History of Blockchain

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Blockchain can be defined as the Chain of Blocks that contain some specific
Information. Thus, a Blockchain is a ledger i.e file that constantly grows and keeps the
record of all transactions permanently. This process takes place in a secure,
chronological (Chronological means every transaction happens after the previous one)
and immutable way. Each time when a block is completed in storing information, a
new block is generated.

The blockchain technology was described in 1991 by the research scientist Stuart
Haber and W. Scott Stornetta. They wanted to introduce a computationally
practical solution for time-stamping digital documents so that they could not be
backdated or tampered. They develop a system using the concept
of cryptographically secured chain of blocks to store the time-stamped documents.

In 1992, Merkle Trees were incorporated into the design, which

makes blockchain more efficient by allowing several documents to be collected into
one block. Merkle Trees are used to create a 'secured chain of blocks.' It stored a
series of data records, and each data records connected to the one before it. The
newest record in this chain contains the history of the entire chain. However, this
technology went unused, and the patent lapsed in 2004.
In 2004, computer scientist and cryptographic activist Hal Finney introduced a
system called Reusable Proof Of Work(RPoW) as a prototype for digital cash. It
was a significant early step in the history of cryptocurrencies. The RPoW system
worked by receiving a non-exchangeable or a non-fungible Hashcash based proof of
work token in return, created an RSA-signed token that further could be transferred
from person to person.

RPoW solved the double-spending problem by keeping the ownership of tokens

registered on a trusted server. This server was designed to allow users throughout
the world to verify its correctness and integrity in real-time.
Further, in 2008, Satoshi Nakamoto conceptualized the theory of distributed
blockchains. He improves the design in a unique way to add blocks to the initial
chain without requiring them to be signed by trusted parties. The modified trees
would contain a secure history of data exchanges. It utilizes a peer-to-peer network
for timestamping and verifying each exchange. It could be managed autonomously
without requiring a central authority. These improvements were so beneficial that
makes blockchains as the backbone of cryptocurrencies. Today, the design serves as
the public ledger for all transactions in the cryptocurrency space.

The evolution of blockchains has been steady and promising. The words block and
chain were used separately in Satoshi Nakamoto's original paper but were eventually
popularized as a single word, the Blockchain, by 2016. In recent time, the file size of
cryptocurrency blockchain containing records of all transactions occurred on the
network has grown from 20 GB to 100 GB.

What is P2P (Peer-to-Peer Process)?

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A peer-to-peer network is a simple network of computers. It first came into existence
in the late 1970s. Here each computer acts as a node for file sharing within the formed
network. Here each node acts as a server and thus there is no central server in the
network. This allows the sharing of a huge amount of data. The tasks are equally
divided amongst the nodes. Each node connected in the network shares an equal
workload. For the network to stop working, all the nodes need to individually stop
working. This is because each node works independently.
Types of P2P networks
1. Unstructured P2P networks: In this type of P2P network, each device is
able to make an equal contribution. This network is easy to build as devices
can be connected randomly in the network. But being unstructured, it
becomes difficult to find content. For example, Napster, Gnutella, etc.
2. Structured P2P networks: It is designed using software that creates a
virtual layer in order to put the nodes in a specific structure. These are not
easy to set up but can give easy access to users to the content. For example,
P-Grid, Kademlia, etc.
3. Hybrid P2P networks: It combines the features of both P2P networks and
client-server architecture. An example of such a network is to find a node
using the central server.

Features of P2P network

 These networks do not involve a large number of nodes, usually less than
12. All the computers in the network store their own data but this data is
accessible by the group.
 Unlike client-server networks, P2P uses resources and also provides them.
This results in additional resources if the number of nodes increases. It
requires specialized software. It allows resource sharing among the
network.
 Since the nodes act as clients and servers, there is a constant threat of
attack.
 Almost all OS today support P2P networks.

P2P Network Architecture

In the P2P network architecture, the computers connect with each other in a
workgroup to share files, and access to internet and printers.
 Each computer in the network has the same set of responsibilities and
capabilities.
 Each device in the network serves as both a client and server.
 The architecture is useful in residential areas, small offices, or small
companies where each computer act as an independent workstation and
stores the data on its hard drive.
 Each computer in the network has the ability to share data with other
computers in the network.
 The architecture is usually composed of workgroups of 12 or more
computers.
How Does P2P Network Work?

