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Everything You Want to Know About Blockchain Technology

Tech News - What is Blockchain Technology, How It Works, What Is The Main Purpose

Cryptocurrency, sometimes called crypto, is any form of currency that exists digitally on computers and uses cryptography to secure transactions. It is a digital currency in which transactions are verified and records are maintained by a decentralized system, rather than by a centralized authority. This digital information, which details the owner of every coin and the transactions they have made, is stored in a special kind of database called a Blockchain. When you buy a cryptocurrency coin, your account on the blockchain (commonly referred to as a wallet) will show a transfer into it and will update your balance accordingly. Your bank might go offline because a freak storm cuts power to its data center, or a hacker shuts down its systems. A blockchain is stored on thousands of computers across the world, all connected by the internet, making it extremely resistant to failure.  Blockchain was initially used to manage cryptocurrency, but it has since received a lot of attention for its potential to completely transform other industries. Other than just serving as the fuel behind Bitcoin, blockchain has a wide range of other possible applications. With its ability to create more transparency and fairness while also saving businesses time and money, the technology is impacting a variety of sectors in ways that range from how contracts are enforced to making government work more efficiently. The list below outlines some of its emerging applications across finance, business, government, and other industries. 

• Internet of Things (IoT)
• Smart contracts
• Money transfer
• Healthcare
• Logistics
• Non-fungible tokens (NFTs)
• Personal identity security
• Government
• Media

Blockchain History

In the mid-1960s, a paper was released that became the foundational concept of the internet. The main issue addressed in that paper was that if there was a Soviet missile attack on the US computing installations, which were centralized at the time, then all of the computers in the US would be wiped out. So, a new door of research was opened to explore the idea of decentralized and distributed data computing. In the event of an attack, only part of the network would go down, and the whole network would survive due to distributed computing. This is a foundational idea for the Internet, and it is also foundational for the blockchain. So, the blockchain database is one that is distributed.

Just like the internet, blockchain is a technology. There are a lot of misconceptions about blockchain technology. One major misconception is that blockchain technology was invented in 2008 by Satoshi Nakamoto, the founder of Bitcoin. That is false. The blockchain idea was coined in 1991 by Stuart Haber and W. Scott Stornetta. Their first work involved working on a cryptographically secured chain of blocks, whereby no one could tamper with the timestamps of documents. In 1992, they upgraded their system to incorporate Merkle trees that enhanced efficiency, thereby enabling the collection of more documents on a single block. However, it was in 2008 that Blockchain History started to gain relevance; credit goes to Satoshi Nakamoto, who used this technology for bitcoin.

Blockchain vs. Regular Database

A misperception about blockchain is that it is just about cryptocurrency. That is not the case. A blockchain is fundamentally a database. It's got some features that distinguish it from the regular database and one distinguishing feature is that it's a distributed database. It is an open ledger that offers decentralization to the parties. In addition, it also offers transparency, immutability, and security. It has many features, including being open, distributed ledger, P2P, and permanent. It is true that there are other databases that are distributed, and the most common is having a backup location where you've got an identical mirror of that database. Blockchain is not just defined as having distributed data. There are a number of other features as well. On top of this list is transparency. In a public blockchain, you can see everything. Everybody in the network has a copy of the database on their computers, and they can all see what's actually going on in the blockchain. The second feature is unique to blockchain technology, and this is the idea of immutability. In a blockchain-based database, you can add data to it, but you can't go back and perform edit or delete operations, as you do with most databases, where you can change historical information at any time. There is no way to do such things on blockchain. Here, the idea of immutability is fundamental. If there's a mistake in the data, then you can add another transaction to correct the mistake, but the mistake lives on forever within this construct. Another fundamental property of blockchain is cryptographic security, which makes it virtually impossible for information entered onto a blockchain to be falsified and, as a result, makes the decentralized database very secure.

Public vs. Private Blockchain

There are different uses for blockchain technology, and therefore, there are different types of blockchain. Blockchain is broadly classified into two types: public blockchain and private blockchain.

The public blockchain network is permissionless in nature and allows anyone to join. It is an open network that is not controlled by anyone. Public blockchains allow all nodes of the blockchain to have equal rights to access the blockchain, create new blocks of data, and validate blocks of data. Bitcoin, Ethereum, and Litecoin are examples of public blockchains.

