Cross-chain interoperability is like building bridges in a world of islands. It's about connecting, sharing, and growing together. The blockchain universe is expanding, and with these bridges, we're headed towards a more interconnected and exciting future!
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Every day millions of people plunge into the crypto-currency space with little or no knowledge about the technology behind it, imagine your friend won a free first class Emirates Boeing 777 aircraft ticket for an 8hours flight only for him to request for coffee throughout the flight denying himself all the expensive luxurious benefits attach to the ticket (as a result of his ignorance). This scenario can be applied to you if your understanding of Blockchain is limited to crypto-currency alone.
In this post I compiled a list of Blockchain component, starting from
I believe this will give you a luminous insight into the potential of this disruptive technology.
The Blockchain is an open distributed public ledger that register transaction between two people efficiently and also in a secured verifiable and permanent way.
Just as the name implies every block hold volumes of valid transactions by the people which are hashed and conceal to code into a hash tree. Each block includes the cryptographic hash of the previous block connecting the two, these connected blocks form a chain, the repetition of this process confirms the integrity and incorruptibility of prior block all the way back to the first block.
For some Blockchain like Ethereum, it takes 15seconds to create a new block while for bitcoin it takes 10 minutes, this is practically when a transaction takes place, so a short block time means a fast transaction.
In a better explanation a block is a record of a new transaction, storage of data (that could either be medical data, financial transaction, voting record, or bookkeeping) once a block is completed it is added to a chain and create a new block and repeat the same process.
Blockchain allows two people irrespective of their location to connect directly without the need of a third party.
It can also be referred to as the most trusted middleman.
Indissentient to the global illusion that Blockchain was invented alongsideBitcoin in 2008 is nothing but a fallacy. The genesis of Blockchain can be traced back to 1991 when two friend’s W Scott Stornetta and Stuart Haber came together to create a system where documents timestamps could not be manipulated or backdated.
In 1992 Stornetta, and Haber imbibe harsh tree to the design, this enhance adaptably and efficiency by allowing several documents to be collected into one block.
In 2008 the first Blockchain was conceptualized by Satoshi Nakamoto a preternaturally talented computer coder from Japan, who has kept his identity unknown which makes people assume he is a group of people while others assume he is just an individual.
Satoshi Nakamoto claimed that work on the writing of the code began in 2007, he knew that due to its nature the core design would have to be able to support a broad range of transaction types.
The implemented solution enabled specialized codes and data fields from the start through the use of a predictive script.
For more details on what is Bitcoin and the history of smart contract, you can check out our next post.
When we talk about Blockchain a lot of people can only relate to Bitcoin Blockchain because Bitcoin was the first project on Blockchain. After the popularity of Bitcoin, the public, government & organizations started paying attention to the underlining technology behind it.
At the moment there are three type of Blockchain which is listed below:
1) PUBLIC BLOCKCHAIN
2) PRIVATE BLOCKCHAIN
3) CONSORTIUM OR FEDERATED BLOCKCHAIN
I would like to note that there are also other types of Blockchain public-permission Blockchain, private-permission Blockchain but we will focus on the 3 main type.
Just like its name public it simply means that it is controlled by the public/people, designed for the public/people and created by the public/people.
There is nobody in charge, anybody with an active internet connection can become a validator and can also make transactions irrespective of their location. It is completely open with no access restrictions or limitation. Transactions are transparent, it also comes with anonymity & pseudonymous. It uses the proof of work (POW) and proof of stake (POS) mechanism to regulate public exposure.
Examples include Bitcoin, Ethereum, Monero, Dash, Litecoin, Dodgecoin etc.
Effects include:
1) It can disrupt the current business models through disintermediation.
2) No infrastructure implication: There is absolutely no need to maintain servers or to maintain system admins reduces the costs of running and creating decentralized applications (dApps).
Just like it name private it simply means that it is owned and controlled by an individual or an organization. Contrary to the public Blockchain, private Blockchain is centralized which implies that various rights are exercised and vested in a central trusted party which claim it is cryptographical secured from the individual or organization point of view and more cost-effective for them.
