Contents

o History of Blockchain ..................................................................................... 4

What is Bitcoin? 6

o How Bitcoin Works? ...................................................................................7

o Blockchain Version ......................................................................................... 8
o Blockchain 1.0: Currency ........................................................................... 8
o Blockchain 2.0: Smart Contracts ................................................................ 8
o Blockchain 3.0: DApps ............................................................................... 9
o Role of Bitcoin Miners ....................................................................................9
Bitcoin Mining ................................................................................................... 9
Role of Bitcoin Miners .......................................................................................9
How is the Bitcoin Blockchain built? ..............................................................10
o Blockchain Block Hashing ............................................................................13
Types of Blockchain
What is Blockchain?
A blockchain is a constantly growing ledger which keeps a permanent record of
all the transactions that have taken place in a secure, chronological, and
immutable way.
Let's breakdown the definition,
o Ledger: It is a file that is constantly growing.
o Permanent: It means once the transaction goes inside a blockchain, you
can put up it permanently in the ledger.
o Secure: Blockchain placed information in a secure way. It uses very
advanced cryptography to make sure that the information is locked inside
the blockchain.
o Chronological: Chronological means every transaction happens after the
previous one.
o Immutable: It means as you build all the transaction onto the blockchain,
this ledger can never be changed.
A blockchain is a chain of blocks which contain information. Each block
records all of the recent transactions, and once completed goes into the
blockchain as a permanent database. Each time a block gets completed, a new
block is generated.
Note: A blockchain can be used for the secure transfer of money, property,
contracts, etc. without requiring a third-party intermediary like bank or
government. Blockchain is a software protocol, but it could not be run without
the Internet (like SMTP used in email).
Who uses the blockchain?
Blockchain technology can be integrated into multiple areas. The primary use of
blockchains is as a distributed ledger for cryptocurrencies. It shows great
promise across a wide range of business applications like Banking, Finance,
Government, Healthcare, Insurance, Media and Entertainment, Retail, etc.

Need of Blockchain

Blockchain technology has become popular because of the following.

o Time reduction: In the financial industry, blockchain can allow the
quicker settlement of trades. It does not take a lengthy process for
verification, settlement, and clearance. It is because of a single version of
agreed-upon data available between all stakeholders.
o Unchangeable transactions: Blockchain register transactions in a
chronological order which certifies the unalterability of all operations,
means when a new block is added to the chain of ledgers, it cannot be
removed or modified.
o Reliability: Blockchain certifies and verifies the identities of each
interested parties. This removes double records, reducing rates and
accelerates transactions.
o Security: Blockchain uses very advanced cryptography to make sure that
the information is locked inside the blockchain. It uses Distributed Ledger
Technology where each party holds a copy of the original chain, so the
system remains operative, even the large number of other nodes fall.
o Collaboration: It allows each party to transact directly with each other
without requiring a third-party intermediary.
o Decentralized: It is decentralized because there is no central authority
supervising anything. There are standards rules on how every node
exchanges the blockchain information. This method ensures that all
transactions are validated, and all valid transactions are added one by one.
History of Blockchain

The blockchain technology was described in 1991 by the research

scientist Stuart Haber and W. Scott Stornetta. They wanted to introduce a
computationally practical solution for time-stamping digital documents so
that they could not be backdated or tampered. They develop a system using
the concept of cryptographically secured chain of blocks to store the time-
stamped documents.

In 1992, Merkle Trees were incorporated into the design, which

makes blockchain more efficient by allowing several documents to be
collected into one block. Merkle Trees are used to create a 'secured chain of
blocks.' It stored a series of data records, and each data records connected to
the one before it. The newest record in this chain contains the history of the
entire chain. However, this technology went unused, and the patent lapsed in
2004.

In 2004, computer scientist and cryptographic activist Hal

Finney introduced a system called Reusable Proof Of Work(RPoW) as a
prototype for digital cash. It was a significant early step in the history of
cryptocurrencies. The RPoW system worked by receiving a non-
exchangeable or a non-fungible Hashcash based proof of work token in
return, created an RSA-signed token that further could be transferred from
person to person.

RPoW solved the double-spending problem by keeping the ownership of

tokens registered on a trusted server. This server was designed to allow users
throughout the world to verify its correctness and integrity in real-time.

o
o Further, in 2008, Satoshi Nakamoto conceptualized the theory
of distributed blockchains. He improves the design in a unique way to
add blocks to the initial chain without requiring them to be signed by
trusted parties. The modified trees would contain a secure history of data
exchanges. It utilizes a peer-to-peer network for timestamping and
verifying each exchange. It could be managed autonomously without
requiring a central authority. These improvements were so beneficial that
makes blockchains as the backbone of cryptocurrencies. Today, the design
serves as the public ledger for all transactions in the cryptocurrency space.
o The evolution of blockchains has been steady and promising. The words
block and chain were used separately in Satoshi Nakamoto's original
paper but were eventually popularized as a single word, the Blockchain,
by 2016. In recent time, the file size of cryptocurrency blockchain
containing records of all transactions occurred on the network has grown
from 20 GB to 100 GB.

What is Bitcoin?

o Satoshi Nakamoto introduced the bitcoin in the year 2008. Bitcoin is a

cryptocurrency(virtual currency), or a digital currency that uses rules of
cryptography for regulation and generation of units of currency. A Bitcoin
fell under the scope of cryptocurrency and became the first and most
 valuable among them. It is commonly called decentralized digital
currency.
o A bitcoin is a type of digital assets which can be bought, sold, and transfer
between the two parties securely over the internet. Bitcoin can be used to
store values much like fine gold, silver, and some other type of
investments. We can also use bitcoin to buy products and services as well
as make payments and exchange values electronically.
o A bitcoin is different from other traditional currencies such
as Dollar, Pound, and Euro, which can also be used to buy things and
exchange values electronically. There are no physical coins for bitcoins or
paper bills. When you send bitcoin to someone or used bitcoin to buy
anything, you don?t need to use a bank, a credit card, or any other third-
party. Instead, you can simply send bitcoin directly to another party over
the internet with securely and almost instantly.
How Bitcoin Works?

When you send an email to another person, you just type an email address
and can communicate directly to that person. It is the same thing when you
send an instant message. This type of communication between two parties is
commonly known as Peer-to-Peer communication.

Whenever you want to transfer money to someone over the internet, you
need to use a service of third-party such as banks, a credit card, a PayPal, or
some other type of money transfer services. The reason for using third-party
is to ensure that you are transferring that money. In other words, you need to
be able to verify that both parties have done what they need to do in real
exchange.

For example, Suppose you click on a photo that you want to send it to
another person, so you can simply attach that photo to an email, type the
receiver email address and send it. The other person will receive the photo,
and you think it would end, but it is not. Now, we have two copies of photo,
one is a simple email, and another is an original file which is still on my
computer. Here, we send the copy of the file of the photo, not the original
file. This issue is commonly known as the double-spend problem.
The double-spend problem provides a challenge to determine whether a
transaction is real or not. How you can send a bitcoin to someone over the
internet without needing a bank or some other institution to certify the
transfer took place. The answer arises in a global network of thousands of
computers called a Bitcoin Network and a special type of decentralized laser
technology called blockchain.

In Bitcoin, all the information related to the transaction is captured securely

by using maths, protected cryptographically, and the data is stored and
verified across the entire network of computers. In other words, instead of
having a centralized database of the third-party such as banks to certify the
transaction took place. Bitcoin uses blockchain technology across a
decentralized network of computers to securely verify, confirm and record
each transaction. Since data is stored in a decentralized manner across a wide
network, there is no single point of failure. This makes blockchain more
secure and less prone to fraud, tampering or general system failure than
keeping them in a single centralized location.

