Hello, Folks! Today I’m going to again talk about the Blockchain technology. The reason I’m going to talk about that is that we need to create a common language across Business and Technology about this issue. We try to talk about the various concepts & features of Blockchain as well as we will see where blockchain being used apart from the banking dummy. Finally, towards the latter half of this session, we’ll be looking at a banking use case demo where what we’ll be doing is, we try to create an alternative banking system as well as we try to make it a bit better. Albert Einstein once said that if you can not explain it simply you do not understand it what enough. The aim today is to explain it simply so everyone understands it well enough. Since you are reinventing something let’s start to make it better than anything that is there-
Some issues: –
Now, Blockchain is being used highly for transaction management. It is replacing the current existing transaction management system. If a technology is replacing the existing system there must be certain problems and that’s exactly what will be discussing at the first-
- The issues with current banking systems
- How Bitcoin can help solve these issues
- How Bitcoin transaction takes place
The issue with current Banking System: –
Let’s move forward to the first topic of this session that is the issues with the current banking system. So, there are multiple problems that you can see as part of the currently existing system and this, in turn, led to the requirement for a parallel system. But before we go the parallel system in detail. Let’s try to talk about the challenges that are faced with the current existing banking system. Now, the first-
Transaction Fees: –
Let’s take the simple example here when A wants to send $100 to B due to the transaction fees of $2, B ends up getting only $98. Now, it may not seem a huge amount but let’s assume that every day there are $10,000 transactions that happen and in that 10,000 dollars transaction even if it’s 2% commission, it’s a huge amount that we are talking about.
In the year 2015, 3 organization that is JP Morgan, Bank of America, and Wells Fargo made close to $6 billion just from ATM and overdraft transaction fees so this is a huge amount. And most banking and financial organizations depend on these kinds of fees to have this source of income as well. Now, wouldn’t we all like not to how us transaction fees because every transaction that we make be it in an ATM, be it in the Net transfer, be it in back withdraw, everything these days comes to fixed transaction fees? Even though it would be a small amount, wouldn’t be happy if you could save that? Definitely, I do want to save that.
Existing banking system: –
Moving forward let’s talk about the next problem that is there with the existing banking system. Now, this is a challenge that you would have seen if you’re from financial aid to me but to those of you who have not heard of Double Spending before.
Let me put it very simply, take the example here,
A has $500 in Lusaka but what he is trying to do is that at the same time he is trying to send B $400 and C $400. Now, in both transactions go through at the same time then it becomes a problem to identify which is valid. Because the Digital signature attached which Digital transactions can be to an extent falsified and copied as well. This makes Double Spending is quite possible and is something that is the challenge.
Now, this is one challenge that most banking or Digital’s financial solutions had faced across when they were working with online payment transactions. Apart from this, this also the challenge of the financial crisis and financial depression. Now, all of us remember the depression that had to happen in the year 2008.
Now, put it very bluntly one of the key factors which led to this depression was because financial organizations and banks had actually led out all their money as subprime mortgages to people who couldn’t afford to pay them back. This, in turn, led to a huge fall with respect to real estate value and created a huge financial crisis for everyone who is associated with respect to that. A lot of people lost their jobs as well as money but then again this was something that people had done to try to get rich.
How can Bitcoin solve these issues?
Now to understand this let’s take these 4 issues which are-
- Centralized Power
- Private Ledgers
- Prone to Hacks
- Double Spending
1. Centralized Power: –
Every monetary system that out there, today is controlled by Central Government Authority it could be a Federal Body, it could be an Anonymous personality and so on. Almost all currencies out there, today are actually controlled to an extent by a central authority. However, with Bitcoin, this system got decentralized and distributed to everyone who is part of the Bitcoin system and it keeps going on. Let’s say tomorrow you move into the Bitcoin system then definitely you are part of it and you hold a certain power to that as well.
2. Private Ledgers: –
Most banking and financial organization follow a Private Ledger. The only thing that you are aware of when you put your money into something is whether or not that transaction that you have made as a person as such. You have no idea whether someone else has taken some money, whether the bank has in itself invested this money somewhere and so far.
However, with Blockchain system the ledger in itself is public. Everyone who becomes part of this Blockchain Network gets a complete copy of entire blockchain as soon as they sign on. so, immediately when you sign up for the Bitcoin Blockchain you get a list of completed transactions that have happened from the start of Bitcoin transactions.
