What is Blockchain? And How Does It Work?

Blockchain is not the technology, it’s the revolution just like the internet. The way the internet brought changes to our life the same changes will be brought up by this technology. And it’s in the very recent future. In this video, you can understand what is blockchain in a very layman language.

If you consult a technical guy and ask him what is Blockchain, he will say something like this

“Blockchain is the public distributed peer to peer ledger which keeps the records in chronological order which are secure and immutable.”

Well, it’s way too complicated for any of us to understand. If we go this way very few people will accept the blockchain as the key technology. It has to be more simple than the internet.

Let’s understand What is Blockchain in Layman Language

What is Blockchain

Let’s consider an example, suppose we have four people, Aniket, Bella, Dinesh, and John. Let’s assume we give them some money like 300,400,600,800 dollars respectively. So we create a ledger of this it will look like this.

Traditional Ledger to Understand Blockchain
Traditional Ledger to Understand Blockchain

We encrypt this transaction using a very great algorithm, almost impossible to hack and put that in the block. So we have one block. Please make a note that each block has two components one is the link and the other is the data.

We share this block with everyone, well this makes our ledger public and everyone has the data.

See How Transaction is done Blockchain

Now assume Aniket wants to transfer some amount to Dinesh. Let’s say it’s 100 Dollars, Well they will have the updated balance. Well in blockchain we don’t modify the existing data, we create another block call it blocks number 2. We encrypt our updated data and put that in block number two. Well, we now have two blocks. Here we do one more thing, we create a hash of all the data of block number 1 and put it in the link section of block number 2. Now our second block is ready, the second block has two components one is the link of the first block and the data of the second block. Now we will share this block with everyone in the network. Making our data truly public.

As we do more and more transactions, we create more and more blocks, and each time we share that with everyone. This way chain of the block is created and we term it Blockchain.

Saving Transaction in Blockchain

Key Benefits of Blockchain

We have many benefits of Blockchain, but here are the key benefits of Distributed Ledger technology.

  • No Single Point of Failure.
  • No Single Authority every one is equally responsible and authorised.
  • Super Secure and Immutable.
  • It’s public everyone can see the transactions.

Why Blockchain is so secure

Just imagine a guess if someone wants to hack your blockchain network. Let’s say he has to modify block number 10, then first he will have to modify block number 11 because the link of block number 10 is stored in 11. But to hack block number 11 he has to hack block number 12 and so on.

And each block uses military standard encryption algorithms. And one more thing he needs to hack all the computers where data is stored. Believe me, if you have 10000 blocks stored in 100 computers even the whole army of blockchain cannot hack this network.

If you want to learn about blockchain you will have to learn many things like what is a hash. what are the private key and public key? how does cryptocurrency work, what is Hyperledger Bla Bla Bla? This list too Don’t worry we will be creating many videos and blogs and will explain to you what exactly is blockchain.

Important Terms and Concepts of Blockchain – Must Read thing for Blockchain Developers and Consultants

There are many concepts like hashing, nonce, consensus, cryptography, private key, public key, etc. We will study each one of them in detail.

What is Hashing in Blockchain:

Hashing is the only thing that links the blocks in the blockchain. Each block contains the hash of the previous block and so on. Hashing can be done using many algorithms like SHA256, the most popular algorithm of bitcoin or script or any other cryptocurrency algorithm. The technical definition of hashing is “Hashing is a process which accepts a string of any length and converts them into encrypted data of fixed length using available algorithms”

Hashing the bit topic to describe in a single paragraph. Please refer to the below video to understand hashing in detail or you can also refer to the link over here https://blog.newtum.com/what-is-hashing-in-blockchain

Applications of Blockchain

Blockchain has many applications. Blockchain can remove all the issues of trust when multiple parties are involved. Here we will speak of specific applications of blockchain in various domain

1. Application of Blockchain: Remove duplicate products

Duplication of products USD 100 Billion of loss per annum. With the help of the distributed ledger application, we can keep records of ownership of tires as a digital asset. From Manufacturer to Distributor to retailer and finally to the customer. Since the blockchain records can never be modified, it will ensure the records are right. Another important thing is that blockchain records are public this will ensure that everyone has access to it. If you want to understand more about how this will work. please have a look at the below video.

2. Application of blockchain – Ease of doing business

The application of blockchain can take India from 77 to 7 much faster than any other infrastructural development. Ease of doing business, from the tallest leader of our Country to a very common man, everybody is talking about ease of doing business. We want to improve our ranking.

Introduction to blockchain in government departments can improve the data sharing between departments which will help to achieve proactive services to new companies. This will help to create many companies. it will bring more investments. it will create many jobs and it will bring prosperity to all of us. If you want to understand this in detail, please view this video.

3. Application of Blockchain: Background Verification

Blockchain Background Verification
Blockchain Background Verification

Background verification is required in every case. Like when Banks or NBFCs give loans to individuals or Users. Even when you join a new company or land your first job background verification is a must.

If you look at the traditional way of Job Posting before the era of Blockchain, it was like this

  • You apply for the job and get shortlisted.
  • Then you will have to submit the documents like your qualification certificates, experience letter from previous companies, salary slips of previous companies and many more as per the company policy.
  • Now your new company will take your document and hire a third party to verify them.
  • Third-party agents or auditors will visit your previous offices and universities for document verification.
  • This involves lots of money, time and resources.

With Blockchain it’s so simple and will take less than a minute, See How

  • Well in blockchain, all the documents by universities, your previous companies, and your previous institutes will be uploaded in Blockchain.
  • You will accept the document, this will ensure that the document is uploaded by the right authority and is accepted by you. And each document is time-stamped.
  • Blockchain document is never modified and even the timestamp remains intact.
  • Now the documents are immune and full proof, so when you apply for the job in the company, they will suggest a request for your blockchain documents.
  • After your approval, they will see all the documents, and they don’t have to go to university and colleges. Since documents are uploaded by the university and they have never been modified.
  • No one can falsely upload the document since all of them are time stamped.

