What is blockchain protocol

A Primer on Blockchains, Protocols, and Token Sales

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A blockchain[1] [2] [3] originally block chain[4] [5] is a continuously growing list of recordscalled blockswhich are linked and secured using cryptography. It is "an open, distributed ledger that can record what is blockchain protocol between two parties efficiently and in a verifiable and permanent way".

Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority. Blockchains are secure by design and exemplify a distributed computing system with high Byzantine fault tolerance.

Decentralized consensus has therefore been achieved with a blockchain. Blockchain was invented by Satoshi Nakamoto in for use in the cryptocurrency bitcoinas its public transaction ledger. The bitcoin design has been the inspiration for other applications.

The first work on a cryptographically secured chain of blocks was described in by Stuart Haber and W. The first blockchain was conceptualized by a person or group of people known as Satoshi Nakamoto in It was implemented the following year by Nakamoto as a core component of the cryptocurrency bitcoin, where it serves as the public ledger for all transactions on the network.

The words block and chain were used separately in Satoshi Nakamoto's original paper, but were eventually popularized as a single word, blockchain, by The term blockchain 2. Second-generation blockchain technology makes it possible to store an individual's "persistent digital ID and persona" and provides an avenue to help solve the problem of social inequality by "potentially changing the way wealth is distributed".

Inthe central securities depository of the Russian Federation NSD announced a pilot project, based on what is blockchain protocol Nxt blockchain 2. A blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record what is blockchain protocol be altered retroactively without the alteration of all subsequent blocks and the collusion of what is blockchain protocol network.

They are authenticated by mass collaboration powered by collective self-interests. The use of a blockchain removes the characteristic of infinite reproducibility from a digital asset. It confirms that each unit of value was transferred only once, solving the long-standing problem of double spending. Blockchains have been described as a value -exchange protocol. Blocks hold batches of valid transactions that are hashed and encoded into a Merkle tree. The linked blocks form a chain. Sometimes separate blocks can be produced concurrently, creating a temporary fork.

In addition to a secure hash-based history, any blockchain has a specified algorithm for scoring different versions of the history so that one with a higher value can be selected over others. Blocks not selected for inclusion in the chain are called orphan blocks. They keep only the highest-scoring version of the database known to them.

Whenever a peer receives a higher-scoring version usually the old version with a single new block added they extend or overwrite their own database and retransmit the improvement to their peers. There is never an absolute guarantee that any particular entry will remain in the best version of the history forever.

Because blockchains are typically built to add the score of new blocks onto old blocks and because there are incentives to work only on extending with new blocks rather than overwriting old blocks, the probability of an entry becoming superseded goes down what is blockchain protocol [36] as more blocks are built on top of it, eventually becoming very low.

There are a number of methods that can be used to demonstrate a sufficient level of computation. Within a blockchain the computation is carried out redundantly rather than in the traditional segregated and parallel manner. The block time is the average time it takes for the network to generate one extra block in the blockchain. In cryptocurrency, this is practically when the money transaction takes place, so a shorter block time means faster transactions.

The block time for Ethereum what is blockchain protocol set to between 14 and 15 seconds, while for bitcoin it is 10 minutes. A hard fork is a rule change such that the software validating according to the old rules will see the blocks produced according to the new rules as invalid. In case of a hard fork, all nodes meant to work in accordance with the new rules need to upgrade their software. If one group of nodes continues to use the old software while the other nodes what is blockchain protocol the new software, a split can occur.

For example, Ethereum has hard-forked to "make whole" the investors in The DAOwhich had been hacked by exploiting a what is blockchain protocol in its code. In the Nxt community was asked to consider a hard fork that would have led to a rollback of the blockchain records to mitigate the effects of a theft of 50 million NXT from a major cryptocurrency exchange.

The hard fork proposal was rejected, and some of the funds were recovered after negotiations and ransom payment. Alternatively, to prevent a permanent split, a majority what is blockchain protocol nodes using the new software may return to the old rules, as was the case what is blockchain protocol bitcoin split on 12 March By storing data across its peer-to-peer network, the blockchain eliminates a number of risks that come with data being held centrally.

