Blockchain technical overview

Blockchains are tamper-proof distributed data structures in which transactions are recorded in chronological order and mapped in an understandable and unalterable form without any centralised control. Blockchain technology makes it possible to save and manage ownership more directly and efficiently than before because it works on the basis of uninterrupted and unalterable data recording. A particularly quick and simplified way to understand the basic structure of blockchains is by way of analogy with a distributed spreadsheet. Such a spreadsheet is copied and distributed throughout a network consisting of many computers.

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• Global Standards Mapping Initiative: An overview of blockchain technical standards
• Technical Overview
• Blockchain: A Technical Overview
• Blockchain technology overview
• Blockchain Technology Overview
• Blockchain Technology Explained: Introduction, Meaning, and Applications
• Blockchain Demystified: A Technical and Legal Introduction to Distributed and Centralised Ledgers
• Blockchain 101: NIST releases tech overview

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Home » Guides » Blockchain Nick Darlington. Or one where you store money in an online wallet not tied to a bank, meaning you are your own bank and have complete control over your money. This is not a world of the future; it is a world that an avid but growing number of early adopters live in right now.

And these are just a few of the important blockchain technology use cases that are transforming the way we trust and exchange value. Yet, for many, blockchain technology is still a mysterious or even intimidating topic. This post demystifies blockchain technology. A complete, easy-to-understand, step by step beginners blockchain breakdown. Blockchain technology is the concept or protocol behind the running of the blockchain. Blockchain technology makes cryptocurrencies digital currencies secured by cryptography like Bitcoin work just like the internet makes email possible.

The blockchain is an immutable unchangeable, meaning a transaction or file recorded cannot be changed distributed digital ledger digital record of transactions or data stored in multiple places on a computer network with many use cases beyond cryptocurrencies. Immutable and distributed are two fundamental blockchain properties. The immutability of the ledger means you can always trust it to be accurate.

Being distributed protects the blockchain from network attacks. The information contained in a block is dependent on and linked to the information in a previous block and, over time, forms a chain of transactions. Hence the word blockchain. Public blockchains are open, decentralized networks of computers accessible to anyone wanting to request or validate a transaction check for accuracy.

Those miners who validate transactions receive rewards. Public blockchains use proof-of-work or proof-of-stake consensus mechanisms discussed later. Private blockchains are not open, they have access restrictions. People who want to join require permission from the system administrator. For example, Hyperledger is a private, permissioned blockchain. Consortiums are a combination of public and private blockchains and contain centralized and decentralized features.

Some make a distinction between the two, while others consider them the same thing. A sidechain is a blockchain running parallel to the main chain. It allows users to move digital assets between two different blockchains and improves scalability and efficiency.

An example of a sidechain is the Liquid Network. For a complete and more detailed deep dive check out our article: A Concise History of Blockchain Technology. The first blockchain-like protocol was proposed by cryptographer David Chaum in Later in , Stuart Haber and W. Scott Stornetta wrote about their work on Consortiums. Cryptography is a deep and fascinating discipline with a history that goes back further than blockchain.

For a richer understanding of how cryptography helps blockchain technology, check out: Why Cryptography Makes Blockchain Unstoppable. Because blockchain technology is the technology behind the blockchain, it cannot be owned. But anyone can use the technology to run and own their own blockchains. Nakamoto sent ten bitcoins to Hal Finney, who built the first reusable proof-of-work system in For a more in-depth account of the next section, check out the thorough discussion in: What is Blockchain Technology and How Does it Work?

As a society, we created ledgers to store information—and they have a variety of applications. We also use ledgers in bookkeeping to record all the transactions a company makes. Bookkeeping mostly relies on double-entry accounting to store transactions.

Records stored using traditional ledgers are also easy to tamper with, meaning you can easily edit, remove, or add a record. Public blockchains solve both these problems — and the way we trust — by evolving the traditional bookkeeping model to triple-entry bookkeeping : transactions on a blockchain are cryptographically sealed by a third entry. This creates a tamper-proof record of transactions stored in blocks and verified by a distributed consensus mechanism. These consensus mechanisms also ensure new blocks get added to any blockchain.

When sending Bitcoin, you pay a small fee in bitcoin for a network of computers to confirm your transaction is valid. Your transaction is then bundled with other transactions pending in a queue to be added to a new block. The computers nodes then work to validate this list of transactions in the block by solving a complex mathematical problem to come up with a hash , which is a digit hexadecimal number.