Blockchain Version

The brief description of the evolution of blockchain technology and

its versioning from 1.0 to 3.0 are explained below.

Blockchain 1.0: Currency

The idea of creating money through solving computational puzzles was first
introduced in 2005 by Hal Finney, who created the first concept for
cryptocurrencies (The implementation of distributed ledger technology).
This ledger allows financial transactions based on blockchain technology or
DLT to be executed with Bitcoin. Bitcoin is the most prominent example in
this segment. It is being used as cash for the Internet and seen as the
enabler of an Internet of Money.

Blockchain 2.0: Smart Contracts

The main issues that came with Bitcoin are wasteful mining and lack of
network scalability. To overcome these issues, this version extends the
concept of Bitcoin beyond currency. The new key concepts are Smart
Contracts. It is small computer programs that "live" in the blockchain. They
are free computer programs which executed automatically and checked
conditions which are defined earlier like facilitation, verification or
enforcement. The big advantage of this technology that blockchain offers,
making it impossible to tamper or hack Smart Contracts. A most prominent
example is the Ethereum Blockchain, which provides a platform where the
developer community can build distributed applications for the Blockchain
network.

Quickly, the blockchain 2.0 version is successfully processing a high number

of daily transactions on a public network, where millions were raised
through ICO (Initial Coin Offerings), and the market cap increased rapidly.

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Blockchain 3.0: DApps

DApps is also known as a decentralized application. It uses decentralized

storage and communication. Its backend code is running on a decentralized
peer-to-peer network. A DApp can have frontend code hosted on
decentralized storages such as Ethereum Swarm and user interfaces written
in any language that can make a call to its backend like a traditional Apps.

Role of Bitcoin Miners

To understand the role of bitcoin miners, let us first understand Bitcoin

Mining.

Bitcoin Mining

Bitcoin mining is the process of adding transaction records to Bitcoin's public

ledger of past transactions. This ledger of past transactions is called the
blockchain as it is a chain of blocks. Bitcoin mining is used to secure and
verify transactions to the rest of the network.

Role of Bitcoin Miners

Within the bitcoin networks, there are a group of people known as Miners. In
miners, there was a process and confirm transactions. Anybody can apply for
a minor, and you could run the client yourself. However, these minors use
very powerful computers that are specifically designed to
mine bitcoin transaction. They do this by actually solving math problems and
resolving cryptographic issues because every transaction needs to be
cryptographically encoded and secured. These mathematical problems ensure
that nobody is tampering with that data.

Additionally, for this task, the minors are paid in bitcoins, which is the key
component in bitcoin. In Bitcoin, you cannot create money as like you create
regular fiat currencies such as Dollar, Euro, and Yuan. The bitcoin is created
by rewarding these minors for their work in solving the mathematical and
cryptographical problems.

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How is the Bitcoin Blockchain built?

The role of a minor is to build the blockchain of records that forms the
bitcoin ledger. These ledgers are called blocks, and each block contains all
the different transactions that have taken place. A new block is added in
every 10 minutes as a new Bitcoin Transaction takes place. So, as the minors
process these different transactions, they build the block, and when a block is
confirmed, it gets added to the blockchain. The bitcoin blockchain provides a
permanent record of all bitcoin transactions to the beginning.

Blockchain Hash Function

A hash function takes an input string (numbers, alphabets, media files) of any
length and transforms it into a fixed length. The fixed bit length can vary
(like 32-bit or 64-bit or 128-bit or 256-bit) depending on the hash function
which is being used. The fixed-length output is called a hash. This hash is
also the cryptographic byproduct of a hash algorithm. We can understand it
from the following diagram.
The hash algorithm has certain unique properties:
It produces a unique output (or hash).
It is a one-way function.
In the context of cryptocurrencies like Bitcoin, the blockchain uses this
cryptographic hash function's properties in its consensus mechanism. A
cryptographic hash is a digest or digital fingerprints of a certain amount of
data. In cryptographic hash functions, the transactions are taken as an input
and run through a hashing algorithm which gives an output of a fixed size.
SHA-256
A Bitcoin's blockchain uses SHA-256 (Secure Hash Algorithm) hashing
algorithm. In 2001, SHA-256 Hashing algorithm was developed by the
National Security Agency (NSA) in the USA.
How does the hashing process works?
For this hash function, we are going to use a program developed by Anders
Brownworth. This program can be found in the below link.
Anders Brownworth Hash
Program: https://anders.com/blockchain/hash.html

If we type any character in the data section, we will observe its corresponding
cryptographic hash in the hash section.
For example: We have type in data section: This is a great tutorial.
It will generate the corresponding Hash:
759831720aa978c890b11f62ae49d2417f600f26aaa51b3291a8d21a4216582a

Now if we change the text: "This is a great tutorial." To "this is a great

tutorial."
You will find the corresponding Hash:
4bc35380792eb7884df411ade1fa5fc3e82ab2da76f76dc83e1baecf48d60018
In the above, you can see that we have changed only the first character case
sentence from capital "T" to small "t" and it will change the whole Hash
value.
Note: If we write the same text again in a data section, it will always give the
same output. It is because you are creating a message digest of that one's
specific amount of data.
Since the Hash function is a one-way function, there is no way to get back
entire text from the generated hash. This is different from traditional
cryptographic functions like encryption where you can encrypt something
using the key and by using decryption, you can decrypt the message to its
original form.
Blockchain Block Hashing

In this section, we are going to learn how SHA-256 applies to build a block
within a blockchain. We will discuss here in the context of the Bitcoin
blockchain and understand how this ties into the role of miners. The minors
are actually in the process of building blocks, and these blocks are added to a
blockchain to build out what the Bitcoin blockchain will be.

In the below image, you can see that this block is composed of a block
number, data field, cryptographic hash associated with it and a Nonce.

In the above image, the generated hash would look like

00001acbm010gfh1010xxx. I'd like to point out that this hash has four
leading zeros. The four leading zero's describes whether the block is valid or
not. For practical purposes, you will see that this hash is corresponding to the
nonce, and the block number is corresponding to the available data. Since the
hash has four leading zeroes, therefore, it is a valid block.
If we make any change in the data section, it will give the completely
different hash that can be shown in the below image.

If the newly generating hash does not have four leading zeroes, then it will
not a valid block. To make the block valid, we will do it by using the field
called nonce.

Nonce stands for a Number Used Once in a cryptographic communication

such that the block's hash meets a certain criterion. This criterion could be
generated a hash that must have its leading four digits to be zero. Thus, the
generated hash would look like 00001acbm010gfh1010xxx.

A nonce is basically a random number which figures out how you can
actually make this specific block provide you with a valid hash. The way you
can do this is by changing the nonce manually. Generally, the miner starts
with a Nonce value of 1 and keeps on incrementing it until the generated hash
meets the specified criterion. Thus, it may take several iterations until the
desired hash with four leading zeros is generated. The expected time for
generating a block in the bitcoin system is 10 minutes. Once the miner
successfully mines the block, he releases that block in the system and making
it the last block in the chain.

In Anders Brownworth Hash Program, when we click mine button as shown

in the image, it will give the valid block. This block has a unique nonce with
hash leading four zeroes in the beginning.
 o

How Block Hashes Work in Blockchain?