This puts you at the risk of security breaches due to its centralized system by running the risk of exposing sensitive data to the public internet as opposed to the public Blockchain secured by game theoretic incentive mechanisms.
Examples include: Monax, Muhichain, Bankchain
Effects include:
1) It reduces cost but not disruptive
2) Reduces transaction cost and data redundancies and replaces legacy systems, simplifying document handing and getting rid of semi-manual compliance mechanisms.
Just like its name consortium, it simply means that there is no one in charge but instead we have more than one group of companies or representative individuals in charge this implies that we have a group of companies collaborating together and making decisions for the best benefit of the whole network. This type of Blockchain is often referred to as semi-decentralized. It removes the sole autonomy which gets vested in just one entity by using private Blockchain.
Consortium or federated Blockchain is faster (higher scalability) and provide more transaction privacy. This Blockchain is mostly used in the banking sector, as opposed to public Blockchain they don’t allow any person with access to the internet to participate in the process of verifying transactions. The consensus process is controlled by a pre-selected set of nodes.
For examples, one might imagine a consortium of 15 financial institutions each of which operates a node and of which 10 must sign every block in order for the block to be valid.
Examples include R3 (Bank), Ewf (Energy), B3i (Insurance), Corda.
Effects include:
1) It reduces cost but not disruptive
2) Reduces transaction cost and data redundancies and replace legacy systems, simplifying document handling and getting rid of semi-manual compliance mechanisms
NOTE: There have been a lot of debate on if it should be called a Blockchain due to its private model because it fundamentally defeats the whole purpose of Blockchain that Bitcoin introduced to us, as we know that Blockchain is still in its early stages, it is still unclear on how the technology will pan out and will be adopted. A lot of people argue that private and consortium or federated Blockchain might suffer the fate of intranets in the 1990’s when private companies built their own private LANs or WANs instead of using the public internet and all the services but intranet has more or less become obsolete especially with the advent of SAAS in the web2.
However private and consortium Blockchain has their use case especially when it comes to scalability and state compliance of data privacy rules and other regulatory issues.
A
lot of people have made several attempts in classifying Blockchain, but there
is no general consensus on how to accurately distinguish between these types of
Blockchains, below is a classification chart.
One way to distinguish is between public and private, or permission and permission less sometimes these terms are used synonymously, but they refer to different things.
It is easy to ask why do we need more than one type of Blockchain which has led to global misconception on Blockchain, in other to avoid conflict of opinion, thought, ideas and perspective we need to understand that we encountering a different problem in different areas in our society and in other to combat these problems
We require more types of Blockchain because keeping such Blockchains solves problems such as: –
Because of all these, I think different types of Blockchain will be used for different type of industries as and when required.
Where we require privacy and control, private & consortium Blockchain will be a good option and where we require openness, as well as censorship resistance public Blockchains, are a must need.
And that’s why different people are discussing different use cases of the Blockchain tech across various industry verticals.
Nevertheless, time will only tell how far each type of these Blockchains go and who will be the winner.
I believe this post has given you a wide understanding of the beauty of this disruptive technology, looking at the evolution of technology since 3 decades from microprocessors to mobile communication to the internet, it is obvious that with Blockchain we have an incredible opportunity to create real economic change and freedom in the world.
Satoshi Nakamoto through his invention of bitcoin has woken us up to a world whereby digital currency could be traded without the need for a third-party through a distributed ledger system which is similar to the way internet fundamentally changed the way we share information.
With Blockchain we have an open platform for innovation which is going to revolutionize the way we transact as individuals, business and governments including machines too and adding radical transparency to the public sector and the way we run affairs.
I believe we need to take this technology serious just like the way we took the internet serious in the 90’s.
I would like to hear your opinion on Blockchain and I would like to know if this post has helped you in any way and on how we can help you understand better. Remember to subscribe and drop a comment below.
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