on each node in the network. This process requires
higher computational power and a well-connected system of nodes.
• Security should be applied to each node individually as there is no central
authority to manage the system as a whole and the peer-to-peer
architecture of the distributed system allows any node to be accessed
anytime.

BLOCKCHAIN APPLICATIONS
Blockchain applications go far beyond cryptocurrency and bitcoin. With its ability
to create more transparency and fairness while also saving businesses time and
money,

• Secure sharing of medical data

• NFT marketplaces
• Music royalties tracking
• Cross-border payments
• Real-time IoT operating systems
• Personal identity security
• Anti-money laundering tracking system
• Supply chain and logistics monitoring
• Voting mechanism
• Advertising insights
• Original content creation
• Cryptocurrency exchange
• Real estate processing platform