Each new block added to the network is assigned a unique key via cryptography. As new blocks are continually added through the ongoing mining process, they become increasingly secure and harder to tamper with. Anyone caught trying to edit a record will simply be ignored. All future blocks then depend on information from prior blocks—and this dependency from one block to the next forms a secure chain: the blockchain. You can see this depicted below for house records stored on the blockchain.

For example, Block 2 provides a key after taking all the information from Block 1 into account including the key and inputting it into a formula.

Block 3, in turn, provides a new key after taking all the information from Block 1 and Block 2 into account including the key and inputting it into a formula. And so, the process repeats itself indefinitely.

A public blockchain functions through consensus mechanisms: the process for validating transactions without a third party like a bank. PoW and PoS are two such mechanisms. While their goal—to reach a consensus that a transaction is valid—remains the same, how they get there is a little different. PoW, the technical term for mining , is the original consensus mechanism.

It is still used by Bitcoin and Ethereum as of writing but, as mentioned, Ethereum will move to PoS by PoW is based on cryptography, which uses mathematical equations only computers can solve.

The example in the previous section of how blocks get added to the Bitcoin Blockchain explains this system. The two big problems with PoW are that it uses a lot of electricity and can only process a limited number of transactions simultaneously seven for Bitcoin. Transactions typically take at least ten minutes to complete, with this delay increasing when the network is congested.

PoS still uses cryptographic algorithms for validation, but transactions get validated by a chosen validator based on how many coins they hold, also known as their stake. The results are faster transaction times and lower costs. The NEO and Dash cryptocurrencies, for example, can send and receive transactions in seconds. Most blockchain projects are built around three core properties: decentralization, scalability, and security. But they often have to sacrifice one for the others.

Instead, decisions are made via consensus over a distributed network of computers. There is, however, one significant tradeoff: speed. Sending transactions takes longer because multiple confirmations are required to validate a transaction. Hence why Bitcoin is slow. Scalability is the ability of the system to cope with a growing number of transactions. Scalability is crucial for mass adoption because any system needs to operate efficiently as more people use it.

Below is a rough breakdown of how many transactions Ethereum, Bitcoin, and credit card companies can process per second:. But achieving scalability often comes at the expense of decentralization. EOS, for example, promises a maximum of TPS but has come under criticism for being too centralized. Security is the ability of a blockchain to be protected from attacks. Unfortunately, exchanges and source code have been hacked on many occasions, suggesting that many developers focus on scalability and decentralization at the expense of security.

Bitcoin and Etherum are the two biggest cryptocurrencies and blockchains, so discussing and comparing them makes sense.

The Bitcoin network is a public, decentralized peer-to-peer payment network that allows users to send and receive bitcoins without a bank getting involved. The digital currency or bitcoin token uses the ticker symbol BTC, and is the only cryptocurrency traded on the Bitcoin network. Transactions are recorded using a digital ledger, and nodes ensure the PoW consensus mechanism is followed or that mining happens. The Ethereum network is a public, decentralized peer-to-peer network.

Like Bitcoin, it uses nodes and allows users to send and receive cryptocurrency—in this case, Ether. The network is much more than a payment system—it was primarily created to deploy decentralized applications dapps and smart contracts. Smart contracts , however, operate on the Ethereum blockchain, and are contracts that automatically execute without an intermediary once certain conditions written into computer code are met. For example, a smart contract could be programmed to send a designated person a portion of your Bitcoin when you die.

In summary, Bitcoin and Ethereum networks are public, decentralized peer-to-peer networks with their own tokens: bitcoins and Ether. Both rely on cryptography, and both use digital ledger technology. For a complete Ethereum vs.

But they differ significantly in purpose and capability. Bitcoin is a decentralized payment system and a store of value. Its blockchain is a database of all bitcoin transactions and tracks their ownership. Ethereum is more than a payment system and allows smart contracts and apps to be built on it, making it a more sophisticated blockchain. Public open source blockchains are not without their hazards and challenges.

Here is a list of the top concerns:. Blockchain networks like Bitcoin use a lot of electricity to validate transactions, leading to environmental concerns.