Peer-to-peer blockchain networks lack centralized points of vulnerability that computer crackers can exploit; likewise, it has no central point of failure. Blockchain security methods include the use of what is blockchain protocol cryptography. Value tokens sent across the network are recorded as belonging to that address.

A private key is like a password that gives its owner access to their digital assets or the means to otherwise interact with the various capabilities that blockchains now support. Data stored on the blockchain is generally considered incorruptible. While centralized data is more easily controlled, information and data manipulation are possible. By decentralizing data on an accessible ledger, public blockchains make block-level data transparent to everyone involved.

Every node in a decentralized system has a copy of the blockchain. Data quality is maintained by massive database replication [9] and computational trust. No centralized "official" copy exists and no user is "trusted" more than any other.

Messages are delivered on a best-effort basis. Mining nodes validate transactions, [35] add them to the block they are building, and then broadcast the completed block to other nodes. Open blockchains are more user-friendly than some traditional ownership records, which, while open to the public, still require physical access to view. Because all what is blockchain protocol blockchains were permissionless, controversy has arisen over the blockchain definition.

An issue in this ongoing debate is whether a private what is blockchain protocol with verifiers tasked and authorized permissioned by a central authority should be considered a blockchain. These blockchains serve as a distributed version of multiversion concurrency control MVCC in databases. The great advantage to an open, permissionless, or public, blockchain network is that guarding against bad actors is not required and no access control is needed.

Bitcoin and other cryptocurrencies currently secure their blockchain by requiring new entries to include a proof of work. To prolong the blockchain, bitcoin uses Hashcash puzzles. Financial companies have not prioritised decentralized blockchains.

Permissioned blockchains use an access control layer to govern who has access to the network. They do not rely on anonymous nodes to validate transactions nor do they benefit from the network effect. The New York Times noted in both and that many corporations are using blockchain networks "with private blockchains, independent of the public system. Nikolai Hampton pointed out in Computerworld that "There is also what is blockchain protocol need for a '51 percent' attack on a private blockchain, as the private blockchain most likely already controls percent of all block creation resources.

If you could attack or damage the blockchain creation tools on a private corporate server, you could effectively control percent of their network and alter transactions however you wished.

It's unlikely that any private blockchain will try to protect records using gigawatts of computing power—it's time consuming and expensive. This means that many in-house blockchain solutions will be nothing more than cumbersome databases. Data interchange between participants in a blockchain is a technical challenge that could inhibit blockchain's adoption and use.

This has not yet become an issue because thus far participants in a blockchain have agreed either tacitly or actively on metadata standards. Standardized metadata will be the best approach for permissioned blockchains such as payments and securities trading with high transaction volumes and a limited number of participants.

Such standards reduce the transaction overhead for the blockchain without imposing burdensome mapping and translation requirements on the participants. However, Robert Kugel of Ventana Research points out that general purpose commercial blockchains require a system of self-describing data to permit automated data interchange.

According to Kugel, by enabling universal data interchange, self-describing data can greatly expand the number of participants in permissioned commercial blockchains without having to what is blockchain protocol control of these blockchains to a limited number of behemoths. Self-describing data also facilitates the integration of data between what is blockchain protocol blockchains. Blockchain technology can be integrated into multiple areas. The primary use of blockchains today is as a distributed ledger for cryptocurrencies, most notably bitcoin.

Blockchain technology has a large potential to transform business operating models in the long term. Blockchain distributed ledger technology is more a foundational technology —with the potential to create new foundations for global economic and social systems—than a disruptive technologywhich typically "attack a traditional business model with a lower-cost solution and overtake incumbent firms quickly".

As of [update]some observers remain skeptical. Steve Wilson, of Constellation Research, believes the technology has been hyped what is blockchain protocol unrealistic claims. This means specific blockchain applications may be a disruptive innovation, because substantially lower-cost solutions can be instantiated, which can disrupt existing business models. Blockchains alleviate the need for a trust service provider and are predicted to result in less capital being tied up in disputes.