Let’s understand the working of the Peer-to-Peer network through an example.

Suppose, the user wants to download a file through the peer-to-peer network then the
download will be handled in this way:
 If the peer-to-peer software is not already installed, then the user first has to
install the peer-to-peer software on his computer.
 This creates a virtual network of peer-to-peer application users.
 The user then downloads the file, which is received in bits that come from
multiple computers in the network that have already that file.
 The data is also sent from the user’s computer to other computers in the
network that ask for the data that exist on the user’s computer.
Thus, it can be said that in the peer-to-peer network the file transfer load is distributed
among the peer computers.
How to Use a P2P Network Efficiently?

Firstly secure your network via privacy solutions. Below are some of the measures to
keep the P2P network secure:
 Share and download legal files: Double-check the files that are being
downloaded before sharing them with other employees. It is very important
to make sure that only legal files are downloaded.
 Design strategy for sharing: Design a strategy that suits the underlying
architecture in order to manage applications and underlying data.
 Keep security practices up-to-date: Keep a check on the cyber security
threats which might prevail in the network. Invest in good quality software
that can sustain attacks and prevent the network from being exploited.
Update your software regularly.
 Scan all downloads: This is used to constantly check and scan all the files
for viruses before downloading them. This helps to ensure that safe files are
being downloaded and in case, any file with potential threat is detected then
report to the IT Staff.
 Proper shutdown of P2P networking after use: It is very important to
correctly shut down the software to avoid unnecessary access to third
persons to the files in the network. Even if the windows are closed after file
sharing but the software is still active then the unauthorized user can still
gain access to the network which can be a major security breach in the
network.

Applications of P2P Network

Below are some of the common uses of P2P network:

 File sharing: P2P network is the most convenient, cost-efficient method for
file sharing for businesses. Using this type of network there is no need for
intermediate servers to transfer the file.
 Blockchain: The P2P architecture is based on the concept of
decentralization. When a peer-to-peer network is enabled on the blockchain
it helps in the maintenance of a complete replica of the records ensuring the
accuracy of the data at the same time. At the same time, peer-to-peer
networks ensure security also.
 Direct messaging: P2P network provides a secure, quick, and efficient way
to communicate. This is possible due to the use of encryption at both the
peers and access to easy messaging tools.
 Collaboration: The easy file sharing also helps to build collaboration
among other peers in the network.
 File sharing networks: Many P2P file sharing networks like G2, and
eDonkey have popularized peer-to-peer technologies.
 Content distribution: In a P2P network, unline the client-server system so
the clients can both provide and use resources. Thus, the content serving
 capacity of the P2P networks can actually increase as more users begin to
access the content.
 IP Telephony: Skype is one good example of a P2P application in VoIP.

Advantages of P2P Network

 Easy to maintain: The network is easy to maintain because each node is

independent of the other.
 Less costly: Since each node acts as a server, therefore the cost of the
central server is saved. Thus, there is no need to buy an expensive server.
 No network manager: In a P2P network since each node manages his or
her own computer, thus there is no need for a network manager.
 Adding nodes is easy: Adding, deleting, and repairing nodes in this
network is easy.
 Less network traffic: In a P2P network, there is less network traffic than in
a client/ server network.

Disadvantages of P2P Network

 Data is vulnerable: Because of no central server, data is always vulnerable

to getting lost because of no backup.
 Less secure: It becomes difficult to secure the complete network because
each node is independent.
 Slow performance: In a P2P network, each computer is accessed by other
computers in the network which slows down the performance of the user.
 Files hard to locate: In a P2P network, the files are not centrally stored,
rather they are stored on individual computers which makes it difficult to
locate the files.

Examples of P2P networks

P2P networks can be basically categorized into three levels.

