Blockchain Technology is the Decentralized Social Network that was founded by SATOSHI NAKAMOTO in 2008 with the aim of creating a transaction with the need of third parties and the net worth of blockchain in the 2017 was $20 million dollars. Blockchain is a decentralized database, which is distributed over a computer network, with each computer in that network storing an identical copy of the same database file. The two types of blockchain technology are Public Blockchain (Non-permissioned) and Private Blockchain (Permissioned). The supremacy of using a decentralized network is that it is fast and cheap to customers. The key features of blockchain technology are Security, Transparency, Decentralization and Immutability.
BITCOIN'S FIVE FORCES:
- Blockchain technology,
- Cryptocurrency,
- Consensus,
- Hardware Code Base and
- Software Code base
CRYPTOCURRENCY
Cryptocurrency is the science of secure communication with the help of two technologies: ENCRYPTION and DECRYPTION. It is useful to secure the personal information from being accessed by third parties. Encryption involves the scrambling of information and Decryption unscrambles that information. The Encryption and Decryption are done with the help of Keys (Secret piece of Information). The keys are divided into two categories: Symmetric (where the key used for encryption is used for decryption) and Asymmetric (where different keys are used for encryption and decryption).
CONSENSUS
Consensus is the method used to achieve agreement and security across a decentralized computer network
MECHANISMS:
- Proof of Work,
- Proof of Stake,
- Proof of Capacity and
- Proof of Elapsed Time
Proof of Work : The next block generation's miner is chosen by this consensus algorithm. This PoW consensus algorithm is used by Bitcoin. The main goal of this algorithm is to quickly and readily provide a solution to a challenging mathematical conundrum.
Proof of Stake : The cornerstone for this particular consensus process is the voting delegation. Other users are given the users' votes by the users. The rewards will be given to the users who delegated to that particular vote by whichever user mines the block next.
Proof of Capacity : Instead of spending money on expensive hardware or burning coins, validators in the Proof of Capacity consensus are expected to invest their hard drive space. Validators have a better probability of being chosen to mine the following block and receiving the block reward if they have more hard drive capacity.
Proof of Elapsed Time : Every validator on the network has an equal opportunity to construct their own block using this process. To do this, every node waits for a different length of time, adding evidence of their delay to the block. The built blocks are broadcast to the network for review by other users. The validator with the lowest timer value in the proof portion wins.
PEER TO PEER NETWORK
Bitcoin is the first ever implementation of a decentralized peer to peer network for payments and value transfer over the internet without the need of intermediaries. The transactions are carried out with the help of Nodes.
SOFTWARE CODE BASE
Bitcoin was first developed as Software by Satoshi. Bitcoin core is the open source software code base that powers Bitcoin. It is known as the reference implementation of Bitcoin. It determines all aspects of systems like wallets, Transactions, Network protocol etc.,
BITCOIN IS KNOWN AS "BLOCKCHAIN 1.0".
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