The private blockchain is a permissioned one, and there is a central authority that manages who can use the network. The central authority also does not necessarily grant each node equal rights to perform functions. Private blockchains are only partially decentralized because public access to these blockchains is restricted. Some examples of private blockchains are business-to-business virtual currency exchange networks, such as Ripple and Hyperledger.

Here’s a comparison of the two:

Blockchain Technology Features

• Blockchain is much faster than the traditionally manual process of validation. It utilizes its unique way of data storage to provide a highly efficient process with trust, transparency, and immutability.
• It uses the consensus method to validate transactions and each node keeps a copy of this record to handle transparency.
• It has the ability to trace the origin of products which results in better management of inventory, respond to problems or questions, and confirm the histories of merchandise. Blockchain can help track the origins of a variety of items, such as medicines to confirm they're legitimate instead of counterfeit and organic items to confirm they're indeed organic.
• Each transaction is encrypted using an advanced hashing method. A bad actor cannot make changes to the transactions because each node holds a copy of the transactions ever performed. It is nearly impossible to hack all the nodes and temper records at once. 
• Blockchain networks are also immutable, which means the data, once written, cannot be reverted by any means.
• Blockchain technology offers a shared and distributed ledger that is open to everyone.
• With blockchain, an organization can go for a completely decentralized network where there is no need for a centralized authority, improving the system’s transparency. The fact that everything is stored in a decentralized ledger also makes it easy for everyone to trust each other.
• As blockchain has no inherited centralized player, there is no need to pay for any vendor costs. This way, organizations can bring down a lot of costs associated with third-party vendors.
• Blockchain provides better traceability to prevent theft, counterfeit, and loss of goods. It enables every party in the process to trace the goods and ensure that they are not being replaced or misused.
• Anonymity is also a feature of blockchain, where every member of the blockchain network has a generated address, not a user ID. This preserves the anonymity of users, especially in a public blockchain.  
• The provenance feature makes it possible to trace the origin of each transaction in the blockchain ledger.

How Blockchain Works?

1. A user enters a new transaction.
2. A block is created in the blockchain for the transaction.
3. The transaction is then broadcast to a network of peer-to-peer computers scattered across the world.
4. The network of computers then solves equations to confirm the validity of the transaction and the block. The node that validates this transaction first gets a reward.
5. The transaction gets verified and executed.
6. The block is then chained with existing blocks creating a long history of all transactions that are permanent.

Blockchain Architectural Elements

Node — a computer in the blockchain architecture

Transaction — A data record verified by blockchain participants

Block — contains a hash code for identification, the hash code of the previous block, and a set of time-stamped transactions

Chain — An ordered sequence of blocks

Miners — Nodes that validate blocks before adding them to the blockchain structure

Consensus (protocol) — A set of rules and agreements for performing blockchain operations

It's called blockchain because it's not one big sheet of data. It is broken into blocks. So a blockchain is a set of blocks linked together via hashes. Each block has a number, transaction data, previous hash, current hash, timestamp, and nonce. The word Chain is an ingenious invention by Haber and Stornetta. At the end of a block, there is a string of text called Hash (A). A hash is the backbone of the blockchain network. It acts like a block’s fingerprint. The validated transactions in the blockchain are encrypted into a series of numbers and letters that do not resemble the original data. This string of text is called a hash. This hash is repeated in the next block (B), which creates a linkage or a chain that takes all of these blocks and connects them in a linear way. The first block is a bit special, as it cannot point to previous blocks because it’s the first. This block is called the “genesis block.”

What is Web3 and what is the future of the internet?

Tech News - Web3 And The Future Of The Internet

Over the last few decades, the internet has evolved from a niche pastime to an essential part of our daily lives. But despite the technology's massive progress, critics say it's become too centralized, with power concentrated in the hands of a few big tech companies. Enter Web3, where a slew of new companies are aiming to reshape the internet.

Proponents of Web3 say it has the potential to disrupt the giants of the tech world by giving power to internet users rather than platforms. But Web3's also drawn some prominent detractors, who’ve dismissed it as simply another Silicon Valley fad that creates more problems than it solves.

What is Web3 exactly, and why can’t the tech world stop talking about it?

