Hello fellow steemians it's another week of the steemit crypto academy season 3. This week assignment by @stream4u is on blockchain.
Let's get started
What is Blockchain and What are the types of Blockchains / Explain in detail the types of Blockchain?
Most of us here are familiar with the word blockchain. It is not new to anyone dealing with crypto currency. What I understood as blockchain is that it is like a book of all recorded transactions on a network. Blockchain consist of blocks created in an encrypted way to record transactions and is connected to another validated block by a chain to make a Blockchain
Blockchain is a digital ledger consisting of transactions recorded in blocks. It is managed by a peer-to-peer network. Blockchain transactions records can not be altered or hacked . A Blockchain is a ledger that can record transactions/ data between two parties efficiently in a verified and permanent way.
Blockchain transaction can be public at time and some are privates. Will talk more about this when we get to the types of blockchain. A Blockchain network are decentralised. Blockchain transactions are irreversible and a blockchain network can be hacked because of the high security level.
Blockchain transaction are transparent because it distributes data stored in it across nodes of the blockchain. With this there is a full transparency in the blockchain. It comprises of three components "Blocks, nodes and miners"
The block stores recent transactions in it and it has to be validated before it will be added to the chains of validated/existing chains in the blockchain. The block records all information/ data of transaction performed on the blockchain. Data recorded on the block are permanent. And once a block is validated it allows the next blocks. The features of the block are
- Data stored in it and
- Nonce and hash
This are computer connected to the chain for smooth running not the blockchain. The nodes validate transaction before adding them to the chain by sharing data of new blocks with the node of another block using P2P protocol.
This are set of people that create blocks before it is added to the chain by minning. Miners validated and secure the blockchain network. If any changes are made in the blocks it has to be re-mined because it changes the hash. To have an acceptable hash we consider re-mining. And we know that all blocks has a Bloch hash so once a changes is made we have to re-mine previous blocks also.
TYPES OF BLOCKCHAIN
There are four types of blockchain networks which are
• Public blockchain
• Private blockchain
• Hybrid blockchain
• Consortium blockchain
This is a blockchain with less restrictions on the users. Anyone can sign up on a public blockchain platform to become an authorized user and be part of the blockchain network. Any member that is part of the blockchain system can have access to both current and past transactions and records on the blockchain. The mostly uses of this blockchain is for mining and exchange e.g bitcoin blockchain.
This is the opposite of a public blockchain. It is a restrictive blockchain operating only in a closed network. They are mostly used in organizations where only selected members are user of the blockchain network. It is similar to a centralized system. The level of authority, security, permission and accessibility is in the hands of the controlling organizations e.g Multichains
This is the combination of both public and private block chain.so it can be private permission based and at the same time be a public permission-less system. The users controls who gat access. Only a selected section of this blockchain are allowed to go public while others remains confidential in the private network. e.g Dragon chain
This blockchain is managed by more than one organizations. So it is a semi decentralized blockchain network. More than one organizations can be the user in this type of blockchain . The node can carry out exchange and mining on behalf of others. They are mostly used by banks and government organisations e.g Energy web foundation
What are the benefits of blockchain
Blockchain has many benefits I will explain some of the benefits.
One of the benefits of blockchain is transparency. All the data stored on the blockchain are visible to all validated member. All data stored on the blockchain network are recorded on a digital ledger. Blockchain as a decentralised network makes decentralised network a transparent network.
Blockchain network are highly secured network. Despite the transparency, it is highly secured. It is not possible for a blockchain network to be compromised because all data are stored in a digital ledgers. And information and stored in blocks through the nodes and the each block has a blockhash and the hash is a combination of both numbers and alphabet. With the hash the blockchain can not be compromised.
The blockchain network is a very fast network. It validate transactions in blocks withe high speed. Transaction on a blockchain network work are very fast. Since a blockchain network are decentralised system there is no need for a validation from a third party the transactions are only between the two members in concern.
All transactions on the blockchain network are traceable. Since all transactions are stored in blocks. This makes it easier for the transactions to be traced. The transfering account and the receiving wallet including the funds transferred are available for people who are interested to see.
Above are some of the benefits of blockchain that makes the blockchain network more reliable.
Explain Blockchain Distributed ledger.
Blockchain Distributed ledger is a digital ledger that stores all transactions carried out on the blockchain. Once a block is created and transactions is validated, the blocks are stored in the distribution ledger. It is managed by a peer-to-peer network protocol. Blockchain transactions records can not be altered or reverse sponges stored in the block. The distribution ledger are connected worldwide by nodes
Once a transaction is validated in the blocks , it is will be updated on different computers (nodes). And once the transactions is validated, it can't be reverse. The transactions are shared between the nodes using the P2P protocol for a secure purpose.