Blockchain is a breakthrough technology that has changed the way we think

about digital security and trust. It is a distributed and decentralized ledger that
enables the safe and transparent exchange of information and currency. Block
hashes are at the foundation of blockchain technology, and they play a critical
role in preserving the blockchain's integrity and immutability.
In this post, we will look at what block hashes are, how they operate, and why
they are important in the blockchain.
What are Block Hashes?
A block hash may be thought of as a special identification number that is given
to each block on the blockchain. It is a cryptographic hash function that outputs
a fixed-size block of data after taking in a block of data. This output is a distinct
string of characters that acts as the block's digital fingerprint.
Block hashes are created by applying sophisticated mathematical methods that
consider the block's data as well as a nonce value, a random integer that is
added to the block to make sure the hash is generated only once.
How do Block Hashes Work?
A cryptographic hash function is used to create the block hash whenever a new
block is added to the blockchain. This function generates a fixed-size output
after taking in the block's contents, including the transaction data, timestamp,
and preceding block hash.
The block header is then updated to include this output in addition to other
details like the nonce value and the current blockchain protocol version. A final
block hash is then generated by performing another hash on the block header.
The block hash is then sent out to the network to be confirmed by other
blockchain nodes. This verification procedure comprises determining if the
block hash satisfies a set of predetermined standards, such as the degree of
difficulty of the employed proof-of-work algorithm.
The block is uploaded to the blockchain when the block hash has been
confirmed. The new block also contains the prior block's hash, resulting in a
chain of blocks that are connected by their individual block hashes.

Significance of Block Hashes in Blockchain

Block hashes are essential for maintaining the immutability and integrity of the
blockchain. Every attempt to edit a block will cause the block hash to change
since every block in the blockchain contains the hash of the preceding block. It
will be nearly hard to tamper with the blockchain since other nodes in the
network will instantly notice this change.
In the blockchain, consensus is also achieved via block hashes. The process of
creating a block hash is computationally demanding and needs a substantial
amount of processing power since the block hash is produced using a proof-of-
work method. By doing so, the blockchain is protected against assaults from bad
actors who could try to change it by adding or removing blocks.
Various advantages in Blockchain Technology
In the blockchain, block hashes especially offer various advantages, including:
 1. Security: Blockchain security is quite good thanks to block hashes. It
becomes challenging for an attacker to modify a block without being
noticed since each block is connected to the one before it using its hash.
If a block is altered, the network will reject the change because the hash
of the changed block differs from the hash of the original block.
2. Immutability: The immutability of the data contained in the blockchain
is ensured through the use of block hashes. A block cannot be modified or
removed from the blockchain once it has been added since doing so
would invalidate the hash of all future blocks.
3. Verification: In the blockchain, block hashes are used for verification. A
block's validity may be confirmed by nodes in the network by comparing
its hash to the hash of the preceding block. The block is regarded as
legitimate if the hash matches.
4. Consensus: The creation of a block hash needs a considerable amount of
processing power. This ensures that the blockchain is decentralized and
democratic by making it difficult for any single entity to dominate it.
Block hashes are a vital part of blockchain technology, to sum up. They offer a
safe and open method for transferring and storing data in the digital world.
Block hashes have the potential to completely change how we communicate and
conduct business online by guaranteeing the immutability and security of the
blockchain.
Blockchain and data privacy
What exactly is Blockchain?
The blockchain, as a secure ledger, organises the increasing number of
transactions into a hierarchically growing chain of blocks , with each block
guarded by cryptography techniques to ensure the robust integrity of its
transaction data. New blocks can only be committed to the global chain of
blocks if the decentralised consensus method is successfully completed.
In particular, a block retains the hash value of the whole block itself, which may
be viewed as its encryption image, as well as the hash value of the preceding
block, serving as a cryptographic connection to the before block in the the
distributed ledger.
Introduction
Blockchain has become one amongst the most highly anticipated technological
advances in recent years. However, blockchain technology as well as
information security laws and regulations have advanced significantly.
Blockchain provides the benefits of decentralisation and distributed global
ledger sharing, but it also carries a possibility of data privacy leaks. There is still
a wide room for the development of different protection techniques to prevent
harmful attackers from stealing the personal information of blockchain users.
First, this article examines the chain block design, as well as the Bitcoin data
privacy danger. Blockchain is a decentralised data processing technique in
which all network participants are responsible for data distribution and storage.
With the massive amounts expansion of the blockchain technology in recent
years, many countries' energy departments have started using blockchain
technologies for smart grids in areas such as trading in energy applications,
electric car applications, energy security applications, and microgrid operations.
Blockchain technology, when integrated with cryptography, can provide safe
real-time metering & communication procedures for smart grids, significantly
lowering the high costs of transmission generated by the previous approach. The
use of the blockchain in the process of trading electric energy may successfully
minimise energy loss while also improving the trading system's real-time
performance and security. Without the use of third intermediaries, businesses
and consumers can trade power and capital on a peer-to-peer and trustworthy
basis.

Data privacy introduction

So far, the majority of public interest in blockchain has been on crypto-
currencies, particularly Bitcoin, as well as associated financial services like
first-time coin offerings (ICOs). Less overtly, but maybe more critically in the
long run, significant investment is being made in the creation of a wide range of
blockchain applications, ranging from asset registration (including property) to
self-executing ('smart') contracts. Despite widespread misunderstanding about
what blockchain is or could become, blockchain and other distributed ledger
methods (DLTs) have attracted the attention of governments, companies, and
individuals, and they have become a focus of interest for lawmakers and
regulators around the world.
In most applications, transactions are globally disclosed and are not encrypted.
If this data involves personal data, such as "medical or financial data," it causes
regulatory and legal issues, particularly in Germany. One option is to
exclusively store data that is encrypted in the distributed ledger, but this raises
another issue: if a key needed to decode specific details is lost, the information
may not be restored precisely. In addition, if a key has been taken or publicised,
all data in the blockchain is forever decrypted because the data cannot be edited.
Blockchain, on the other hand, can help to improve preventive security methods,
particularly in terms of identification and access.
How blockchain supports data privacy
In the modern era, where all things are digital and data is king, privacy is now
an unavoidable concern. Today's users having little to no influence over how
online apps and websites use their data and private data. Whereas this data can
be utilised to provide personalised searches and personalised product and
service suggestions, it can also lead to fraud and security breaches. Blockchain
technology offers a solution! Let us look at some of the ways Blockchain
technology works to preserve the confidentiality and safety of users and their
data.
o Decentralisation and Agreement : Decentralisation is a crucial
component that contributes to the security of Blockchain. Whereas a
standard database keeps data in a single location, Blockchain stores data
by replicating it to multiple locations, resulting in a distributed ledger. As
 a result, in order to secure data privacy, Blockchain requires non-
traditional procedures.Each exchange on the system is open and is stored
on a collection of devices rather than just one computer. Every device
connected to a blockchain gets an electronic copy of each transaction that
occurs on the blockchain.