Web3 is a movement in tech that calls for the creation of a decentralized version of the internet based on a few technologies — with blockchain being a key one. Ethereum is currently the most popular platform on which Web3 services are built. But there are others, including Algorand and Polkadot. In fact, the term Web3 is thought to have been first coined in 2014 by Gavin Wood, Polkadot’s creator and co-founder of Ethereum.

Web3 is really sort of an alternative vision of the web where the services that we use are not hosted by a single service provider. To understand Web3 and where it’s coming from, it's important to look a little at the history of the internet.

During the 90s and early 2000s, websites were mostly static pages where you could consume pieces of information. But it was much harder to produce content of your own. This period has been described as "Web1."

With the advent of "Web2" in the early to mid-2000s, we were introduced to applications like Facebook, YouTube, and Twitter. These sites were more interactive, allowing users to post their own material and engage in online discussions about everything from politics to pets. While Web2 ushered in a more user-friendly online experience, there were a few significant drawbacks.

Right now, you have big organizations that are controlling your data and providing you services that use your data. When you're using a service, if the service is free, that means that you are the product. Those organizations are having a lot of insight into you, your life, etc. And if you add that, together with artificial intelligence, you're able to basically know a kind of model person per person very precisely, and that's, to some extent, a level of freedom that you're giving away. Because the more those institutions know you, the better they can sell you ads. 

How does Web3 promise to change all that?

Web3 is basically an evolution of the internet, going to a place where the internet would be less centralized. The idea of Web3 is to decentralize the data. So not a single organization will have full control of your data. So that will provide you more freedom because you don't need to trust a single organization. In Web2, your data and content are managed by centralized platforms. Web3 aims to flip this model on its head. Ownership of virtual items, from social media avatars to songs, would be placed in the hands of users through nonfungible tokens, while commerce would be driven by different projects' native tokens.

When you think about the way in which content creators monetize themselves nowadays, you're relying on platforms and their arbitrary standards to derive income streams, which is something that can be, amazing when they're in your favor but honestly something that's unpredictable. Web3 platforms could be supported by decentralized autonomous organizations, or DAOs, online communities with their own tokens that users can buy to get a seat at the table.

Just as there are drawbacks with "Web2," crypto enthusiasts' vision for a third iteration of the net has some trade-offs of its own. Web3 has attracted the ire of some notable critics, including Tesla CEO Elon Musk and Twitter co-founder Jack Dorsey. In December 2021, Musk shared a tweet questioning whether Web3 was "more marketing buzzword than reality." Dorsey, meanwhile, poked fun at how Web3 projects are often backed by venture capitalists, such as Andreessen Horowitz and Sequoia Capital. That led to a public spat between Dorsey and Marc Andreessen, the prominent Silicon Valley investor. Web3's critics worry that a handful of rich tech investors are holding too much sway over its development, giving average users less of a say. Blockchain start-ups raised a record $25 billion in venture funding throughout 2021, helped in no small part by the buzz around Web3.

The term Web3 is sometimes used in connection with the metaverse, a hypothetical virtual world in which users can work, play, or even party. But just like the metaverse, Web3 still isn't that well defined. Several brands, from Gucci to the NBA, are trying to figure out their own approaches to Web3. Results have been mixed so far — particularly in the video game industry. Attempts from big studios like Ubisoft and Square Enix to launch their own NFT initiatives have been met with swift backlash from their communities.

Web2 giants like Meta and Twitter have faced a reckoning over how they moderate online content. With Web3, it’s unclear how they’ll be able to respond to toxic and harmful content when the whole point is to decentralize how platforms are run.

Is Web3 the future of the internet? Could it kill the Big Tech platforms?

Web3 is still a hazy concept, and it comes with numerous issues that will need ironing out if the technology is to mature. But some experts say the true promise of Web3 technologies is yet to be realized. Like any new innovation, the power of NFT is much more than selling a bunch of apes over the internet. With NFT you can really have digital ownership. Whether it's for real estate, for cars, or for lots of other areas. Currently, you need a third party to warrant that you have the property of something.

Right now, we're at this juncture where there's an opportunity for this technology to be made impactful for mass audiences. So, we're still trying to figure it out, it still feels like early days. 

What are the 3 web evolutions?