 The first level is the basic level which uses a USB to create a P2P network
between two systems.
 The second is the intermediate level which involves the usage of copper
wires in order to connect more than two systems.
 The third is the advanced level which uses software to establish protocols in
order to manage numerous devices across the internet.
What is Blockchain Ledger?
A blockchain ledger is a distributed database that is maintained by a network of
computers, which uses cryptography to ensure that each transaction is secure and
cannot be altered retroactively without the consensus of the network.
  The ledger is made up of blocks, which contain a list of transactions, a
timestamp, and a cryptographic hash of the previous block.

 Each new block is added to the chain in a linear, chronological sequence,

forming a permanent, immutable record of all transactions that have
occurred on the network.
 The decentralized nature of the blockchain ledger ensures that it is
resistant to tampering, censorship, and fraud, making it an ideal platform
for secure and transparent transactions.
 Blockchain technology is most commonly associated with
cryptocurrencies like Bitcoin, but it has many other potential applications,
such as supply chain management, voting systems, and digital identity
verification.
Blockchain Ledger vs Distributed Ledger
Parameter Blockchain Ledger Distributed Ledger

A consensus method, such as proof

Distributed ledgers, on the
of work or proof of stake, is used
other hand, employ a variety
Consensus by blockchain ledgers to validate
of consensus algorithms,
mechanism transactions and add new blocks to
including Paxos, Raft, and
the chain.
Byzantine Fault Tolerance.

Due to the consensus method and

On the other side, distributed
the requirement that every node
ledgers can be more scalable
validates every transaction,
since they leverage an
Scalability blockchain ledgers have come
efficient network of nodes to
under fire for their poor
validate transactions.
scalability.

Bitcoin and other cryptocurrencies Several sectors, including

as well as other financial supply chain management,
Applications applications frequently employ healthcare, and government,
blockchain ledgers. use distributed ledgers.

Distributed ledgers can either

Blockchain ledgers come in both
be public or private, however,
public and private varieties, with
they are typically utilized in
Permission private blockchains only accessible
business contexts and require
to a few users.
access rights.
 Parameter Blockchain Ledger Distributed Ledger

On the other hand, distributed

Blockchain is a distributed ledger
ledgers use a network of
that uses blocks of data connected
Structure nodes rather than a chain of
in a chain using encryption,
blocks to jointly maintain a
making it difficult to change.
ledger.

What is Double Spending in Blockchain?

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Blockchain is a list of blocks. Each block comprises some information associated with
some hash. Blockchain is used nowadays widely for transactions. It is an immutable,
distributed, and decentralized ledger. The working of Blockchain is as follows.
Suppose a user wants to make a transaction. A block is created and sent to other users.
Users validate the block and the transaction gets executed. The block is added and the
users get incentives.

Understanding Double Spending

Although Blockchain is secured, still it has some loopholes. Hackers or malicious

users take advantage of these loopholes to perform their activities.
 Double spending means the expenditure of the same digital currency twice
or more to avail the multiple services. It is a technical flaw that allows users
to duplicate money.
 Since digital currencies are nothing but files, a malicious user can create
multiple copies of the same currency file and can use it in multiple places.
 This issue can also occur if there is an alteration in the network or copies of
the currency are only used and not the original one.
 There are also double spends that allow hackers to reverse transactions so
that transaction happens two times.
 By doing this, the user loses money two times one for the fake block
created by the hacker and for the original block as well.
 The hacker gets incentives as well for the fake blocks that have been mined
and confirmed.

How Does Double Spending Happen?

Double spending can never arise physically. It can happen in online transactions. This
mostly occurs when there is no authority to verify the transaction. It can also happen if
the user’s wallet is not secured. Suppose a user wants to avail of services from
Merchant ‘A’ and Merchant ‘B’.
 The user first made a digital transaction with Merchant ‘A’.
 The copy of the cryptocurrency is stored on the user’s computer.
 So the user uses the same cryptocurrency to pay Merchant ‘B’
 Now both the merchants have the illusion that the money has been credited
since the transactions were not confirmed by the miners.
This is the case of double spending.