Now, that’s a huge amount of transactions but Blockchain it was easy as well as completely secure to store all this transaction detail and at the same time ensures that none of this gets manipulated. Now, although it is a Public Ledger you can have the complete details with respect to the transaction that happens as part of the Network. You still don’t know who exactly is doing this transaction and this is the anonymity that Blockchain gives you.
3. Prone to Hacks: –
Every now and then we do hear that a financial organization has been hacked and certain data has been leaked, certain transaction details are leaked, a certain amount has been stolen from their accounts and so on. All this is something that we have heard every now and that. But Blockchain system is completely immutable to hack, any transaction that takes place cannot be modified ahead and even if you try to modify it, the blockchain system is built so securely and so smartly that this false transaction detail gets rejected.
4. Double Spending: –
As I had mentioned, most financial organizations that have a digital platform have faced the challenge of Double Spending through Blockchain system double spending is not possible. It is basically because of how the Blockchain system in itself was structured and created. Now, double spending problem was something that was faced quite popularly at the time when the Blockchain system was becoming popular.
Keeping this in mind they had structured the Blockchain system in such a way that even in future the challenge of double spending can be completely tackled without any problem until they do not have any transaction that was part of the Double Spending issue.
Today, there are out close to 650 different kinds of cryptocurrency but most of them don’t even charge minimal transaction fees. You can transfer your money from one account to another account at no transaction charge. But let’s say if you do wish to add a specific transaction charge you can do that. There is certain cryptocurrency that does follow specific transaction fees but this is comparable minute when you see the transaction fees that are associated with a bank transaction.
How Bitcoin transaction takes Place?
Let me give you this understanding, the value of Bitcoin was somewhere close to $1,100 at the start of the year it was January 2011. Today it stands somewhere close to $20,000 (December 2017) this basically has grown because of people’s belief in the system and their investment into the system as well. So, the more people do trust the system and invest their money into it, the more the value keeps going and every day you have new people who are moving into the Bitcoin system rather than sticking to the conventional banking system. Now, there are a lot of security features that come with respect to this.
Most people who are part of the financial domain today are already moving into cryptocurrency market or have already moved in. so, definitely, this is something that will rapidly grow as well.
How can purchase Cryptocurrency or Bitcoin?
It’s quite easy, all you have to do it register for Cryptocurrency Wallet and then you can go on to purchase. There are different websites that help you do that with different charges.
What is Blockchain?
The first thing that we need to understand is two basic terms Bitcoin and Blockchain. The blockchain is a technology that runs Bitcoin. Bitcoin is a digital coin it’s money which is digital, I’m not going to talk about this Bitcoin at this time because I’ve already discussed it a few days ago. I’m going to talk about Blockchain, the Blockchain is a technology that enables moving digital coins or assets from one individual to another individual. It’s very important to understand that Bitcoin is not Blockchain.
Blockchain basically is the core technology behind Bitcoin in itself. You can say it is the spine of Bitcoin system, to put it quite simply Blockchain is actually a public distributed database which holds the encrypted ledger.
So, why is it encrypted?
To keep the details of the people involved in it completely anonymous.
what exactly is a block you might be wondering?
A block is a collection of all the recent transactions that have happened and are verified you group all those transaction details create a hash code for this and then you store it in a Block.
Once the transaction is verified then what happens is?
This block becomes a permanent part of the blockchain and the chain keeps growing. So, it is believed that every 10 minutes a new block gets created and the Blockchain keeps growing according.
Bitcoin was the first system to solve all these issues. It is the revolutionary cryptocurrency which is a digital payment system running on the blockchain technology. Bitcoin has the following features-
- No transaction fees are required
- All transactions are completed within minutes
- It is decentralized in that no person owns the Blockchain network
- It can never be manipulated or hacked because of the basic structure of a Blockchain
How Does Blockchain work?
Let me now show you a simple Bitcoin transaction, we have A who wants to send 500 Bitcoins to B. This transaction is verified by miners C and D, they start a race to solve a complex mathematical puzzle called Proof Of Work. Suppose C solves it first he adds his block containing the transaction to the existing Blockchain. He is given 12.5 Bitcoins as a reward. This is what we call as Bitcoin mining.
The blockchain is a public distributed database holding encrypted ledgers. This means a block is the current part of a Blockchain which records the recent transactions. Once it is verified it becomes a permanent part of the growing Blockchain. Blockchain run some three important technologies-
- Distributed machines on the Peer-to-Peer Network help in maintaining the consistency of the public ledger.