Tech News - Token & Crypto Economy, How The Web3 Reinvents The Internet

Web3 is the newest buzzword taking over the tech and venture capital world. And if you've found yourself wondering what it means, you're not alone. Web3 is seen as the third generation of the internet, a decentralized online ecosystem based on the blockchain. Some tech experts are unconvinced that Web3 could scale globally. As experts debate whether or not this new version of the web can become a reality, here are some of the underlying principles behind the vision for Web 3.0. To better understand Web 3.0 and what sets it apart from the web we use today, you have to go back to the early days of the internet, what experts now refer to as Web 1.0.

The internet in Web 1.0 was mostly a bunch of static pages between the years 1991 and 2004 meaning that whenever you loaded them they just showed some stuff and that was it. Some called it read-only. Web 1.0, for those who remember, was just raw HTML and lots of very simple web pages, and it wasn't really controlled by anybody. There wasn't any logging in or interacting with posts or viewing analytics. Most of the early internet wasn't even profitable by ads. It was mostly just like one big Wikipedia all hyperlinked together. Now, of course, with time we slowly made improvements and things like flash and JavaScript added many new different features. However, during this time the users of the internet were consumers they went to the internet to consume information. 

Then came Web 2.0, which started in 2004 and is the modern, centralized verse of the web. This is the stage of the internet we're living through now. The web has evolved a lot in that time, but one of the biggest changes is the interactivity of the Internet. Web technologies like JavaScript and HTML5 made the internet more interactive, allowing startups to build platforms like Facebook, Google, Amazon, and many others. For the first time, anyone could publish content online even if they couldn't code. These companies own and manage the data collected from their users, and they frequently track and save this data and use it for targeted ads. This means that not only do you get information from these sites, but these websites also start getting your information when you look at Facebook or YouTube or do a Google search. These centralized companies have started collecting data about us so that they can provide better content. This meant more money for them, but eventually, they realized that all the data they collected about us could be aggregated and sold to advertisers. Web 2.0 is the age of targeted advertising and the lack of privacy for its users. To be fair, we've happily given up that privacy for cool apps like Facebook and Twitter. In Web 2.0 we all view facebook.com and see very different news feeds because the page depends on who is viewing it. The content on your feed is the company sorting data by information that you gave them with your likes and how much you watched a video. And if you look at the ads that they show you are actually the information you didn't know you give them.

As just mentioned, Facebook, Google, and other companies own and manage the data collected from their users, and they frequently track and save this data and use it for targeted ads. At the core of their business model is data. Here's where the vision for Web 3.0 comes in. The term Web3 was first coined by one of the creators of the Ethereum blockchain, Gavin Wood. Wood envisioned Web3 as an open and decentralized version of the internet. Web 3.0 is the next evolution of the internet. It utilizes blockchain technology and the tools of decentralization. In Web 2.0 you were the product as you were browsing social networks, but in Web 3.0, some believe that you will be the owner of your content - the stuff that you post online. For example, Odyssey is a blockchain alternative to YouTube where videos can be posted and creators can earn library tokens which are basically a reward for enticing viewers to watch their videos. Odyssey can't really stop a video from being posted if someone uploads it. If someone else in the network wants to share it, they download that video and then let others watch that video and download it as well.

Similarly, if you add a post in Web 3.0, your post couldn't get taken down because your post wouldn't just be on one of Facebook servers it would theoretically be on thousands of computers around the world, ensuring that the blockchain social network you're on is not attacked or censored theoretically. In web 3.0, experts say that we will reach the point of the internet where every company is run by a decentralized group called a DAO, which stands for Decentralized Autonomous Organization. In web 3.0 there will be no censorship of social networks like Facebook or Twitter. So, one controlling authority cannot shut it down. 

One more important thing about Web 3.0 is that your digital identity is not connected to your real-world identity. What this means is that you can view pages, download things, make purchases and perform any other activity on the internet without being traced with your real identity. These may be long-term ideas of those who think about Web 3.0. What Web 3.0 really means for us is that in the next decade you might be able to buy Amazon gift cards using MetaMask and pay with Ethers or that you could anonymously leave a like on one of your friend's posts using one of your hidden wallets.

