Blockchain Technology and Blockchain variants

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What is Blockchain?

In this module, we will explain what is blockchain, what blocks are, how they are connected in a chain within the blockchain, and what a blockchain is not. We shall also learn about blockchain ledger, variants of blockchains, and permissioned and permission-less blockchains. Also, there lies a discussion about the security that blockchains offer.

What is blockchain Technology?

“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value,” Don & Alex Tapscott, authors of Blockchain Revolution (2016).
In simple terms, Blockchain ledger is digital, distributed and decentralized. So, how does the blockchain technology work? As per the blockchain definition, it records transactions across a global network of computers where the information is highly secure. As the name suggests, blockchain is nothing but a linear chain of blocks that holds information of transactions taking place over the web. Every block contains data in the form of coding that is organized in a chronological manner.Now that we understand Blockchain in a nutshell, let us skim through its variants. Here are the Blockchain variants, as per the blockchain definition.

• Public Blockchain
In public blockchains, distributed ledgers are visible to every user on the Internet. It allows users to verify and modify blocks of transactions in a blockchain. Example: Bitcoin, Ethereum, Dash, and Factom.

• Private Blockchain
Private blockchains are generally incorporated within single organizations at an intra-level. Specific individuals of the organization are permitted to manipulate transaction blocks. However, anyone from the Internet can view the content of the blocks. But to manipulate the content of blocks, specific permissions are mandatory. Example: Multichain and Blockstack.

• Consortium Blockchain
With consortium blockchains, things are different. Only a group of organizations or individuals can verify and add transaction blocks. The ledger here may be open or restricted to certain groups only. For its high-security enablement, this variant of blockchain is used by organizations across disparate verticals. Example: Ripple, R3, and Hyperledger 1.0

Potential use cases of the blockchain
• Proof of Existence :
o Demonstrating data ownership without revealing actual data
o Document timestamping
o Checking for document integrity

1. Record Keeping :
Data inserted and hashed into secure blockchains like Bitcoin creates permanent and unforgeable information. Projects such as Tierion utilize the Bitcoin blockchain to make “blockchain receipts”.

2.Identity :
Onename uses an ID system using Blockchain technology, used to create Blockchain ID’s, login to websites without any password.

3.Forecasting – Augur :
Augur is built on the Ethereum blockchain. The idea is to create a “predictions market”

4.Cloud Storage :
Blockchain distributed storage cloud enables capacity to be decentralized, and in this manner less inclined to assaults that can cause data loss and damage. Ex.STORJ, an internet filesystem.

5.Ascribe (Secure your work) :
Provides lock in attribution, Certification of Authenticity, securely share documents, licensing of works.

6.Supply Chain Management :
With blockchain, as items change hands over a supply chain from produce to sale, the exchanges can be reported in a perpetual decentralized record — decreasing time delays, included expenses, and human mistakes.

7.Blockchain and IOT :
Universal digital ledger, ADEPT (Autonomous Decentralized Peer-to-Peer Telemetry) a decentralized system of IoT gadgets, IBM Watson IOT, IOTA, Freight transportation, Log operational maintenance data,

8.Banking :
Payments, KYC, reduction of frauds, trading platforms.

9.Government :
Online voting, registering land, real estate, devising public policy. Also, countries like Dubai, Estonia, USA, Georgia uses Blockchain for Digital Passport, Identity management, e-voting, smart contracts, public archives and land registry.

What exactly is Blockchain mining?
A peer-to-peer computer process, Blockchain mining is used to secure and verify bitcoin transactions. Mining involves Blockchain miners who add bitcoin transaction data to Bitcoin’s global public ledger of past transactions. In the ledgers, blocks are secured by Blockchain miners and are connected to each other forming a chain.
When we talk in depth, as opposed to traditional financial services systems, Bitcoins have no central clearing house. Bitcoin transactions are generally verified in decentralized clearing systems wherein people contribute computing resources to verify the same. This process of verifying transactions in called mining. It is probably referred to as mining as it is analogous to mining of commodities like gold—mining gold requires a lot of effort and resources, but then there is a limited supply of gold; hence, the amount of gold which is mined every year remains roughly the same. In the same manner, a lot of computing power is consumed in the process of mining bitcoins. The number of bitcoins that are generated from mining dwindles over time. In words of Satoshi Nakamato, there’s a limited supply of bitcoins—only 21 million bitcoins will ever be created.