- Blockchain uses Private Key cryptography to secure identities and hash functions to make Blockchain immutable.
- The mathematical principle of Proof Of Work ensures that the nodes automatically and continuously agree to the current state of the ledger.
There are some important key concepts-
1. HashCode: –
Every Block has a specific hash code associated with it which is used as an identifying factor for that block. Now, this hash is something that gets created with a very complex hashing algorithm where even on minute change with respect to the input can create a highly different hash output hash code.
Now, you cannot reverse engineer this hashcode as well. The algorithm is created in such a way that no one can actually get the complete data by reverse engineering the hash code as well. Apart from this, you have the complete hash details of every transaction that has happed as a part of that block. Now, there could be multiple transactions that happen in one block. So, if we verified and validated transaction gets added to block with thereby ensuring that this transaction cannot be manipulated.
2. Proof Of Work: –
Basically, this is a mathematical solution that you attach a block to ensure that this is a valid block.
Now, you may be wondering since it is a Ledger and everyone has access to it. Can I just not directly modify the Ledger or the transaction? No, these Ledgers are something that gets created by software which in itself have to solve a mathematical problem to get the valid output so, as I had mentioned all the output gets hash and this hash value is what becomes a Proof-Of-Work. So, even if you try to falsify or even if you try to fake a specific transaction or a detail with respect to the Ledger, it is not going to get accepted. Apart from that since Ledger in itself gets distributed throughout the Network everyone has a valid copy of the same.
Let’s say if you try to change even one specific transaction which is part of the block, it does not get accepted because the majority of the people of the network have a copy of the block which is valid. So, your modified block what transaction gets completely rejected and does not become part of the original blockchain as a hook. Thereby ensuring that every transaction, as well as every block, is highly secure as well as valid and verified.
Can Bitcoin or Blockchain system be hacked directly?
Let me put it across, till date there has not been even one single incident where Bitcoin or the Blockchain system has directly been hacked. Although, blockchain system in itself is being implemented with other applications there have been certain incidents where the application gets hacked. But the Blockchain system till date has never been hacked if the application which is built on top of the Blockchain that gets hacked. But trust me, the blockchain itself can never be hacked or modified.
Blockchain Overview: –
Basically is the spine of Bitcoin system, it is again a publicly distributed database where you’re holding encrypted ledgers of everyone involved in the Blockchain. Now, once a transaction gets verified and validated it becomes a part of the new block and the new block, in turn, gets added to the blockchain.
Now, the number of transactions at this point could be all the recent transactions or only those that have been completed as well. This depends on the total number of transactions that get verified and validated in the time that a new block gets created. So, each block once it’s completed gets added to the blockchain and the next blocks work begins.
Again, the next set of transactions get added on this block and in turn it gets added to the blockchain and it ever keeps going.
There are three key features that make Blockchain –
1. Blockchain Cryptography: –
You use a combination of Public Key and Private Key cryptography apart from also using a highly secure hashing algorithm. Now, this hashing algorithm is so precise as well as complex that even a single space or comma can make a huge difference with respect to that set.
Private Key Cryptography: –
Basically, is that you share your Public Key this is similar to the account number that we had discussed earlier. So, what usually happens is that in case you do want to send your money to someone you basically request them for that Public Key and then you share your Public key, their Public Key as well as the amount that needs to be sent as part of the transaction details.
Now, based on what data you’re sharing, you can select whether it has to be encrypted by the Public Key or the Private Key and the other would be used for decrypting the data. It’s completely an asymmetrical encryption process that takes place.
2. P2P Network: –
Apart from this, we use a P2P Network that is a peer-to-peer network which ensures that there is a complete constancy with the Blockchain. Let’s see even if one person tries to make a slight change with respect to the transaction or a block which is part of the Blockchain then that change block does not get added or reflected in the blockchain. Because most people in the network have the original blockchain, this change block does not get accepted and gets rejected as well.
How does the P2P network work?
Now, suppose let us call A as a B here finds out that transaction has come in which Billy wants to transfer to 5 Bitcoins to Caira. What happens is that A broadcast this message to both B and C be in turn verified it and transmitted it accordingly to their peers as well.
Now, once they have transmitted to their peers they keep transmitted it across the network and this transaction gets propagated throughout the network. Once this transaction gets propagated and a new block is about to be created the transaction gets verified and validated and then get added to the new block itself thereby keeping a complete consistency.