This implies that the blockchain is collaboratively run and governed by a

community of individuals who depend on the system. Any new block
added to the chain by a node in the network is first validated by the
Blockchain network's other nodes. The modified blocks are discarded.
Only when more than 51% of the computers in the blockchain agree on
the new block will it be properly added to the chain. This is referred to as
the Majority mechanism.
o Hashing and Blocks : As the name implies, blockchain is an ordered
sequence or series of blocks. Each one of these blocks is made up of three
distinct components, namely,
o The information or data
o The hash value of the block
o The prior block in the chain's hash
The information in a block is encrypted and has a unique identity (similar to a
fingerprint). This identification is referred to as a Hash. Each block in the chain
has responsibility for storing the encryption key of the previous block. This
contributes to the Blockchain system's effectiveness and security.The Genesis
Block is the initial block in a chain that is unconnected to any earlier block.
If anything inside the block changes, the hash of the blocks also changes. That
means the following block is going to point to an additional hash rather than the
one that came preceding it (it no more stores the preceding block's valid hash).
As a result, all subsequent blocks in the sequence become invalid. Because of
this property, hashes may be used as an effective method for detecting
modifications and manipulation in Blockchain data. As a result, the information
is protected and tamper-proof.
o Proof of work on Sample : Proof work is a process or approach used to
slow down the generation of new blocks. As a consequence, if a person
interferes with the contents in one block, he or she must recalculate the
evidence of work for every other block in the chain. Individuals will find
it difficult to tamper without a block as a result of this.
 Proof of operation and hashing algorithms work together to reduce fraud
and hence ensure the integrity and security of data in the network of
Blockchain devices.
o Public Addresses : Every node in the distributed ledger (computer or
other device) has a unique private key and public address. When a node
participates in an exchange, it simply communicates its public address to
the rest of the world, not the private key. This public name is a random
string of digits and letters. When other Blockchain network users see the
public location, all they can see is the transaction record and the general
address. However, personal and financial data such as the user's name,
age, and address remain anonymous. This mechanism ensures that the
user's privacy is protected.
o Encryption and Private Key Control: Blockchain employs
sophisticated encryption algorithms to secure data. Each participant in a
blockchain network has a unique cryptographic key pair: a public key and
a private key. Data is encrypted using the recipient's public key, ensuring
that only the intended recipient can decrypt and access the information.
This cryptographic encryption protects sensitive data during transmission
 and storage, reducing the risk of unauthorized access.

The private key, which is securely held by the data owner, grants access
to the data stored on the blockchain. This ownership and control over the
private key empower individuals and organizations to manage their own
data, eliminating the need to trust centralized entities with sensitive
information. Users can share selective access to their data by granting
temporary or permanent cryptographic permissions, thereby enhancing
data privacy and control.
o Proof of Zero-Knowledge : Zero Knowing Proof is an excellent method
for safeguarding private information in the Blockchain system. This
strategy allows a person to demonstrate to other people that a particular
assertion is true without revealing any extra information. In an exchange,
the prover must demonstrate to the verifier whether a certain value (also
referred to to both the provide and the verifier) is accurate and reliable,
while eliminating any extraneous information.
o It's like proving to somebody that you know the secret without
actually telling them the secret.
 o Smart Contracts and Permissioned Blockchains: Smart contracts, self-
executing programs running on blockchain networks, provide an
additional layer of privacy and control over data. Smart contracts enable
predefined rules and conditions to be enforced automatically, eliminating
the need for intermediaries. By embedding privacy features within smart
contracts, sensitive information can be securely shared and processed
without exposing it to unauthorized parties.
In permissioned blockchains, access to the network and data is restricted to
trusted participants, enhancing privacy and confidentiality. These private
blockchains are particularly useful in enterprise settings, where specific data
privacy requirements need to be met. By carefully managing access control and
permissions, organizations can ensure that only authorized entities can
participate and access sensitive data.
Data privacy Threads in blockchain :
o Pseudonymity versus Anonymity: One of the fundamental
characteristics of blockchain is the pseudonymous nature of transactions.
While users are represented by cryptographic addresses rather than their
real identities, the transparency of the blockchain can still enable the
linkage of transactions to specific individuals or entities. With the
increasing availability of external data sources and sophisticated analysis
techniques, the pseudonymous nature of blockchain transactions may be
compromised, jeopardizing the privacy of participants.
o Data Leakage through Off-Chain Activities: Although blockchain
itself provides a secure environment for data storage, certain interactions
and activities related to blockchain may occur off-chain. Off-chain data
includes information shared through external platforms, communication
channels, or smart contracts that interact with external systems. These
off-chain activities can potentially expose sensitive data, such as personal
details or transactional information, to vulnerabilities outside the
blockchain environment. Consequently, the privacy of participants' data
becomes dependent on the security measures implemented in these
external components.
o Inadequate Implementation of Privacy Protocols: While blockchain
offers potential solutions for privacy concerns, the implementation of
privacy protocols and techniques is not standardized across all blockchain
 networks. Privacy features such as zero-knowledge proofs, ring
signatures, or stealth addresses can enhance confidentiality, but their
usage and effectiveness can vary depending on the specific blockchain
implementation. Inadequate implementation or misconfiguration of
privacy protocols can lead to unintended data exposure, rendering the
blockchain susceptible to privacy breaches.
o Public versus Private Blockchains: Public blockchains, such as Bitcoin
and Ethereum, maintain transparent transaction records visible to anyone
in the network. While these blockchains provide strong security
guarantees, they inherently sacrifice privacy to achieve decentralization
and transparency. On the other hand, private or permissioned blockchains
limit access to trusted participants, enabling greater privacy control.
However, even in private blockchains, data privacy can be compromised
if participants do not adhere to strict access controls or if malicious actors
infiltrate the network.
o Storage of Immutable Data: The immutability of data recorded on the
blockchain, a key feature ensuring data integrity, can also pose challenges
to privacy. Once information is written on the blockchain, it cannot be
altered or deleted. In cases where personal or sensitive data is
inadvertently stored on the blockchain, eradicating that information
becomes extremely challenging. This immutability feature conflicts with
the "right to be forgotten" principle, which is a crucial aspect of data
privacy regulations such as the General Data Protection Regulation
(GDPR).

Implementation of Blockchain in Java

Blockchain is a cutting-edge technology that has the ability to completely
change how we safely store and move data. With the use of distributed ledger
technology, transactions are securely and impenetrably recorded. Although the
technology is most frequently linked to digital currencies like Bitcoin, its
potential uses go well beyond that.
Java is a well-liked programming language that is frequently employed in the
creation of business applications. It has been more popular in recent years to use
blockchain technology with Java-based apps. We shall examine how blockchain
is implemented in Java in this post.
Describe a blockchain.
Let's first define a blockchain before moving on to Java's implementation of the
technology. A blockchain is simply a network of computers-based distributed
digital ledger of transactions. Multiple transactions are recorded in each block
of the chain, and once a block has been added to the chain, it cannot be changed
or removed.
The decentralization of blockchain technology is a key characteristic. A
blockchain is dispersed among a network of nodes, as opposed to traditional
databases, which are often centralized and managed by a single company. Each
node has a copy of the complete chain. Because there is no single point of
failure or weakness, the blockchain is very safe.
Implementing Blockchain in Java
Let's examine the Java implementation of blockchain now that we have a
fundamental idea of what it is. The Hyperledger Fabric, Ethereum, and Corda
blockchain frameworks are just a few of the ones that run on Java. The main
emphasis of this paper will be Hyperledger Fabric, one of the most popular
blockchain frameworks for business applications.
What is Blockchain Wallet ?