Theoretically, in Web 3.0 users would be able to exchange money and information on the web without the need for a middleman, like a bank or a tech company. In this vision for a Web3 world, people would have more control over their data and be able to sell it if they choose. And it would all be operated on a decentralized, distributed ledger technology. The most common version of this is known as the blockchain. While still considered relatively new and unproven, it could offer more transparency and autonomy for users. In this system, people would be given virtual tokens, or cryptocurrencies, to incentivize them to participate in the operation of Web3. A central element of the system is so-called DEFI, or decentralized finance. Still, it's unclear how this decentralized token system would be regulated, how it could operate on a large scale, or even how well it would distribute control of the internet.

Although it is uncertain whether Web3 will materialize, the underlying theory is inspiring billions of dollars in venture capital investments, supporting a massive ecosystem of decentralized internet services. Because of this, even if the idea behind Web3 proves to be unworkable, we'll continue to hear about it for a very long time. 

What is Cryptography & Hashing?

Tech News - An Overview of Cryptography And Hashing In Blockchain

Apparently, a database spread across the world like this looks very insecure. What if a hacker breaks into the system and gives himself a zillion coins? That’s where cryptography comes into play. Cryptography means disguising and revealing information using complex mathematics. Cryptography makes it virtually impossible for the information entered into a blockchain to be falsified and eventually makes the decentralized database very much secure. Hashing is a cryptography method that converts any form of data to a unique text string. The most extensively used hash functions are MD5 and SHA256. Cryptocurrencies use SHA256 one-way hash function.

Features of Hashing:

• Any data can be hashed, regardless of its size or type. 
• A unique piece of data will always produce the same hash. 
• The hash produced for any data is always the same length, irrespective of the scale, type, or length of the data. 
• A hash is built to act as a one-way function. You get a unique string when you put data into a hashing algorithm. But when you get a hash, you can’t decode the input data it represents. 
• The difference between hash and encryption is that the encryption can be reversed or decrypted using a specific key. Hashing, on the other hand, is a mathematical procedure that is easy to execute but incredibly difficult to reverse. 

Test SHA256 Hashing Algorithm

Enter https://emn178.github.io/online-tools/sha256.html in your browser to test how the SHA256 hashing algorithm works.

Enter some text in the upper input box (A). The hash output will be displayed in the lower box (B).

Now, let’s see what happens if I remove the last letter d from the input box. Compare it with the first hash output and observer that there is a huge difference even when just one letter is removed from the input. 

Among both the outputs, you will see that both the output values are of the same length, i.e., 64 characters. Each character is of 4 bits. So, the total length is 64 * 4 = 256 bits.

Here are some key points to remember about SHA256.

• All outputs are of the same length
• A small change in the input results in a completely different output
• For the same input, the output will always be the same
• It is not possible to reverse outputs into inputs, which means it is secure.

Centralized, Decentralized & Distributed Network

 

Tech News - What are Centralized, Decentralized & Distributed Networks.

Centralized Systems

Centralized systems are the most commonly used type of system, which uses client/server architecture where one or more client nodes (A) are directly connected to a central server (B). YouTube is one such example. When you enter 'blockchain' in the YouTube search bar, this search term is sent as a request to the YouTube servers which then respond back with a list of relevant videos. In this scenario, our devices act as clients, and YouTube servers are the central servers. Failure of the central server causes the entire network to fail because there is no other entity to respond.

Decentralized System

In a decentralized system, there is no centralized authority and everyone can take part in the network.  Decentralized systems use multiple central nodes (C), each of which usually stores a copy of the resources users can access. By design, this system is more tolerant to faults as compared to a centralized one. That's because one central node failure causes a part of the system to fail; not the whole system. The others can continue to provide data access to users. Bitcoin is the most popular use case of a decentralized system. No single entity/organization owns the Bitcoin network. The network is a sum of all the nodes that talk to each other for maintaining the amount of Bitcoin every account holder has.

Distributed System

A Distributed system is similar to a decentralized one in that it doesn’t have a single central owner. In a distributed network, all network services and coordination tasks are split evenly among many equal servers across the entire network. All data processing, computational resources, and network management functions are shared by nodes distributed geographically and logically across the whole network. Google search system can be presented as an example, where each request is worked upon by hundreds of computers that crawl the web and return the relevant results. To the user, Google appears to be one system, but it actually is multiple computers working together to accomplish one single task (return the results to the search query).

Looking at the above diagram and functionality, we can clearly state that decentralized systems are a subset of distributed systems, are more independent, and have no central controlling authority.