Now, you may be wondering what happens when one person as far as the network tries to make a notification with respect to this transaction details. As I had mentioned earlier it is not possible.
Lets we assume another node is a D, now he actually defies the data suggesting that the amount has to come to D rather than it has to go to C and he propagated to his nodes. Now, once this gets propagated throughout there’s a majority and minority difference here. Now, this is certain limit that D can propagate his data but since the majority of people have the correct details that it is B who wants to send the 5 Bitcoins to C not, D. the transaction details with respect to which is original get accepted and modified transaction detail gets rejected. If you try to modify the transactional data it’s mostly based on a majority vote here.
Open Ledger: –
I’m going to illustrate this concept using an example, let’s say that we have a network of 4 people (A, B, C & D) that actually wants to move from one another and lets assume that at Genesis at the moment of the inception of this network A has $10 from the beginning. Now, let’s see the concept of the Open Ledger and how it is being implemented in Blockchain.
Let’s say that A wants to move to be 5 dollars, what is going to happen is that we are going to add a transaction A move to B $5 and we are going to link it to the Already existing transaction. Then let’s assume that B wants to move to C $3 so we are going to do the same we are going to link another transaction into the ledger that says B moves to C $3. Finally, if you want to move $1 from C to D again we will do the same process, the move to D $1 and we link it to the Open Ledger.
So, this is the concept of Open Ledger, it is essentially a chain of the transaction and this is one of the reasons that this is called Blockchain. This is a chain of transactions that are open and the public to everyone, what it gives us is that everyone on the network can see where the money is, how much money each one has in its pocket and everyone can decide whether a transaction is valid or not valid.
For examples, A now attempts to move $15 to D, everyone on the network can immediately see that this is not a valid transaction because A started with $10 move out to B another $5 so A does not have $15 and this transaction will not be added to the Open Ledger.
Distributed Ledger: –
It is the second principle of Blockchain which means Blockchain is going to trade the centralized one and to distribute it across the nodes in the network. Which means C, for example, can have a copy of the ledger and can hold it in his node, A can do the same and have a copy of the ledger and anyone else that participate in this network can hold the ledger and can hold a chain of events that happen. Now, what we got is that the Ledger is distributed and essentially we don’t need anymore the centralized place that holds the ledger.
However, we created another problem or a new problem now when there are various copies of the ledger in the network we need to make sure that all these copies are synchronised and all the participants in the networks see the same copy of the ledger and this leads to the third principle of Blockchain.
Now, what we need to understand is how in this kind of distributed Ledger nods understand and synchronize a Ledger across itself. Let’s say that B wants to move to D $5, so B is going to do publish and broadcast the intended transaction to the network. Everyone in the network will see immediately that B wants to move $5 to D, this is an unvalidated transaction it is not getting yet into the ledger. In order to get into the Ledger, we need to understand the concept of miners in Bitcoins.
Miners are special nodes which can hold the ledger. In this case, let’s say that C and A are miners and the miners are going to do the following thing-
Miners are going to compete among themselves who will be the first to take this transaction unvalidated one and be able to validate and put it into the ledger. The first miner that will do that will get a financial reward in this case bitcoin.
Let’s try to understand what it means to wins the competition, in order to be the first is able to take the transaction and add it to the Ledger, a miner needs to do two things
First thing needs to validate the new transaction this is easy the ledger is open and you can immediately calculate whether B does have their funds in order to make the transfer.
The second thing that a miner needs to do is to find a special key that will enable this miner (C) to take the previous transaction and to this previous transaction lock the new transaction. In order to find this key, this miner needs to invest computational power and time because this search of the key is random. The miner is repeatedly guessing new keys until it finds the first key that matches this kind of random puzzle. The first one that will do that will get the financial reward.
Digital Signature: –
A digital signature is a very important part of the transaction details because it ensures that the person who’s sending the money is the real person, as well as the amount that is being transacted, is the correct number. So, what happens is, you merely take the Public Key of the sender, the public key is the receiver and as well as add the amount that has to get transmitted. Once you take this its fed to a hash algorithm and then it gets encrypted by a Private Key which then is added as a digital signature to your document.
Now, this is the CM document that has the Public Key of the sender Public key of the Receiver. Once it gets transmitted across the network you feed the data to a hash algorithm which then again hashes the amount that has to send the Public Key of the user as well as the Public key of the Receiver. You also decrypt the signature that is attached to this document using Public Key that is being provided and then you check if the hashes are same. If it is same then it is understood that this is a valid transaction and this has not been modified as such while it is being propagated. So this, in turn, is another security feature that ensures that no transaction can be directly manipulated as well.