At its core, the term ‘Blockchain mining’ is used to describe the process of adding transaction records to the bitcoin blockchain. This process of adding blocks to the blockchain is how transactions are processed and how money moves around securely on Bitcoins. This process of Blockchain mining is performed by a community of people around the world called ‘Blockchain miners.’
Anyone can apply to become a Blockchain miner. These Blockchain miners install and run a special Blockchain mining software that enables their computers to communicate securely with one another. Once a computer installs the software, joins the network and begins mining bitcoins, it becomes what is called a ‘node.’ Together, all these nodes communicate with one another and process transactions to add new blocks to the blockchain which is commonly known as the bitcoin network. This bitcoin network runs throughout the day. It processes equivalent to millions of dollars in bitcoin transactions and has never been hacked or experienced a downtime since its launch in 2009.

How can you mine bitcoins?
You can buy and trade for bitcoins, or you can mine them. For mining bitcoins, users are rewarded in bitcoins. This mechanism forms the pivot around which the bitcoin economy revolves. While the cost and difficulty of mining bitcoins individually continues to increase, several cloud-based mining services have gradually emerged. These services allow individual users to lease the processing power of mining equipment and mine bitcoins remotely. However, you can mine bitcoins in person too.
here are two ways to mine bitcoins.
• Mining bitcoins on cloud
• Mining bitcoins on your own
Mining Bitcoins on Cloud
• Obtain a bitcoin wallet: Bitcoins are stored in digital wallets in an encrypted manner. This will keep your bitcoins safe.
• Secure the wallet: Since there is no ownership on bitcoins, anyone who gains access to your wallet can use it without any restriction. So, enable two-factor authentication and store the wallet on a computer that does not have access to the Internet or store it in an external device.
• Choose a cloud mining service provider: Cloud mining service providers allow users to rent processing or hashing power to mine bitcoins remotely. Popular cloud mining service providers are Genesis Mining and HashFlare.
• Choose a cloud mining package: To choose a package, you will need to decide on how much you are willing to pay and keep your eyes open to the hashing power the package will offer. Cloud mining companies will mostly envisage the Return on Investment (ROI) based on the current market value of Bitcoins.
• Pick a mining pool: This is the best shot you can get to earn bitcoins easily. There are many mining pools which charge a mere 2 percent of your total earnings. Over here, you will have to create workers which are basically subaccounts that can be used to track your contributions to the pool.
• Put your earnings in your own secure wallet: Whenever you witness an ROI, simply withdraw your earnings and put them in your own secure wallet.
Mining Bitcoins on your own:
• Purchase a custom mining hardware: You need to purchase an Application-specific Integrated Circuit (ASIC) miner to mine bitcoins. While purchasing an ASIC Blockchain miner, you should consider its efficacy in hashing power and take a note of its pricing policies.
• Purchase a power supply: Blockchain miners consume a lot of power. So, get a dependable power supply which is compatible with the ASIC miner that you purchase.
• Obtain a bitcoin wallet: Bitcoins are stored in digital wallets in an encrypted manner. This will keep your bitcoins safe.
• Secure the wallet: Since there is no ownership on bitcoins, anyone who gains access to your wallet can use it without any restriction. So, enable two-factor authentication and store the wallet on a computer that does not have access to the Internet or store it in an external device.
• Pick a mining pool: This is the best shot you can get to earn bitcoins easily. There are many mining pools which charge a mere 2 percent of your total earnings. Over here, you will have to create workers which are basically subaccounts that can be used to track your contributions to the pool.
• Connect the power supply to the ASIC Blockchain miner.
• Connect the ASIC Blockchain miner to your router.
• Boot up your ASIC miner.
• Enter your router’s IP address in a web browser.
• Find ‘connected devices’ in the router miner page.
• Find your ASIC miner and click on it to display the device information.
• Copy and paste the IP address of your ASIC miner into your web browser.
• Log in to the ASIC miner with the default username and password that are ‘Root’ and ‘Root.’
• Select ‘Miner Configuration’ to set up the miner according to your preferences.
• Enter the URL, username, and password for your mining pool on the Miner Configuration page of the ASIC Miner.
• Click ‘Save and Apply’ to save your credentials for future use.
• Start mining and in periodic intervals check your profitability.
• Put your earnings in your own secure wallet: Whenever you witness an ROI, simply withdraw your earnings and put them in your own secure wallet.

Want to Know More about Blockchain Technology and How It Works You can refer to these Blogs :
1.https://intellipaat.com/blog/tutorial/blockchain-tutorial/
2.https://intellipaat.com/blog/tutorial/blockchain-tutorial/block-explorer/
3.https://intellipaat.com/blog/tutorial/blockchain-tutorial/blockchain-applications/
4.https://intellipaat.com/blog/tutorial/blockchain-tutorial/what-is-bitcoin-mining/
5.https://intellipaat.com/blog/tutorial/blockchain-tutorial/what-is-bitcoins-blockchains/

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