Blockchain technology has gained tremendous interest in recent years as a safe

and dependable means of conducting online transactions. The Blockchain wallet,
which functions as a digital wallet for holding cryptocurrency, is a key
component of this technology. In this essay, we will define a Blockchain wallet
and explain how it works.
A Blockchain wallet is a digital wallet that enables users to securely store,
transmit, and receive cryptocurrency. It is a software programme that uses
Blockchain technology to handle users' private and public keys, allowing them
to transact with cryptocurrencies like Bitcoin and Ethereum. The wallet runs on
a decentralized network, which means it does not rely on a centralized authority
to function, making it extremely safe and transparent.
The operation of the wallet is centred on Blockchain technology, which is a
distributed ledger system that records all bitcoin transactions. The Blockchain
wallet operates by producing a digital signature for each transaction, which
protects the transaction's legitimacy and integrity. Before the transaction is
posted to the Blockchain, the network nodes verify the signature. The
transaction is irreversible once it is recorded on the Blockchain, making the
procedure extremely safe.
Desktop wallets, mobile wallets, online wallets, and hardware wallets are all
examples of Blockchain wallets. Each wallet has its own set of features and
perks. Desktop wallets are software apps that are installed on a desktop
computer and provide the user complete control over their private keys.
Mobile wallets are smartphone applications that allow users to access
cryptocurrencies while on the go. Web wallets, which can be accessed via a web
browser, allow users to manage their bitcoins online. Hardware wallets, on the
other hand, are actual devices that securely store the user's private keys offline.
One of the major benefits of Blockchain wallets is their high degree of security.
Because the wallet runs on a decentralized network, there is no need for a
central authority, making it nearly difficult for hackers to take cryptocurrency
from the wallet. Furthermore, the combination of private and public keys
guarantees that only the wallet owner has access to the contents of the wallet,
adding an extra degree of protection.
To elaborate, Blockchain wallets enable users to handle their cryptocurrencies in
an intuitive and easy manner. By simplifying the difficult process of bitcoin
administration, they give consumers a smooth and hassle-free experience. The
wallet's UI is intended to provide a straightforward and simple platform for
users to manage their bitcoins.
The security of the Blockchain wallet is based on the usage of both public and
private keys, which are utilized to authenticate transactions. The private key is a
secret code that only the wallet owner knows about and is used to sign
transactions. In contrast, the public key is accessible to everyone on the entire
network and is used to accept cryptocurrency. Together, these keys maintain
transaction security, making it nearly difficult for anybody to take
cryptocurrency from the wallet.
Blockchain wallets enable transparency in addition to security. All transactions
are recorded on the Blockchain, allowing users to easily follow and verify the
validity of each transaction. Because of this transparency, there is no need for
middlemen such as banks or financial institutions, lowering transaction costs
and boosting transaction speed.
Another advantage of Blockchain wallets is that they are not geographically
constrained. They may be accessible from anywhere in the globe as long as
there is an internet connection. This characteristic makes them excellent for
performing international transactions since it eliminates the need for costly
foreign currency costs.
However, it is important to highlight that the security of Blockchain wallets is
contingent on the user's adherence to security rules. To prevent unauthorized
access to the wallet, users must follow suggested security precautions such as
creating a strong password and enabling two-factor authentication.
Finally, Blockchain wallets are a game-changing technology that gives a safe
and simple way to manage cryptocurrency. They provide high levels of security,
transparency, and simplicity, making them suitable for cryptocurrency
transactions by people and organizations. While they offer several benefits, it is
important to follow prescribed security practices to ensure the protection of
cryptocurrencies kept in the wallet.
Applications of Blockchain Wallet
Blockchain wallets offer a variety of uses that make them a valuable resource
for consumers and organizations wishing to conduct bitcoin transactions.
Blockchain wallets may be used for a variety of purposes, including:
1. Storing cryptocurrencies: Blockchain wallets are mostly used to
securely store bitcoins. Because the wallet employs private and public
keys, only the wallet owner has access to and management of the
cryptocurrency stored in the wallet.
2. Sending and receiving cryptocurrencies: Blockchain wallets allow
users to quickly transfer and receive bitcoins. Users may transfer bitcoin
to anybody having a cryptocurrency wallet address, no matter where they
are in the globe.
3. Online shopping:Blockchain wallets may be used to perform
cryptocurrency-based online purchases. This function eliminates the need
for traditional payment methods and increases the security of online
purchase.
4. Investment: Blockchain wallets can be used to invest in cryptocurrencies,
allowing individuals to participate in a decentralized asset class that is not
controlled by any central authority.
5. Remittances: Blockchain wallets enable international money transfers
without the involvement of middlemen such as banks or financial
organizations. This function avoids the need for costly foreign currency
fees and lowers transaction expenses.
 6. Decentralized applications: Blockchain wallets can be used to access
the Blockchain network's decentralized apps (DApps). DApps are
decentralized apps that are not controlled by a central authority and allow
users to connect with digital services in a secure and transparent manner.
As a result, Blockchain wallets are a handy tool for both people and companies
wanting to conduct bitcoin transactions. They have a variety of uses. For online
transactions, investments, remittances, and access to decentralized apps, they
offer a safe and practical means to store, transmit, and receive bitcoins. It is
anticipated that as cryptocurrencies continue to be recognised as a genuine asset
class, the use of Blockchain wallets will rise.

A permissioned blockchain architecture made specifically for business use cases

is called Hyperledger Fabric. It has a flexible, modular architecture that enables
customisation. Smart contracts, which are self-executing contracts that may
automate corporate procedures, are also supported by Fabric.
To implement a blockchain in Java using Hyperledger Fabric, we need to follow
these steps:
1. Set up a development environment: A development environment that
contains the Hyperledger Fabric SDK for Java and the required
dependencies must be set up.
2. Define the network: The network topology, including the nodes,
channels, and smart contracts, must be specified.
3. Develop the smart contracts: Java must be used to create the smart
contracts. The business logic that governs transactions and operates on
the blockchain is known as a smart contract.
4. Build the application: We must create the software that communicates
with the blockchain network. The Hyperledger Fabric SDK for Java may
be used for this.
5. Test and deploy: The application has to be evaluated before being
launched onto the blockchain network.
A collection of APIs offered by Hyperledger Fabric may be used to
communicate with the blockchain network. These APIs include the Chaincode
API, which enables us to create and deploy smart contracts, and the Fabric
Gateway API, which offers a streamlined interface for communicating with the
blockchain network.
Let's look at some of Hyperledger Fabric's important attributes and how they
make it a good option for developing blockchain in Java.
1. Modular architecture: Because of its modular nature, Hyperledger
Fabric is adaptable and customizable. We may select the consensus
method that best fits our use case since it offers a pluggable consensus
mechanism. Private data collectors may be implemented with Fabric,
allowing for the selective sharing of data among network users.
2. Permissioned blockchain: Hyperledger Fabric is a permissioned
blockchain, which means that only authorized parties may participate in
the network. This makes it an excellent solution for corporate use cases
where data privacy and security are critical.
3. Smart contracts: Smart contracts, which are self-executing contracts that
may automate corporate activities, are supported by Hyperledger Fabric.
Smart contracts are written in a programming language, and they may be
written in Java in Fabric. This simplifies the integration of current Java-
based apps onto the blockchain network.
4. Performance and scalability: Hyperledger Fabric is intended to be fast
and scalable. It can handle thousands of transactions per second and can
be horizontally expanded to handle bigger networks.
5. Enterprise-grade security: Identity management, access control, and
encryption are among the enterprise-grade security capabilities provided
by Hyperledger Fabric. This guarantees that the network is safe and
secure.
The Linux Foundation maintains Hyperledger Fabric, an open-source
blockchain platform. It has a huge and active developer and contributor
community, which means it is always changing and improving.
Finally, integrating blockchain in Java with Hyperledger Fabric provides several
advantages for commercial applications. It has a modular architecture, enables
smart contracts, and is built for speed and scalability. We can construct safe and
dependable blockchain apps for a range of use cases by using the strength of
Java and the flexibility of Hyperledger Fabric.
Smart Contracts in Blockchain Technology