Example: Suppose a user has 1 BTC. He/She wants to avail of services from
merchant A and merchant B. The user creates multiple copies of the same BTC and
stores it. The user first sends the original BTC to Merchant A and gets the service.
Simultaneously, the user sends the copied version of 1 BTC to Merchant B. Since the
second transaction was not confirmed by other miners, the merchant accepts the
bitcoin and sends the service. But the cryptocurrency that was sent is invalid. This is
the case of Double Spending.
Types Of Double Spending Attacks

There are different types of Double Spending attacks:

 Finney Attack: Finney Attack is a type of Double spending Attack. In this,
a merchant accepts an unauthorized transaction. The original block is
eclipsed by the hacker using an eclipse attack. The transaction is performed
on an unauthorized one. After that, the real block shows up and again the
transaction is done automatically for the real block. Thus the merchant loses
money two times.
 Race attack: is an attack in which there is a ‘race’ between two
transactions. The attacker sends the same money using different machines
to two different merchants. The merchants send their goods but transactions
get invalid.
 51% Attack: This type of attack is prevalent in small blockchains. Hackers
usually take over 51% of the mining power of blockchain and therefore can
do anything of their own will.

How Bitcoin Handles Double Spending?

Bitcoin is one of the most popular blockchains. To combat Double spending it uses
some security measures. There are two types of examples of double spending in BTC.
1. The first case is making duplicates of the same bitcoin and sending it to
multiple users.
2. The second case is performing the transaction and reversing the already sent
transaction after getting the service.
To tackle these double-spending issues, some security measures are taken. They are:
  Validation: Validation of transactions by a maximum number of nodes in
the network. Once a block is created, it is added to a list of pending
transactions. Users send validation for the block. If the verifications are
done then only the block is added to the blockchain.
 Timestamp: The confirmed transactions are timestamped, therefore they
are irreversible. If a transaction is involved with a bitcoin it is verified and
done. But in the future, if other transactions are made with the same bitcoin,
the transactions will be canceled.
 Block Confirmations: Merchants get block confirmations so that they are
assured that there was no case of double spending. In bitcoin, a minimum of
6 confirmations are done.
 Saving copies: A copy of each transaction is kept at each node so in case of
network failure the whole network does not go down.
These security features have reduced double spending to a large extent. Let us discuss
a detailed example of how bitcoin handles double-spending.
 A user wants to spend 2 BTC. He/She can create multiple copies of the
same cryptocurrency.
 The user can send the same cryptocurrency to two different addresses say
‘Bob’ and ‘Alice’.
 Both of these transactions are sent to the pool of unconfirmed transactions.
 The first transaction T1 would be approved via the confirmation
mechanism.
 The confirmation mechanism states that a minimum of six confirmations by
miners should be done for block validation. The block is added to the
network.
 However, the second transaction T2 didn’t get sufficient confirmation so it
would be recognized as invalid by the confirmation process. The block with
the highest number of confirmations is accepted and the other one is
rejected. So transaction T1 is valid, and Alice received the bitcoin.
Solutions To Prevent Double Spending

Double Spending can be prevented using two approaches: Centralized and

Decentralized
 Centralized Approach: In this case, a secured third party is employed to
verify the transactions. The third-party can track each of the user’s balances.
Suppose a user makes a transaction. The third-party identifies the
transaction with a unique identity. Then it verifies the transaction and
allows the transaction. The problem is that suppose we want to make
transactions with other countries where a third party is not required. So in
such cases, decentralized systems come into play. another drawback is if the
whole system fails, the users cannot have access.
 Decentralized Approach: This approach is used by Bitcoin. In this, there is
no involvement of central authority. Each transaction is verified using
powerful algorithms. The decentralized approach proved to be more secure
than the centralized approach. Protocols are established and each protocol
does its job at each step. Therefore this also promotes transparency.

How to Combat Double Spending?

Double spending has been minimized to a large extent as companies are using many
security features. But we as users also have some responsibility so that such attacks
don’t happen.
 Any user should wait for a minimum of six confirmations of the transaction
before performing another transaction. In the blockchain, more the
confirmations by different users, lesser will be double spending attacks.
 Users should keep their hardware resources safe so that hackers do not
misuse them for their own purposes. Often hackers target the hardware part
because the hardware is costly. If they somehow steal the hardware, they
can roll back any transaction or alter information.
 Users should delete spam mails and avoid phishing to avoid unnecessary
malware attacks Phishing is a very common attack by hackers as hackers
target login credentials.
 Software should be updated regularly with the latest antivirus installed. If
the software is not up to date then the bugs present can cause major
damage.