3. Blockchain Program: –
The program in which Blockchain is created has a lot of protocols as well as security features in itself. The blockchain program is not something that can be implemented in the banking domain. It’s being right now implemented across multiple domains and has provided one of the new generation solutions as well as overcome most of the challenges faced by a previous generation of applications. Apart from this, Blockchain can be implemented using any language as per the user’s requirement. But right now, solidity is the most preferred language for writing blockchain programs.
Blockchain Transactions: –
In any Blockchains, every transaction that gets verified and validated in the process of creation of a new block is logged along with the information of time. The participants as well as the amount that gets transmitted across each node of the network that is each user who’s part of the blockchain holds the complete blockchain in itself. So, even when to join the blockchain you get a complete copy of blockchain from the start. Usually, there’s a 24-hour validation process that takes place but after 24-hours once you’ve set up a blockchain network you can go on to perform various operations as part of it.
Talking more about transactions involved in a Blockchain each transaction is verified by a Miner after he solves a complex mathematical puzzle and once he solves this and verified the transaction he maintains and updates the Ledger as well.
Now the mathematical principle which is involved as part of the validation process ensures that every node which is part of the Blockchain is automatically and continuously in sync with respect to the current state of the ledger and every transaction in it. Basically, it ensures that everyone has the same set of the transaction as well as the same state of the ledger as well.
Apart from this as I had mentioned even if one person tries to corrupt or change the transaction part of it. The other nodes would not agree with it and thereby refuse to incorporate and neglect this transaction detail.
Types of Blockchain: –
- Public Blockchain
- Private Blockchain
- Consortium Blockchain
1.Public Blockchain: –
It is similar to your Bitcoin or Go Ethereum Blockchain which anyone in the world can be part of. You can both read as well as write data into this Blockchain if you are a miner and also you can read data if you’re part of the Peer-to-Peer network as well. So, anyone who’s part of the network can verify and add a new block of transactions that have a part to this Blockchain.
2. Private Blockchain: –
Private Blockchain is, however, is something that is quite restricted usually only one central person has the complete right to both verify the transaction as well as either new block to the Blockchain.
3. Consortium: –
It is something that is in Public as well as Private. Here what happens is that instead of one person it becomes a group of people or Organization. Let’s say there is a group of people of 10 Banks among them 5 may be chosen who can both verify as well as add a new Block as part of the Blockchain. Now, with respect to the view that is available, A Public Blockchain is something that anyone can access to, as we have seen the Bitcoin as well as Go Ethereum Blockchain is something that anyone can download and work with. But at the same time, the Private or Consortium Blockchain are created and managed with respect to their specific purposes.
You may not always be able to access the Private or Consortium Blockchain because they may be set to the specific user requirement. However, there are certain Private as well as consortium Blockchain which is accessible to the Public but again this is something that the user has to do that is the creator of the Blockchain has to set according to it. If you do wish to create a Blockchain which is accessible to the Public but lets you only add or modify it then definitely you can do that as well.
Can we combine two different Blockchain?
Definitely, that also can be done and it can be done to form a completely large blockchain as well. There are certain things that you would need to change but definitely, it is possible.
Blockchain Use Cases: –
These are some of the most popular domains where Blockchain at presently is being used-
- Payment & Transfers
- Law Enforcement
- Internet of Things
- Online Music
- Real Estate
Banking and Payment & Transfers: –
The banking domain where blockchain is currently replacing the existing as well as overtaking the currently existing system as well as the Payment and transactional system. The Bitcoin wallet system has grown so rapidly that it becomes quite easy for anyone to transfer their bitcoins or cryptocurrency across to other users and these days as I had mentioned you don’t even need to bother entering that publicly. All you need to do is a scan or unique QR code that is present as part of the Blockchain wallet and the complete transaction happens right away.
With respect to the banking domain blockchain, this is the possibility of cutting down $20 billion that is mainly taken up by the middleman. Now, this $20 billion is something that these middleman organizations earn with respect to a year. Although it does increase a chance of reducing of jobs respect to these domains at the same time imagine what could happen if banks themselves would implement blockchain and that’s exactly they are being done these days.