Global Standards Mapping Initiative: An overview of blockchain technical standards

The server portion of a distributed ledger purpose-built for decentralized identity. This code is independent from but commonly associated with The Sovrin Foundation. The Sovrin Foundation is a public utility for identity, built on top of this codebase. People who install sovrin packages e. However, it is possible to use Indy Node with a different network, using whatever conventions a community chooses. If you haven't done so already, please visit the main resource for all things "Indy" to get acquainted with the code base, helpful resources, and up-to-date information: Hyperledger Wiki-Indy. You can have a look at Start Nodes to understand what needs to be done to create a Network, initialize and start Nodes, and what scripts are provided for this.

Technical Overview

Metrics details. Blockchains are proposed for many application domains apart from financial transactions. While there are generic blockchains that can be molded for specific use cases, they often lack a lightweight and easy-to-customize implementation. In this paper, we introduce the core concepts of blockchain technology and investigate a real-world use case from the energy domain, where customers trade portions of their photovoltaic power plant via a blockchain. This does not only involve blockchain technology, but also requires user interaction. Therefore, a fully custom, private, and permissioned blockchain is implemented from scratch. We evaluate and motivate the need for blockchain technology within this use case, as well as the desired properties of the system.

Blockchain: A Technical Overview

Official websites use. Share sensitive information only on official, secure websites. Author s Dylan J. Yaga , Peter M.

Blockchain technology overview

Blockchain has been receiving growing attention from both academia and practices. This paper aims to investigate the research status of blockchain-related studies and to analyze the development and evolution of this latest hot area via bibliometric analysis. We selected and explored papers published between and from the Web of Science Core Collection database. The analysis considers different dimensions, including annual publications and citation trends, author distribution, popular research themes, collaboration of countries regions and institutions, top papers, major publication journals conferences , supportive funding agencies, and emerging research trends. The results show that the number of blockchain literature is still increasing, and the research priorities in blockchain-related research shift during the observation period from bitcoin, cryptocurrency, blockchain, smart contract, internet of thing, to the distributed ledger, and challenge and the inefficiency of blockchain. The findings of this research deliver a holistic picture of blockchain research, which illuminates the future direction of research, and provides implications for both academic research and enterprise practice.

Blockchain Technology Overview

In this lecture, we provide an overview of Blockchain systems and systems engineering, focusing on technical details and applications of blockchain systems. We introduce cryptographic hash functions and present their properties. Then the data structure and the working principles of the Bitcoin blockchain are investigated in detail. We analyze the Proof of Work consensus mechanism of Bitcoin and illustrate the mining scheme. Following this, we demonstrate the system architecture of the Ethereum blockchain with a focus on the Ethereum Virtual Machine and smart contracts.

Blockchain Technology Explained: Introduction, Meaning, and Applications

By Sara Friedman. The National Institute of Standards and Technology has issued the final version of its interagency report on distributed ledger technology. The Blockchain Technology Overview is an updated version of a draft published in January that provides a high-level overview with explanations on how blockchain works, its use in cryptocurrencies, permissioned and permissionless blockchains, blockchain components and consensus models. Transactions on the blockchain are stored in a ledger under distributed ownership that minimizes trust, security and reliability concerns that can come with centralized ownership.

Blockchain Demystified: A Technical and Legal Introduction to Distributed and Centralised Ledgers

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Blockchain is an invention that was initially designed for the digital currency Bitcoin as it lets digital information to be distributed and secures it. However, the technology world has now found it useful in far more applications than this. To describe simply, the Blockchain is a distributed ledger of similar information records called blocks. This ledger is continually growing, and all the blocks are linked by cryptography.

Blockchain 101: NIST releases tech overview

Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. A blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the consensus of the network. While blockchain is still largely confined to use in recording and storing transactions for cryptocurrencies such as Bitcoin, proponents of blockchain technology are developing and testing other uses for blockchain, including these:. The primary benefit of blockchain is as a database for recording transactions, but its benefits extend far beyond those of a traditional database. Most notably, it removes the possibility of tampering by a malicious actor, as well as providing these business benefits:. Learn more. As the number of transactions grows, so does the blockchain.

I recently attended an industry seminar where the concept of the Blockchain was explained. At the end of the session, walking out of the lecture room I heard one of the attendees say to a colleague "I'm still not sure what exactly Blockchain is Many of us know that Blockchain is a topic that is hot at the moment. It's a topic that is disruptive.