Blockchains have the potential to reduce systemic risk and financial fraud. They automate processes that were previously time-consuming and done manually, such as the incorporation of businesses. As a distributed ledger, blockchain reduces the costs involved in verifying transactions, and by removing the need for trusted "third-parties" such as banks to complete transactions, the technology also lowers the cost of networking, therefore allowing several applications.

Starting with a strong focus on financial applications, blockchain technology is extending to activities including decentralized applications and collaborative organizations that eliminate a middleman.

Frameworks and trials such as the one at the Sweden Land Registry aim to demonstrate the effectiveness of the blockchain at speeding land sale deals. The Government of India is fighting land fraud with the help of a blockchain. In Octoberone of the first international property transactions was completed successfully using a blockchain-based smart contract.

Each of the Big Four accounting what is blockchain protocol is testing blockchain technologies in various formats. It is important to us that everybody gets on board and prepares themselves for the revolution set to take place in the business world through blockchains, [to] smart contracts and digital currencies. Blockchain-based smart contracts are contracts that can be partially or fully executed or enforced without human interaction.

The IMF believes smart contracts based on blockchain technology could reduce moral hazards and optimize the use of contracts in general.

Some blockchain implementations could what is blockchain protocol the coding of contracts that will execute when specified conditions are met. A blockchain smart contract would be enabled by extensible what is blockchain protocol instructions that define and execute an agreement. Companies have supposedly been suggesting blockchain-based currency solutions in the following two countries:.

Some countries, what is blockchain protocol Australia, are providing keynote participation in identifying the various technical issues associated with developing, governing and using blockchains:.

Don Tapscott conducted a two-year research project exploring how blockchain technology can securely move and store host "money, titles, deeds, music, art, scientific discoveries, intellectual property, and even votes".

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In essence, blockchain is a public ledger technology consisting of chains of blocks where transactions can be recorded permanently.

It features multiparty transaction, added security and record decentralization capability. Bitcoin is the earliest and first to use blockchain. And beyond Bitcoin, most people know just Ethereum. However, there are many others providing variety of features suitable for varied applications.

Bitcoin enables users to perform non-reversible transactions trustlessly. It uses Bitcoin as its virtual currency. It includes technologies such as hash, digital signature, public-key cryptography, P2P and Proof of Work and Proof of Work mining that allows users to create Bitcoins.

Recently, it was announced that Ivy platform, which is an open-source compiler developed by Chain. It will allow writing of custom contracts into smart contracts into Segwit-compatible addresses on Bitcoin network.

These contracts are used to store registries of debts, markets and move funds. Ethereum allows developers to create decentralized applications as well as democratic autonomous organizations. Ripple platform started in and uses an open-source distributed consensus ledger and native currency known as XRP. It supports tokens that can be used to represent fiat, other cryptocurrencies, commodity or other value units such as mobile minutes and frequent flier miles.

It is essentially built for banks, payment providers, digital asset exchanges and corporate who can use RippleNet to send money globally. Development started in by Linux Foundation. It focuses on ledgers targeted at supporting international business transactions, catering leading financial, technological and supply chain businesses. The collaborative effort seeks to bring together people from various industries to advance blockchain technology.

It consists of leaders in finance, banking, IoT, supply chain, manufacturing and technology. Some of its features include support for Python, endorsement policies for transactions, highly confidential channel for private information sharing.

Openchain blockchain protocols differs from others in that it uses Partitioned Consensus: The instances can connect to each other. However, different transactions are validated by different authorities depending on the assets being exchanged.

It is scalable and secure, and suitable for organizations that wish to issue and manage digital assets. IOTA blockchain uses a blockless distributed ledger called Tangle. The ledger facilitates a machine economy to trade resources in real time and on demand, and connecting of devices such as in IoT.

It enables infinitesimally small nano-payments without charging any extra fees. Businesses can, not only explore new business-to-business models, but also trade technological resources on an open market without fees. It also allows storing of data from sensors and dataloggers securely and verified on the ledger. The data can also be transferred from one device to another after authentication. While the world encourages the sharing of economy in every aspect, most belongings stay idle for most of the time.