Apart from that, the opportunity of hacking into the bank ledgers and the making changes with respects to the same is becoming highly impossible as well for the people. Imagine what would have done earlier was you would actually hack into the banking the changes in the Ledger take money from someone else’s account put it in your account.
Now, it’s quite impossible because the only details that are present as part of the Ledger are the transaction detail which as you know cannot be modified by a single person because the Blockchain is designed as such. Also, it solved the problem of Double Spending as we have discussed and seen, how the Double Spending problem gets solved? This is something that can be quite useful for the Digital banking domain system.
Finally, talking about the risk involves with respect to the same. Since you have an idea of what is happening with respect to your money, you get a clearer idea at this one rather than the conventional Private ledger system that has been followed earlier. The next generation of distributed Ledger system helps the people get certain clarity with respect to how exactly is their money being transaction and where exactly is their money at the moment. Although it again as I have mentioned anonymity but gives you at least a clearer picture.
Apart from this, the Payment and Transfer domain is completely changed because of the security feature that is being provided by blockchain this becomes essential factor ensuring the ease of usage.
Now, bitcoin is basically a system that runs on low transaction fees and let’s say if you do want a transaction to be computed on a very high priority then it’s up to you to add specific transaction fees.
You don’t need any specific bank accounts that are required. You don’t need to link your bank account to your Bitcoin wallet, you don’t need to give the complete details to anyone, you don’t need to attend annoying calls that you get from banks and so far. Apart from this, your anonymity is completely maintained. Now, as I mentioned earlier you are basically providing the Public key as part of the Ledger.
Now, there’s an upside and downside to it, the upside is that no one really knows who is the person who has the most balance or how much balance does each person have whose part of the Blockchain. But at the downside all of you do remember the ransomware attack, there what had happened was they had requested in terms of Bitcoins and they had given their Public ID. Now, even though the Public ID was provided it does not easy to identify who the person was at the other receiving end because their complete details are hashed and hidden as well. So, there is always a positive and negative to certain technologies as far.
Healthcare is a domain where Blockchain is presently being used to store the details with respect to the Patients. Now, this ensures that anyone who has access to this Blockchain can access the details of the patients as such.
Imagine what would happen if we had a nationwide Blockchain with all the details with respect to the Patient. Since it’s highly secure, no one can directly access this detail and make any changes with respect to it thereby ensuring the anonymity of the patient. But at the same time let’s say Doctor wants to see the details with respect to a Patient. All he needs to do is give him this detail, give him the Public key through which he can access the complete details present on the Blockchain and get the required data with respect to that set.
Law Enforcement: –
Similarly, Law Enforcement agencies are using the option to ensure a highly accessible database comes up with respect to the Criminals and the Crimes that they have gone. So, this is something that you can see coming out quite soon.
Now, this is something that is a domain that is getting revolutionized with Blockchain. We possibly might see the next or the next-to-next election made quite easy as well as secure and full proof with the blockchain system.
The voting domain is one domain that is expected to change completely with the involvement of Blockchain. Using the Blockchain you can always authenticate the identity of everyone who’s voting using their signature as well as secure their personal information. Now, this ensures that we are not quite sure who exactly has voted for which party but at the same time their personal information is valid and highly secure as such.
Now, apart from this, it ensures that there are no word frauds that happen as well as the loss of records does not take place. As I have mentioned any transaction that gets added to the blockchain becomes a permanent part of it. You cannot modify it thereby ensuring that Voters fraud does not happen or any other kind of fowl-play does not take place. Now, this, in turn, is going to lead to increasing I terms because everyone ensures that no one is going to know about their Votes. There is no damping that’s going to happen as well as it becomes easy for people to become part of this blockchain and submit their votes.
But this in turn is going to increase the voter turnout as well because there are certain organizations that are investing the source to build an application itself which makes it easy for people to vote from anywhere that they are wouldn’t you like to vote for your party sitting at home or working it from the office making it sure that you have cast your vote. You have made your decision, you have support for your party at the same time the details are not leaked and at your convenience as well.
Now, one of the popular organizations working in the voting domain is followed my work. We presently are trying to change the upcoming election ideas and trying to implement the Online Blockchain voting system by maybe the next or next-to-next elections as well.
Internet of Things: –
It is another major domain that is currently using Blockchain system to ensure the transfer of data between the devices without any corrections as well as without any interferences as such.