The way we understand and handle digital transactions has been revolutionized
by blockchain technology. The possibilities of blockchain technology have been
further improved by the introduction of smart contracts, a self-executing piece
of code. Digital contracts that are effective, transparent, and impenetrable have
entered a new era thanks to smart contracts.
A blockchain-encoded digital contract between two or more parties is known as
a smart contract. The conditions of the agreement between the buyer and seller
are directly encoded into lines of code, making it a self-executing contract. The
contract cannot be changed after it is deployed since both the code and the
agreements it contains are on a decentralized blockchain network.
Smart contracts work by having a set of predetermined circumstances that,
when satisfied, cause the contract's obligations to be automatically carried out.
The time and expenses related to conventional contract administration are
decreased since this automation removes the need for middlemen like attorneys,
banks, or brokers.
The transparency of smart contracts is one of its most important benefits. A
smart contract's execution results in its recording on the blockchain, where it is
accessible to everybody on the network. This openness makes sure that
everyone participating in the deal has the same information at their disposal and
that the provisions of the contract are strictly adhered to.
The potential of smart contracts to automate complicated procedures is another
important benefit. Smart contracts have the ability to be programmed to carry
out a sequence of operations when certain criteria are satisfied. For instance, if a
certain set of circumstances are satisfied, a smart contract may be set up to
automatically transfer money from one party to another.
There are several applications for smart contracts, including supply chain
management, real estate transactions, and digital identity verification. The
banking sector is one area where smart contracts are becoming more and more
popular. Banks and other financial institutions are investigating the use of smart
contracts to automate many of their current procedures, including clearing and
settlement, in order to cut down on time and expenses.
Despite all of its advantages, smart contracts are not without drawbacks. The
absence of standards is one major problem. Since smart contracts are a
relatively new kind of technology, they are not required to go by any particular
set of norms or guidelines. Due to the absence of standardization, it may be
challenging for various blockchains' smart contracts to communicate with one
another.
The potential for bugs or other weaknesses in the code is another difficulty. Any
flaws or weaknesses in the code might have serious repercussions because smart
contracts are self-executing and cannot be changed once they are deployed. To
reduce these risks, developers must make sure that the code is extensively tested
and audited.
Blockchain technology, a distributed ledger that is maintained by a network of
nodes, provides the foundation for smart contracts. Every node has a copy of the
ledger, and any updates are added after being approved by the network. The
blockchain's security and integrity are guaranteed by this verification procedure.
Traditional contract management procedures are significantly impacted by smart
contracts. They do away with the necessity for middlemen, which lowers the
price and time of contract administration. Furthermore, there is no doubt or
misunderstanding regarding the contract's conditions because they are encoded
in the code. This lessens the possibility of disagreements and legal conflicts.
Smart contracts may also be used to carry out intricate corporate procedures. A
smart contract, for instance, may automate the tracking of items from the
manufacturer to the customer in supply chain management. The smart contract
updates the ledger each time the products are exchanged, guaranteeing that
everyone in the supply chain has access to the same data.
Digital identity verification may also be accomplished with smart contracts. The
blockchain may be used to store a person's identifying data in a smart contract.
Anyone on the network may then access and verify this information. As a result,
there is no longer a need for centralized identity verification agencies, and the
likelihood of identity fraud is decreased.
Decentralized finance (DeFi) is another area where smart contracts may be used.
DeFi is a term used to describe financial apps created using blockchain
technology. Automating financial procedures like lending, borrowing, and
trading is possible using smart contracts.
A smart contract may be used to carry out a loan arrangement between two
parties, for instance. The code contains the conditions of the loan arrangement,
such as the interest rate and payback timeline. The smart contract automatically
distributes the money to the lender once the borrower pays back the loan.
To summarize, smart contracts are a powerful and transnational technology that
has the ability to revolutionize the way we handle contracts and carry out
business procedures. Their efficiency, transparency, and automation make them
a popular choice in a variety of businesses. While there are certain hurdles to
overcome, such as standardization and code vulnerabilities, the advantages of
smart contracts are considerable and have the potential to revolutionize the way
we do business for the better.
What Is a Blockchain?
The term "blockchain" refers to a digital transaction ledger maintained by a
network of computers in a way that makes it difficult to tamper with or modify
the data. By eliminating the middleman or other third party, the technology
provides a safe way for people to transact with one another.
Cryptography is employed to connect a collection of records known as blocks.
Every transaction is independently validated via peer-to-peer computer
networks, time-stamped, and added to the ledger; the information that has been
recorded can't be changed easily.
Blockchains are well recognized for playing a key role in cryptocurrency
systems like Bitcoin in keeping a secured and decentralized history of
transactions. In contrast to databases, which typically organize information/data
into tables, a blockchain, as the name suggests, organizes data into
chunks/blocks that are linked together.
How does Blockchain work?
Transaction Process
(i) Facilitating a Transaction
A new transaction has been requested for the blockchain network, where all data
that requires to be transferred is double encrypted by the use of public and
private keys.
(ii) Transaction Verification
After that, the transaction is sent through the global network of peer-to-peer
computers, where all of the network's nodes will verify the transaction's
legitimacy, including if there is enough balance available to complete the
transaction.
(iii) New Block Formation
The blockchain network has multiple nodes, and numerous transactions are
confirmed simultaneously. A block is made up of several mempools, each of
which contains all the validated transactions at a specific node, and the
transaction will be included in the mempool after it has been reviewed and
confirmed as valid.
(iv) Consensus Algorithm
The nodes that create a block will attempt to add it to the network in order to
make it permanent; however, if every node is permitted to add blocks in this
way, the blockchain network's functionality will be disrupted. In order to
address this issue, the nodes employ a consensus method to make sure that each
new block added to the chain represents the single version of the information
validated by all the nodes and that only a legitimate block is safely linked to the
chain; a hash code for that block is generated by the consensus method and is
necessary for adding the block to the chain.
(v) New Block Addition
The newly formed block is now set to be added to the chain after receiving its
hash value and being validated; a blockchain is made up of blocks that are
cryptographically connected to one another by the hash value of the preceding
block, which is included in each block and the open end of the blockchain
receives a new block.
(vi) Completion of Transaction
The transaction is finished as soon as the block is added to the chain, and the
data is then recorded there permanently; the transaction's information can be
accessed and verified by anybody.
Attributes of Blockchain
Though blockchains are typically used to keep the history of cryptocurrency
transactions, they also have the potential to store other data, such as digital
assets or product inventories.
o It has intrinsic value since it offers a reliable, safe, and quick means of
transferring value with minimal to no cost.
o It has no physical form since it only exists on the immutable blockchain.
o The majority of the participants in a cryptocurrency's decentralized
network, rather than a single centralized authority, make the decision
based on a cryptocurrency's attributes, like its total supply.
Features of Blockchain
Below mentioned are some of the primary features of the Blockchain:
Immutable
The blockchain is considered immutable as it can't be altered or modified. It is
therefore said to be a permanent network.
o Blockchain technology works by utilizing a network of nodes; every
network node has a copy of the digital ledger, and it assesses a transaction
prior to adding it to the network.
o If the majority of the nodes accept that it is authentic, the transaction is
added. It implies that no transaction blocks can be added to the ledger
without obtaining the approval of the majority of nodes.
o Any records/data that have been verified can't be changed or reversed;
this indicates that they cannot be edited, changed, or deleted by any user
on the network.