How Successful Double Spending is Administered?

With the increasing dependency on the blockchain, double spending attacks have also
become a major problem. Many companies have adopted security features.
  Features like confirmation of the transaction by the nodes have been
adopted. A minimum of six confirmations is required to approve the
transaction.
 The blocks once created are immutable. They are made irreversible so that
no transaction is reverted back.
 The network’s distributed ledger of transactions autonomously records each
transaction. Each node has a copy of all transactions that are being done in
the network.
 Verification of each transaction’s authenticity is done by Blockchain
protocols to prevent double-spending. The concept of hashing is adopted.
Here each block has a unique hash.

Disadvantages of Blockchain Concerning Double Spending

There are many disadvantages of blockchain concerning Double Spending:

 Control of the blockchain: The biggest disadvantage is if the hackers
manage to take control of 51% computation power, they can do any
transaction of their own will and can steal other users’ money. Therefore
there is a threat to security as millions and millions of money are involved
in transactions.
 Alteration of information: Transaction information can also be altered by
hackers. They can mine blocks and hide the original blocks using attacks
like Eclipse attack, Finney Attack, etc.
 No authority: The third major problem is no central authority is present to
verify the transactions. But these problems will be eliminated if companies
take proper security measures and users are also aware of the measures.

Features of Blockchain
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A blockchain is a chain of blocks that contains information. Most people think that
Blockchain is Bitcoin and vice-versa. But it’s not the case. In fact, Bitcoin is a digital
currency or cryptocurrency that works on Blockchain Technology. Blockchain was
invented by Satoshi Nakamoto. As the name suggests, Each block consists of a
number of transactions, and each transaction is recorded in the form of a Hash. Hash
is a unique address assigned to each block during its creation and any further
modification in the block will lead to a change in its hash.
Features of Blockchain
Let’s have a look at the primary features of the blockchain technology:
1. Immutable

Immutability means that the blockchain is a permanent and unalterable network.

Blockchain technology functions through a collection of nodes. Once a transaction is
recorded on the blockchain, it cannot be modified or deleted. This makes the
blockchain an immutable and tamper-proof ledger that provides a high degree of
security and trust.
 Every node in the network has a copy of the digital ledger. To add a
transaction every node checks the validity of the transaction and if the
majority of the nodes think that it is a valid transaction then it is added to
the network. This means that without the approval of a majority of nodes no
one can add any transaction blocks to the ledger.
 Any validated records are irreversible and cannot be changed. This means
that any user on the network won’t be able to edit, change or delete it.

2. Distributed

All network participants have a copy of the ledger for complete transparency. A public
ledger will provide complete information about all the participants on the network and
transactions. The distributed computational power across the computers ensures a
better outcome.
Distributed ledger is one of the important features of blockchains due to many
reasons like:
 In distributed ledger tracking what’s happening in the ledger is easy as
changes propagate really fast in a distributed ledger.
  Every node on the blockchain network must maintain the ledger and
participate in the validation.
 Any change in the ledger will be updated in seconds or minutes and due to
no involvement of intermediaries in the blockchain, the validation for the
change will be done quickly.
 If a user wants to add a new block then other participating nodes have to
verify the transaction. For a new block to be added to the blockchain
network it must be approved by a majority of the nodes on the network.
 In a blockchain network, no node will get any sort of special treatment or
favors from the network. Everyone will have to follow the standard
procedure to add a new block to the network.
3. Decentralized
Blockchain technology is a decentralized system, which means that there is no central
authority controlling the network. Instead, the network is made up of a large number
of nodes that work together to verify and validate transactions. Each and every node in
the blockchain network will have the same copy of the ledger.
Decentralization property offers many advantages in the blockchain network:
 As a blockchain network does not depend on human calculations it is fully
organized and fault-tolerant.
 The blockchain network is less prone to failure due to the decentralized
nature of the network. Attacking the system is more expensive for the
hackers hence it is less likely to fail.
 There is no third-party involved hence no added risk in the system.
 The decentralized nature of blockchain facilitates creating a transparent
profile for every participant on the network. Thus, every change is
traceable, and more concreate.
 Users now have control over their properties and they don’t have to rely on
third-party to maintain and manage their assets.
4. Secure

All the records in the blockchain are individually encrypted. Using encryption adds
another layer of security to the entire process on the blockchain network. Since there
is no central authority, it does not mean that one can simply add, update or delete data
on the network.
Every information on the blockchain is hashed cryptographically which means that
every piece of data has a unique identity on the network. All the blocks contain a
unique hash of their own and the hash of the previous block. Due to this property, the
blocks are cryptographically linked with each other. Any attempt to modify the data
means to change all the hash IDs which is quite impossible.

