An idea which backdates to 1991…
“The prospect of a world in which all text, audio, picture, and video documents are in digital form on easily modifiable media raises the issue of how to certify when a document was created or last changed. The problem is to time-stamp the data, not the medium. We propose computationally practical procedures for digital time-stamping of such documents so that it is infeasible for a user either to back-date or to forward-date his document, even with the collusion of a time-stamping service. Our procedures maintain complete privacy of the documents themselves, and require no record-keeping by the time-stamping service.”
– Stuart Haber and W. Scott Stornetta
What is blockchain?
- Blockchain in simple terms is a Linked List which contains data and previous block’s address.
- Address of block is calculated by hashing data and previous address
- This blockchain is distributed across all the nodes in the network, so that there can’t be any single point of failure.
Characteristics of Blockchain
- Immutable Ledger (Thanks to Cryptography)
- Distributed Peer-To-Peer network (Similar to “Torrent” network)
- Consensus Protocol (For agreement between nodes in network)
1. Immutable Ledger
- Dictionary Meaning of Ledger: a book or other collection of financial accounts.
- Immutable Ledger : Ledger cannot be deleted or edited.
That means whatever transaction written in blockchain will never change. It can only be read.
2. Distributed Peer-To-Peer network
- Peer-to-peer (P2P) computing or networking is a distributed application architecture that partitions tasks or workloads between peers. Peers are equally privileged, equipotent participants in the application. They are said to form a peer-to-peer network of nodes.
- No Central authority. Hence no single point of failure
3. Consensus Protocol
- Consensus protocols help to bring an agreement between every node in the network before commiting a new block in the blockchain.
- So that trust can be created between different nodes who may have conflict of interest.
- Different Consensus Protocols are:
- Proof of Work (PoW)
- Proof of Stake (PoS)
- Delegated Proof of Stake (DPoS)
- Byzantine Fault Tolerance (BFT)
- Delegated Byzantine Fault Tolerance (DBFT)
- Proof of Authority (PoA)
- Proof of Weight (PoWeight)
- Directed Acyclic Graphs (DAG)
- Unique Node Lists (UNL)
- Proof of Burn (PoB)
- Proof of Capacity (PoC)
- So blockchain can be defined as a linked list which contains immutable ledger of data.
- This linked list is distributed and replicated across the network, so that there is no single points of failure and no centralised authority.
- If there is no centralised authority present, how will the ledgers be approved and added? That is solved by consensus protocols of blockchain.
Stay tuned for next blog in the series.
Here is a teaser:
- Public vs Private (Permissionless vs Permissioned)
- Industrial Applications
- Technology stack around Blockchain