Decentralized
The blockchain network is decentralized, indicating that not only one entity will
be in charge of making all of the choices. Instead, a group of nodes creates and
maintains the network, and each node has an identical copy of the ledger. The
blockchain network's decentralization feature offers several benefits:
o A blockchain network is completely structured and fault-tolerant because
it doesn't rely on human computations.
o It makes it less vulnerable to failure due to its decentralized nature.
o There is no involvement/interference of a third party or middlemen;
therefore, there is no additional risk associated.
o It makes it simpler to create a transparent profile for every network user;
as a result, each change is traceable and more concrete.
o Users can have control over their properties and do not need to depend on
third-party to maintain and administer them.
Secure
Each record on the blockchain is individually encrypted, further enhancing the
security of the network's process. As there is no centralized authority, it isn't
possible to simply add, modify, or remove data from the network.
All the information on the chain is hashed using cryptography, providing each
one a unique identity on the network. Any attempt to modify the information
would necessitate modifying every hash ID, which is simply not possible. Each
block contains its own special hash and the previous block's hash. The blocks
are "cryptographically" connected together due to this feature.
Consensus
Consensus is a method of making decisions that allow a group of network nodes
to reach an agreement swiftly and effectively, ensuring the system's smooth
functioning. Every blockchain has a consensus system that enables the network
to make decisions quickly and unbiasedly. Even though nodes may not have
much trust in one another, they might have trust in the network's central
algorithm. A consensus algorithm is required for any blockchain, or it will lose
value. There are numerous available consensus algorithms, each having
advantages and disadvantages.

Before records are approved into the network, all the participants must concur
that they are legitimate. A node should receive the consent of the majority in
order to add a block to the network, or else, the block can't be added. It is not
possible for a node to simply insert, alter, or erase data from the network. Every
record is updated at once, spreading quickly across the network. Thus, no
modifications can be performed until a majority of the network's nodes consent
to them.
Benefits of Blockchain
The below mentioned are some of the blockchain benefits:
o One of the primary benefits of blockchains is that it is open to all; this
implies that anybody can contribute to this technology, and joining the
distributed network doesn't need permission from anyone.
o Blockchain can be used to record data in a decentralized way so that
anyone may check the accuracy of the data by employing zero-knowledge
 proof, wherein one party verifies the accuracy of information to another
party while not revealing anything regarding the information.
o Since blockchain is a decentralized system with a large number of trusted
nodes, data/information recorded using it is permanent. This implies that
one doesn't need to be concerned about losing their data since duplicate
copies are maintained at every local node.
o Because it is not controlled by a single party, blockchain is regarded as
censorship-free. Furthermore, it uses the concept of trusted nodes for
verification and consensus algorithms that validate transactions using
smart contracts.
o Since every transaction is stored on a block linked to the others using
hashing methods, blockchain provides a higher level of security.
o Due to the decentralized nature of blockchain, it is difficult to alter data;
if any alterations are done, it is immediately reflected throughout all
nodes, making theft impossible. Therefore, it can be said that transactions
are impervious to tampering.
o It makes transaction records visible everywhere since every node in the
network has a copy of every transaction, and if there are any
modifications made to the transaction, the other nodes can see it.
o Blockchain eliminates any third-party interference in transactions and
eliminates errors, making the system more effective and quick. Also,
settlement is facilitated and made easy this way.
o Blockchain lowers costs for businesses and builds trust with other
partners because it doesn't require a third party.
Applications of Blockchain
Blockchain technology has a wide range of uses in various categories/ fields,
some of which are mentioned below:
Healthcare
With smart contracts, blockchain can have a significant effect on the healthcare
industry. A contract between two parties can be established through smart
contracts without the necessity of a middleman, and the contract's terms are
known to all parties, and when its criteria are satisfied, it is immediately put into
effect. This could be highly helpful in the healthcare industry since it allows for
the encryption of personal health records using Blockchain technology, making
them only accessible to primary healthcare practitioners with a key.
Internet of Things
IoT is a system of interconnected devices that can communicate with one
another and gather information that may be utilized to obtain valuable insights.
The Smart Home, in which all home appliances like lights, air conditioners,
speakers, etc., may be linked together on a single platform, could be one of the
examples of IoT. Blockchain technology can be utilized to secure this
enormously dispersed system; the security of an IoT system can only be as
strong as finding the weakest link. In this case, blockchain can be used to make
sure that the information collected by IoT devices is secure and accessible to
only the right/trusted people.
Food and Medical Industry
Companies may trace their food items/products using blockchain technology
from the time they are harvested or manufactured until the point at which they
are received by consumers. Blockchain technology could aid in the creation of a
digital certificate for every food product, indicating where it originated from
and where it has been. As a result, if any contamination is found and the
manufacturer decides to return a batch of product due to particular quality
concerns, they may track the problem back to its source. A mechanism like this
might be used in other sectors too. It could be used to track pharmaceuticals and
other common products, as well as to combat counterfeit products by allowing
anybody to check to see if the item is from a genuine and authentic
manufacturer.
Logistics and Supply Chain Tracking
There are numerous advantages to employing blockchain technology to track
products as they move through a logistics or supply chain network.
Firstly, it enables easier communication among parties since information is
available on a secure public ledger. It also offers increased security and data
integrity due to the immutability of the information on the blockchain. As a
result, participants in the logistics and supply chain can collaborate more readily
and with more assurance that the information being sent to them is relevant and
updated.
Non-Fungible Tokens
NFTs are generally regarded as a means of acquiring ownership of digital art.
Due to the blockchain's precluding against information existing in two places,
posting an NFT on it assures that there is only a single copy of digital artwork.
While NFTs have many applications, at their base, they are a method of
transferring ownership over anything that may be represented by data.