4. Application of Blockchain: Install Loans and Credit Processing

Install Loans and Credit Processing
Install Loans and Credit Processing

The economy is based on Credits. Easy loan approvals play an important role in the economy. Blockchain can fasten the process of loans and disbursal can happen in minutes if blockchain is properly implemented.

Let’s look at the current process of Loan giving by banks and other credit companies without Blockchain

  • You or your company apply for the loan.
  • Your share your document with the banks for loan processing. Documents include Balance Sheets and asset statements in the case of Companies. For individuals document required are Salary Slips, Employment letter and address proof.
  • After you submit your document Banks verify the document physically with issuers. After verification loan is sanctioned and the amount is credited into your account.

With Blockchain Loan can be given in a few minutes and automatic document verification

  • As soon as the company generates the salary slip or CA generates the balance sheet, they will upload the document directly into the blockchain with a timestamp and their digital signature.
  • Since they are in blockchain no one can modify the documents or the issuer can deny it
  • So when you apply for the loan, the bank asks for the document’s permission on the blockchain.
  • They will see the document and they don’t have to verify it since they are uploaded by the issuing authority and haven’t been modified.
  • All this process can be automated so that loan approval takes seconds.

How to Develop Blockchain Applications and What the Platforms and Frameworks Available

Well, Blockchain is the hottest technology and is very high in demand. So like any other invention, many platforms are come up for blockchain application development. By application development, I don’t mean cryptocurrency development. I mean the real-life applications which can bring trust and transparency in real life.

When you develop a blockchain application, you have to take notes of a few things

  • Which are the parties involved like Users, Customers, Traders, Dealers, Manufacturers, Inspection, Quality Control Team, etc? You need to have the exact count.
  • What existing system needs to integrate with, like SAP, Oracle, etc.
  • Whether it’s an enterprise solution or public domain solution or both.
  • Does it involve cryptocurrency or it’s a direct fiat sale for a few corporates?.
  • And finally what will be the best platform to develop this application?
  • It’s a permission blockchain network or a public blockchain network. By permission I mean all the people don’t have access to all the records.

Once you have all the answers, create the workflow and choose the best Blockchain platform for your application development. See the list below for the best blockchain development framework in 2022.

Top 8 Blockchain Development Platform 2022

Well, there are many platforms and frameworks for blockchain development here is the list of top 10 platforms that we will discuss in detail.

  1. Hyperledger Fabric
  2. Corda
  3. Ethereum
  4. Hydrachain
  5. BigChainDB
  6. Open chain
  7. Quorum
  8. Multichain

Let’s discuss the some top Blockchain Development Frameworks

1. Hyperledger Fabric

Hyperledger is my first choice for Blockchain platforms. There are many reasons that Hyperledger makes it at the top. Let’s see what is Hyperledger fabric “Hyperledger is the open-source Blockchain platform hosted by Linux Foundation. Hypereledger is an enterprise-grade permissioned distributed ledger for developing business applications.”

The definition may seem a bit complicated unless you understand blockchain, but the below points, give an insight into “Why Hyperledger is the best platform for Blockchain Applications” and the benefits of Hyperledger

  • Open Source Product – with huge community ensuring Hyperledger is updated to the latest demand of industry and it’s supported by great companies like IBM, Accenture, etc.
  • It doesn’t involve any cryptocurrency and hence helps to reduce the cost of execution.
  • Tools like Hyperledger Composer ensure that even a normal database developer can adapt to Hyperledger in a few days and applications can be developed in a few weeks.
  • It’s modular with many plug-and-play modules readily available.
  • A permissioned blockchain ledger ensures that transparency is maintained while preserving the key parameters of deals like pricing which cannot be disclosed to every party involved.
  • The consensus mechanism of Hyperledger enables high-scale performance while managing the privacy and integrity of the data.
  • No need to learn any specific language quite a popular language like Node Js, Javascript and Golan can be used to program hyper ledger.

Problems with hyperledger

  • Proven for very few cases and not adopted widely. Well, this can be justified since it’s a pretty new launch.
  • Ledger may not be truly public since it’s permission and can be accessed by a few participants. But permission can be made public so that everyone can be involved, well If privacy is not important.

Important Links for Hyperledger

2. Ethereum

When we speak of Ethereum the only things that come to our mind are cryptocurrencies like Bitcoin, Litecoin, etc. But Ethereum is much bigger than that. Well, the definition of Ethereum is “Ethereum is a global, open-source platform for truly decentralized applications powered by Ethereum currency, gas, and smart contracts”. I think Ethereum is the cryptocurrency which made the word Smart Contracts very very popular. Many ERC20 tokens were launched to facilitate ICO and other applications. After the tokens, people realized the power of Blockchain and started developing DaPP. Let’s see why Ethereum is the second best platform for the Blockchain platform.

  • Ethereum is a Truly Public Ledger of Blockchain – Nothing is hidden from the world. All transactions are public.

Blockchain is the future and it’s gonna bring fundamental changes to our day-to-day life. To our interaction with Government and how we trust other brands. It’s gonna bring more and more transparency. If you want to learn blockchain to become a developer or consultant and get an early advantage and give a flying growth to your career you can enroll in this course on Blockchain.

If you want to develop and launch your own blockchain application you can contact the Techaroha Team they are the best AI and Blockchain. To read more about blockchain and keep updated about the latest development bookmark this page.

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