Online Music: –
The online Music market is something that is rapidly growing to the Blockchain system as well. Here, what is happening is that the music domain is completely changing and putting up with music on a Blockchain wherein anyone can have access to it but at the same time cannot make any modifications with respect to that. So, let’s there is a specific customer who has paid for the song then all I need to do is give him the details and he can take it from the blockchain as well.
Real Estate: –
It is also being influenced by blockchain and pretty soon I am quite sure that you will be buying your properties directly from a Real Estate Blockchain as well.
How Blockchain achieves the Bitcoin solution or the Bitcoin parallel system?
Now, what happens first-
Someone request a transaction: –
It’s quite easy for anyone to request a transaction all you need to do is that you need to have the details to whom you’re sending. And with respect to details, you need to just have a unique number that they’re going to be shared.
There is certain cryptocurrency wallet that even let you scan the QR code of the sender and initiate the transaction as well. So, it’s quite easy all you need to do is enter one specific unique number that they provide you, with you have to enter your unique number and then you need to specify the amount that you need to send to them.
Once you do this it gets transmitted across to everyone who’s part of the Bitcoin network. Once they receive that and validation of this transaction is done then the verification goes on and then this transaction becomes part of the new block which is going to be added to the existing Blockchain.
Once the new block is created it goes on to get added to the existing blockchain and the transaction process gets completed.
Here in it also avoids the need for a third party who in turn access mediatory between the sender and the receiver. Thereby this exactly awards the need for transaction fees as well and is one of the key factors that has increased the popularity of Blockchain and Bitcoin network as such.
Blockchain Demo: –
The Demo that we will be performing today is going to be using Ethereum. Ethereum basically is an online open source publicly distributed blockchain system to which anyone can be a part of it. It’s similar to your Bitcoin system itself. Now what we need to achieve as part of today’s demo is that we need to implement a Digital bank which actually implements the Ethereum Blockchain. Now, this system has to allow us to do three things, first is-
Make a Cryptocurrency with a fixed market supply and tokens that represent real-world asset values. Well, that basically means that we need to create a cryptocurrency which has a fixed value outside.
Apart from that, we need to autonomously create a Private blockchain.
As well as Mine for new Ether while validating the transaction. So, if you are validating a transaction and creating a new block you need to ensure that Ethers are being provided to these miners well.
So, first begin by installing Go Ethereum on to our system then register an account to Go Ethereum Blockchain then we will be creating a Private Autonomous Blockchain and finally, we try to perform few transactions intern. Now as I had mentioned at the start of the discussion these are basically dummy transactions that we’ll be working on. But again, we should give you a complete idea of how a Blockchain System works and how it effectively solves your problem.
So, first let’s begin by installing blockchain on to our system
Now, for this, the first thing that we need to do is that we need to clone the Go Ethereum Path that is present in the GitHub repository and we need to create a local repository
Now, we’ll be doing that on an Ubuntu virtual machine. So, in case if you do have an Ubuntu virtual machine to your access immediately. You can go on and try it out simultaneously. even if you have Ubuntu installing a system I would recommend that you try it out.
Note- The Full Demo of Blockchain by Go Ethereum, I’ll discuss in next session so keep in touch…
Let’s try to summarize what we did or what we learned.
we started off by understanding what would a world look like without banks, we eve saw the bitcoin history and how blockchain helps with the bitcoin solutions. After that, we talked about the various blockchain concepts and the blockchain use case and finally, we saw the brief Demo of Blockchain. We try to explain how blockchain works, we learned that Blockchain is not Bitcoin there are two different things, we learned that Blockchain is based on basic principles of the fact that the Ledger is Open or Public such that everyone can see and validate transactions. The fact that the Ledger is distributed and essentially exists in many nodes on the network, removes the dependency on the third party. We learned about the concept of miners who are special nodes in the network that their role is to validate transactions and adds into the Ledger. We touched only the fact that the economic incentive of miners, essentially ensures that collectively they agree what is the official Ledger’s that should be used by everyone.
Basically, Blockchain uses the various mathematical functions as well as algorithm to create a highly secure as well as distributed Ledger system which enables transactions to take place without a need for a third party or any need for transaction or commission requirement. You don’t have to depend on a third party to take your transaction through and this is one of the key reasons why the Blockchain system is referred to as aa no trust system. It’s not that you don’t trust someone, you don’t have to put your trust on a third person to complete your transaction, It is something that gets completed without a problem.
So, who want to go for this, I’ll say it very straightforward, a man who has an open mind and is willing to explore and move into new and advanced technology should definitely go for this.