Through IOTA, these can be leased and shared, whether you are talking about Appliances, Tools, Drones, eBikes, computer storage resources, computational power and WiFi bandwidth, just to mention a few.

Lisk went live less that two years ago. It allows development of decentralized applications in pure JavaScript. Each of the dapps runs on their own own sidechain to make Lisk stay safe and scalable. It acts like a blockchain application platform for users and developers in the same way App Store and Play Store work.

It also allows development of custom private blockchains where access permissions are more tightly controlled, with rights to modify or even read the blockchain state restricted to a few users. This is, for instance, important for financial institutions.

Institutions can also develop consortium blockchains where consensus is controlled by a pre-selected set of nodes. For instance, 15 financial institutions could each run nodes and of which 10 must sign each block for a block to be valid. Right to read may also be private or public or restricted to participants. Brainbot Technologies and a network of partners offer consulting, support plans and custom development. It is fully compatible with Ethereum Protocol, offers support for sub-second block times, has accountable validators and is open-source.

Corda is built by R3 and is a protocol used in the recording, supervising and synchronizing the financial agreements among regulated financial institutions. It was built by and for world's financial institutions but applicable in multiple industries. It leverages the blockchain technology but without design choices that make many protocols unsuitable for banking scenarios.

For instance, it eliminates the unnecessary global sharing of data. Again, the transactions are validated only by parties to the transaction instead of a broader pool with unrelated validators.

It allows Corda choreographs workflow between firms without a central controller. Consensus is achieved at the level of individual deals and not system level. It also directly enables regulatory and supervisory observer nodes. It also records an explicit link between human-language legal prose documents and smart contract code.

Symbiont Distributed ledger was introduced in as a development kit for Assembly. This ledger can process 80, transactions every second in a local multi-node network and is Byzantine fault-tolerant distributed ledger. Symbiont is targeted at institutions to allow for complex financial instruments. It also allows for cost-saving and sharing of business logic and market data. The latter is because files on-network for high availability.

Chain hosts a number of assets including securities, derivatives, loyalty points, gift cards, currencies and loyalty points. Chain authored the Chain Protocol, which powers the Chain Core blockchain platform. With Chain Core, enterprises can issue and transfer financial assets on permissioned blockchain networks. Institutions can use it to launch a blockchain network or connect to a growing list of other networks used to move funds around the world. Although creation, control and transfer of assets is decentralized among participants, network is governed by designated set of entities known as a federation.

BigChainDB is an open-source system that starts with big data distributed database. It then adds blockchain characteristics including decentralized control and digital assets transfers. With the platform, developers can deploy blockchain proof-of-concepts, platforms and applications with a highly scalable blockchain database.

It supports creation of custom assets, transactions, permissions and transparency. It allows for permissions setting at transaction level and supports both private and public networks. Another feature is the Federation Consensus Model. January 29, January 29, David Kariuki. Here are top blockchain protocols. Bitcoin Bitcoin enables users to perform non-reversible transactions trustlessly. It uses Bitcoin as its virtual currency It includes technologies such as hash, digital signature, public-key cryptography, P2P and Proof of Work and Proof of Work mining that allows users to create Bitcoins.

Ripple Consensus Network Ripple platform started in and uses an open-source distributed consensus ledger and native currency known as XRP. Hyperledger Development started in by Linux Foundation. It already has many projects under it. Openchain Openchain blockchain protocols differs from others in that it uses Partitioned Consensus: It can also be used for e-Governance and e-Voting, masked messaging, While the world encourages the sharing of economy in every aspect, most belongings stay idle for most of the time.

Lisk Lisk went live less that two years ago. With it, users can build independent social networks, messengers and games, etc. It uses won cryptocurrency called LSK.

Corda Corda is built by R3 and is a protocol used in the recording, supervising and synchronizing the financial agreements among regulated financial institutions. It has no native cryptocurrency. Symbiont Distributed ledger Symbiont Distributed ledger was introduced in as a development kit for Assembly. Chain Chain hosts a number of assets including securities, derivatives, loyalty points, gift cards, currencies and loyalty points.

Some of the use cases include areas where blockchain and databases. Top 10 Cryptocurrencies You Must Know!

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