BlockChain: A Brief To Start With
Blockchain is a shared, distributed ledger that facilitates the process of recording transactions and tracking assets in a business network. Blockchain, moving off from the earlier manner of recording and verifying transactions at each distinct checkpoint in a chain of the business line, is a mechanism of dealing with the process of transaction-recording by maintaining it in a chain of events and records instead of storing them as the bulk of data and operating different functionality as per need. Each of the transactions can be traced back to its origin.
How It’s Done Today?
The exchange of valuable goods and services has always been the mainstream of any developing economy. Right through the beginning of a business transaction, an authoritative body has been the central controlling manager, facilitating the transaction in easing the flow, maintaining security, and enabling the convenience of all the parties involved in any single transaction. And as the chain grows larger, the need for the “Managing Body” emerges, liable to maintain the flow without any inconsistency and contrariety.
Lately, after the dawn of Internet when this earlier style of transaction recording adapted the assistance of the internet, it flooded on like a boom to the industries, however, due to the swelling size of transactions, data and efforts of maintainability and security lead to increase in complexity, errors, and risks.
Due to the long chains of transactions with multiple authentications checkpoints through its course of completion, it came up with several major issues that every business party had to deal with. Some of them, having an extensive impact over the business cycle are mentioned down here:
- The delays in transaction completion/cancellation settlements.
- Duplication of effort while third-party verification.
- After the involvement of digital platforms into its cyber-attacks, fraud, forgery became a crucial risk factor.
- A single central system for all recording requires the highest level and updates of security structure, which generally increases the cost overall.
- Population with no bank accounts or lesser inconvenient access to the digital transaction mediums are still stuck into a comparatively slower and thwarting process of making a transaction.
How Blockchain Suggests It, To Be Like?
Well for recording every transaction, the fundamental scenario of a transaction to occur would first have to be in this similar manner. An event of the transaction in real-time, a ledger, and the permission with the valid proofs supporting the transaction. Now, this whole set of events may get replicated for one single transaction but on distinct end-parties.
And this many times of replication leads to inefficiency, conflicts, delays, and high cost. Hence, considering the major requirement of recording a transaction that blockchain suggests is the amalgamation of all the factors required for efficient recording and putting it into an architecture that effectively supports the flow.
The key aspects of the architecture are that it holds a chained structure of a series of transactions, where one single transaction at any moment in the system, can be traced back to its origin. All the users of the system can act as a publisher or even a subscriber of transactions dependent on their exercisable rights.
Hence, a transaction originated from its source when it is initiated, has to go through the algorithmic approvals of the other relevant parties or their commonly approved algorithms. Complying rules and agreements to be followed, for any transaction of a specific nature to be completed. And ultimately it has to be then forwarded to a shared ledger of records. This shared ledger can be accessed by permission blockchain users to view the details of any transaction in the chain. The considerably notable parts of the overall functioning are the algorithmic approvals, technically termed as “Digital Signatures” for users and “Smart Contracts” for the transactions.
How Blockchain Gets It Done?
From its name, you may guess the prime functional structure of the blockchain. Under blockchain, the transactional details are stored along with its time and sequence confirmation, thus called a block of transaction detail. Each block would contain a hash(a unique identifier), time-stamped batches of recent valid transactions, and the hash of its previous block.
The hash links help to preserve the integrity of the chain, and the architecture is developed in such a manner that no block can be altered as every block can get generated through only a permission user and under the compliance of the smart contracts. Alongside there is no possibility of removing any block, once generated. It can only be canceled by another new transaction in its reference.
The four fundamental components of blockchain architecture are:
- Shared Ledger: Acts as a single source of truth for any transaction occurred in the business. No transaction, once recorded, can be removed or replaced. Only another transaction can be recorded in the chain to nullify the previous effect, only if and when required. It is shared among all users, with a replicated copy for each. A ledger will be permissioned so that only a network node can see those transactions and their details which they are authorized to view.
- Permissions: Through the use of Digital Signatures, it is implemented into the blockchain that a user can view the details of a transaction based on the authorization level it is issued with.
- Consensus: With it, comes a quite unusual method of authenticating a transaction within a network, It is prominent, as it is one process which eradicates the need of central authority or any authenticating body at any given transactional environment. In a business network, the partners are already trusted and known to business. Transactions between them in real-time are authenticated through various time-consuming and repetitive means of paper works and official procedures. They can be verified through various developed means like:
Proof of stake: A validator must hold a certain percentage of the network’s total value.
Multi-Signature: A majority of validators must agree to the transaction’s validation.
Practical Byzantine Fault Tolerance: An algorithm designed to settle disputes among computing nodes, when one node in a set of nodes generates different output from others in a set. A consensus mechanism would highly be dependent upon the size, nature and scalability scope of the network.
- Smart Contracts: The general contractual agreements are tried to enforce in such a way where they will be primarily stored, supporting the flow and compliance compatibility of a transaction and then can be partially or fully executed automatically alongside the transaction resulting in time-cost effectiveness.
Now, Where To Start With?
Hyperledger, a Linux Foundation project, is an open-source community to help advance technology and thought leadership. It is deemed an “umbrella” for developer communities building an open-source blockchain and related technologies. Hyperledger was announced and formally named in December 2015 by 17 companies in a collaborative effort created to advance blockchain technology for cross-industry use in business. Now with over 130 members across the world, it is the fastest-growing project in Linux Foundation history.
Hyperledger Fabric is a blockchain framework implementation and one of the Hyperledger projects hosted by The Linux Foundation with a modular architecture and pluggable, interchangeable services using container technology.
Hyperledger Fabric provides a framework for developing blockchain solutions with a modular architecture, pluggable implementations, and container technology. While leveraging open-source best practices, Hyperledger Fabric enables confidentiality, scalability, and security in business environments.
Unlike other blockchain implementations like Bitcoin or Ethereum, Hyperledger Fabric fulfills all four key elements of a blockchain for business:
- Permission network: Collectively defined membership and access rights within your business network.
- Confidential transactions: Gives businesses the flexibility and security to make transactions visible to select parties with the correct encryption keys.
- Doesn’t rely on cryptocurrencies: Doesn’t require mining and expensive computations to assure transactions.
- Programmable: Leverages the embedded logic in smart contracts to automate business processes across your network.
IBM is a founding member of Hyperledger and has donated 44k lines of blockchain code under what was originally Hyperledger Fabric.
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- Some useful links for the developers in making?
- http://hyperledger.org (Hyperledger Rocket Chat Channel, to join the growing community of 5,000+ developers already building with Hyperledger technologies.)
- *All the source links for the images are attached to them.
- *Content Source: IBM Limited Edition, Blockchain for Dummies By Manav Gupta (e-Book)