Different Types of Blockchain

Now that we have established a good understanding of the need for blockchain
technology types. It is now time for us to learn about them.
At a glance, there are four different major types of blockchain technologies.
They include the following.
 Public
 Private
 Hybrid
 Federated
Public Blockchain
A public blockchain is one of the different types of blockchain technology. A
public blockchain is the permission-less distributed ledger technology where
anyone can join and do transactions. It is a non-restrictive version where each
peer has a copy of the ledger. This also means that anyone can access the public
blockchain if they have an internet connection.
One of the first public blockchains that were released to the public was the
bitcoin public blockchain. It enabled anyone connected to the internet to do
transactions in a decentralized manner.
The verification of the transactions is done through consensus methods such
as Proof-of-Work(PoW), Proof-of-Stake(PoS), and so on. At the cores, the
participating nodes require to do the heavy-lifting, including validating
transactions to make the public blockchain work. If a public blockchain doesn’t
have the required peers participating in solving transactions, then it will become
non-functional. There are also different types of blockchain platforms that use
these various types of blockchain as the base of their project. However, each
platform introduces more features in its platform aside from the usual ones.
Examples of public blockchain: Bitcoin, Ethereum, Litecoin, NEO
What Are the Advantages?
Public blockchains are good at what they do. Its advantages include the
following.
 Anyone can join the public blockchain.
 It brings trust among the whole community of users
 Everyone feels incentivized to work towards the betterment of the public
network
 Public blockchain requires no intermediaries to work.
 Public blockchains are also secure depending on the number of
participating nodes
 It brings transparency to the whole network as the available data is
available for verification purposes.
What Are the Disadvantages?
Public blockchain does suffer from disadvantages. They are as follows:
They suffer from a lack of transaction speed. It can take a few minutes to hours
before a transaction is completed. For instance, bitcoin can only manage seven
transactions per second compared to 24,000 transactions per second done by
VISA. This is because it takes time to solve the mathematical problems and then
complete the transaction.
Another problem with public blockchain is scalability. They simply cannot scale
due to how they work. The more nodes join, the clumsier, and slow the network
becomes. There are steps taken to solve the problem. For example, Bitcoin is
working on lighting the network, which takes transactions off-chain to make the
main bitcoin network faster and more scalable.
The last disadvantage of a public blockchain is the consensus method
choice. Bitcoin, for example, uses Proof-of-Work (PoW), which consumes a lot
of energy. However, this has been partially solved by using more efficient
algorithms such as Proof-of-Stake (PoS).
What Are the Use Cases?
There are multiple use-cases of the public blockchain. To get a better idea, let’s
list some of them below.
 Voting: Governments can do voting through public blockchain
employing transparency and trust.
 Fundraising: Companies or initiatives can make use of the public
blockchain for improving transparency and trust.
Private Blockchain
A private blockchain is one of the different types of blockchain technology. A
private blockchain can be best defined as the blockchain that works in a
restrictive environment, i.e., a closed network. It is also a permissioned
blockchain that is under the control of an entity.
Private blockchains are amazing for using at a privately-held company or
organization that wants to use it for internal use-cases. By doing so, you can use
the blockchain effectively and allow only selected participants to access the
blockchain network. The organization can also set different parameters to the
network, including accessibility, authorization, and so on!
So, how is it different from a public blockchain? It is different in the way it is
accessed. Otherwise, it offers the same set of features as that of the public
blockchain, providing transparency, trust, and security to the selected
participants.
Another major difference is that it’s kind of centralized as only one authority
looks over the network. So, it doesn’t have a decentralized theoretical nature.
There are also various types of blockchain platforms that use private blockchain
as the base of their platform. More so, each one of them tends to be unique and
offer different features.
In many cases, a private blockchain is considered permissioned blockchain. But
the concept of permissioned blockchain is much broader as it can include public
blockchain as well.
Examples of Private blockchain: Multichain, Hyperledger
Fabric, Hyperledger Sawtooth, Corda
What Are the Advantages?
Private blockchains are fast. This is because there are few participants compared
to the public blockchain. In short, it takes less time for the network to reach
consensus resulting in faster transactions.
Private blockchains are more scalable. The scalability is possible because, in a
private blockchain, only a few nodes are authorized to validate transactions.
This means it doesn’t matter if the network grows; the private blockchain will
work at its previous speed and efficiency. The key here is the centralization
aspect of decision making.
What Are the Disadvantages?
Private blockchains are not truly decentralized. This is one of the biggest
disadvantages of private blockchain and goes against the core philosophy
of distributed ledger technology or blockchain in general.
Achieving trust within the private blockchain is tough because the centralized
nodes make the last call.
Lastly, as there are only a few nodes here, the security isn’t all that good. It is
important to understand that it is possible to lose security if a certain number of
nodes go rogue and compromise the consensus method utilized by the private
network.
What Are the Use Cases?
There are multiple private blockchain’s use-cases. Some of them are listed
below.
 Supply chain management: Organizations can deploy a private
blockchain to manage their supply chain.
 Asset ownership: Assets can be tracked and verified using a private
blockchain.
 Internal Voting: Private blockchain is also effective at internal voting.
Consortium Blockchain
A consortium blockchain is one of the different types of blockchain technology.
A consortium blockchain (also known as Federated blockchains) is a creative
approach to solving organizations’ needs where there is a need for both public
and private blockchain features. In a consortium blockchain, some aspects of
the organizations are made public, while others remain private.
The consensus procedures in a consortium blockchain are controlled by the
preset nodes. More so, even though it’s not open to mass people, it still holds a
decentralized nature. How? Well, a consortium blockchain is managed by more
than one organization. So, there is no one single force of centralized outcome
here.
To ensure proper functionality, the consortium has a validator node that can do
two functions, validate transactions, and also initiate or receive transactions. In
comparison, the member node can receive or initiate transactions.
In short, it offers all the features of a private blockchain, including transparency,
privacy, and efficiency, without one party having consolidating power.
Examples of Consortium Blockchain: Marco Polo, Energy Web Foundation,
IBM Food Trust.
What Are the Advantages?
 It offers better customizability and control over resources.
 Consortium blockchains are more secure and have better scalability.
 It is also more efficient compared to public blockchain networks.
 Works with well-defined governance structures.
 It offers access controls.
What Are the Disadvantages?
 Even though it is secure, the whole network can be compromised due to
the member’s integrity.
 It is less transparent.
 Regulations and censorship can have a huge impact on network
functionality.
 It is also less anonymous compared to other types of blockchain.
What Are the Use Cases?
There are multiple use-cases of consortium blockchain. Some of them include
the following
 Banking and payments: A group of banks can work together and create
a consortium. They can decide the nodes that will validate transactions.
 Research: A consortium blockchain can be used to share research data
and results.
 Food tracking: It is also great for food tracking.
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Fundamentals
Hybrid Blockchain
Hybrid blockchain is one of the different types of blockchain technology. More
so, Hybrid blockchain is the last type of blockchain that we are going to discuss
here. More so, hybrid blockchain might sound like a consortium blockchain, but
it is not. However, there can be some similarities between them.
Hybrid blockchain is best defined as a combination of a private and public
blockchain. It has use-cases in an organization that neither wants to deploy a
private blockchain nor public blockchain and simply wants to deploy both
worlds’ best.
Example of Hybrid Blockchain: Dragonchain, XinFin’s Hybrid blockchain
What Are the Advantages?
 Works in a closed ecosystem without the need to make everything public.
 Rules can be changed according to the needs.
  Hybrid networks are also immune to 51% attacks.
 It offers privacy while still connected with a public network.
 It offers good scalability compared to the public network.
What Are the Disadvantages?
 Not completely transparent.
 Upgrading to the hybrid blockchain can be a challenge.
 There is no incentive for participating and contributing to the network.
What Are the Use Cases?
Some of the best use-cases of the Hybrid blockchain are as follows:
 Real estate: You can use hybrid networks for real-estate purposes where
real-estate companies can use it to run their systems and use the public to
show information to the public.
 Retail: Retail can also use the hybrid network to streamline their
processes.
 Highly regulated markets: Hybrid blockchains are also ideal for highly
regulated markets such as financial markets.
Which Blockchain Type Should You Choose?
Each blockchain has something unique to offer. That’s why there is not a simple
answer to what type of blockchain you should choose.
However, to make sure that you make the right choice, let’s go through each one
of them and understand what they have to offer.
Public Blockchain Network
As you already know, anyone can join public blockchains, and the information
is available to everyone as well. This makes them ideal for organizations that
thrive on trust and transparency. This means that NGOs or social support groups
can make the most out of the public-based blockchain.
Its public nature also means that it cannot be used for businesses in the private
sector. The reason behind it is that they need to keep their data private. Also,
public blockchains can be expensive to manage as it requires nodes to act as a
miner and run either Proof-of-Work(PoW) and Proof-of-Stack(PoS).
So, if you are a person who wants to introduce a new global cryptocurrency,
then this might be for you! If you want everything public, Jokes apart, then it is
wise to create a public blockchain network.
Private Blockchain Network
The private blockchain is the opposite of the public blockchain as it offers a
private network. It is best for businesses that want a private network but wants
to get the benefits of blockchain. They are also centralized in nature, which
means that a company can control the network without keeping it open to the
public.
They offer all the key features of blockchain and give members of the company
a way to build trust through immutability and security.
In private networks, the company can also set rules and manage the network
according to their requirements.
Consortium Blockchain Network
Next, we have a consortium blockchain network that is controlled by a set of
organizations or nodes rather than a centralized node or a decentralized network.
A consortium blockchain is good because it comes with pre-selected nodes.
It is ideal for a solution that requires collaboration across the board. For
instance, supply chain, food, medicine — all of these would require
collaboration across brands.
Hybrid Blockchain Network
Finally, we have the last blockchain technology types – Hybrid blockchain. If
you are looking to get all the advantages of both private and public blockchain
with minimal disadvantage, you should go for this blockchain.
In reality, hybrid blockchain does come with disadvantages like other
blockchain technology types. However, they are quite minimal.
It seems that hybrid blockchains may just be perfect for a lot of upcoming
business models. So, choose well.