The data in the distribution ledger are transparent, secure in a way that it can t me altered. The nodes of the distribution ledger are capable of running on its own without interruption.
What Is Blockchain Double Spending and how Bitcoin handles this problem?
Double spending in cryptocurrency is one of the problems faced in blockchain. It is the act of the same amount of crypto twice. This process doesn't looks possible but it is. It is done by hackers and it is common in the bitcoin blockchain. Because it requires longer(10 min) to validated a transaction.
The hacker will send some amount of btc because btc tools longer period before it get validated, so the hacker will hack the block then will unsend the btc in the process of unsending the transactions double. That's just what the double spending in blockchain means.
One of the ways in which Bitcoin uses to solving this problem is by confirmations on the blockchain.
Confirmations on the blockchain This is one the ways of solving the problem. All transactions submitted will be confirmed one after the other and the one with the highest confirmations will be sent to the destination wallet will the other will be cancelled.
If an attacker is trying to manipulate the transactions, and he sent same amount of fund in a wallet to two other wallets, the one with the highest confirmations will be sent while the other will be cancelled.
For example I have 2 btc in my wallet and I want to send the btc to another wallet and also want to manipulate network by sending the same btc to another wallet once I sending the btc to two wallet, the transactions will remain unsuccessful and the blockchain will start confirming the transactions. The one with the highest confirmations will be transferred. The other transaction will be cancelled.
Practical + Theory, Visit Blockchain Demo and check section Blockchain, then explain in detail how Blocks Hashes Work in Blockchain, what will happen when any middle of the block get
I clicked on the link blockchain demo link and I click on the hash part first. After loading the page I received and hash see screen shot below
This is the screenshot of the hash I received now I try to know what will happen if I change the data of the data is changed so I inputs a data and the hash changed by adding the word crypto academy
Now I noticed something when am adding an additional data for every alphabet/ number added we receive a new hash.
Then I switched to the blockchain tab . I also received a hash and a nonce and a space is created for my data and I can mine too. So there are several blocks with one hash and a previous hash of another block.
This is from block one to block two you can see that the hash on block 1 is repeated on block 2 and a new hash is given for block two. So it continues like that see screenshot for block 3&4 below
Now for a minor or major in a block it changes the hash of every other blocks. The hash are invalid since that are not starting with 000 so it has to be re-mined. Here is a screenshot proving this
You can see that the hash has changed for both one and two blocks it also changes other blocks hash
You can see that it's different from the hash I got when I haven't altered the data. Now that I have altered the hash I have to mine all the block again and after mining my nonce was changed. I was given another nonce but my hash didn't changed
What Is Race Attack in blockchain? OR What Is Finney Attack in blockchain? OR What Is Vector76 Attack in blockchain?
What is race attack in blockchain
This can be created by creating a transaction two times to two receiving wallet at the same time when confirmations has not been done. It means trying to receive crypto of the same amount from a merchant to two different wallets by broadcasting two transactions if same amount to two different wallet from different nodes.
Race attack is just like double spending they are very related. The race attack is also for the aim of double spending. For instance how I want to buy 2 btc from a crypto merchant so I broadcasted two transactions if same amount Frome different nodes to two different wallets. So if the merchant sends the btc the first wallet that get validated gets the btc.
Limitations/disadvantages of Blockchain.
Irreversible: Transactions on the blockchain network are not reversible. So if any mistake is made in the process of transferring to a wallet and you transfer excess funds to the receiving wallet. This process can and be reversed once done.
High fees: The blockchain network has huge fee when transaction Is validated. For example the Eth blockchain have the highest transaction fee per transaction.
Energy consumption: the blockchain network consumes a lot of energy. When it comes to the mining of btc the energy used to mine btc in a year is even more that the total energy consumed by some small countries.
CRIME: Most blockchain wallet doesn't require a valid verification before the wallet can be used so some times some blockchain wallet are used to receive illegal crypto or to store illegal asset.
Blockchain transaction can be public at time and some are privates. Will talk more about this when we get to the types of blockchain. A Blockchain network are decentralised. Blockchain transactions are irreversible and a blockchain network can be hacked because of the high security level. It comprises of three components "Blocks, nodes and miners"
There are four types of blockchain. The private , public, consortium and hybrid blockchain.