5. Consensus

Every blockchain has a consensus to help the network to make quick and unbiased
decisions. Consensus is a decision-making algorithm for the group of nodes active on
the network to reach an agreement quickly and faster and for the smooth functioning
of the system. Nodes might not trust each other but they can trust the algorithm that
runs at the core of the network to make decisions. There are many consensus
algorithms available each with its pros and cons. Every blockchain must have a
consensus algorithm otherwise it will lose its value.
6. Unanimous
All the network participants agree to the validity of the records before they can be
added to the network. When a node wants to add a block to the network then it must
get majority voting otherwise the block cannot be added to the network. A node
cannot simply add, update, or delete information from the network. Every record is
updated simultaneously and the updations propagate quickly in the network. So it is
not possible to make any change without consent from the majority of nodes in the
network.

7. Faster Settlement

Traditional banking systems are prone to many reasons for fallout like taking days to
process a transaction after finalizing all settlements, which can be corrupted easily. On
the other hand, blockchain offers a faster settlement compared to traditional banking
systems. This blockchain feature helps make life easier.
Blockchain technology is increasing and improving day by day and has a really bright
future in the upcoming years. The transparency, trust, and temper proof characteristics
have led to many applications of it like bitcoin, Ethereum, etc. It is a pillar in making
the business and governmental procedures more secure, efficient, and effective.
More Features of Blockchain

Smart Contracts – Blockchain technology enables the creation and execution of

smart contracts, which are self-executing contracts that automatically execute when
certain conditions are met. Smart contracts have the potential to revolutionize various
industries by providing a secure and transparent way to execute contracts.
Transparency – The blockchain ledger is public and transparent, which means that
anyone can access and view the transactions on the network. This makes it a highly
transparent system that is resistant to fraud and corruption.
Applications of Blockchain – Blockchain technology has a wide range of
applications across various industries. Some of the most well-known applications
include cryptocurrency, supply chain management, identity verification, and voting
systems. However, blockchain technology has the potential to revolutionize many
other industries as well, such as healthcare, real estate, and finance.
Conclusion: In conclusion, blockchain technology is a revolutionary technology that
has the potential to transform various industries. Its decentralized, secure, transparent,
and immutable nature make it a highly desirable platform for various applications. As
the technology continues to evolve and mature, we can expect to see more innovative
use cases for blockchain technology in the future.

Types of Blockchain
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The basic application of the blockchain is to perform transactions in a secure
network. That’s why people use blockchain and ledger technology in different
scenarios. One can set up multichain to prevent unauthorized access to sensitive data.
It is not available to the public, and can only be available to authorized entities in the
organization. It depends on the organization which type it requires to choose for their
work.
By using blockchain we can track orders and payments from end to end.
Advantage using blockchain :
1. It provides greater trust among users.
2. It provides greater security among data.
3. Reduce the cost of production.
4. Improve Speed.
5. Invocation and tokenization.
6. It provides immutable records.
7. Smart contracts
Disadvantages using blockchain :
1. Data modification is not possible.
2. It requires large storage for a large database.
3. The owner cannot access the private key again if they forget or lose it.
Real life application of blockchain :

Here is a list of real world problem where we can use blockchain :

1. In a secure and full-proof voting management system.
2. To supply chain management.
3. In healthcare management.
4. Real estate project.
5. NFT marketplace.
6. Avoid copyright and original content creation.
7. In the personal identity system
8. To make an immutable data backup.
9. Internet of Things

Permissionless Blockchain

It is also known as trustless or public blockchains, are available to everyone to

participate in the blockchains process that use to validate transactions and data. These
are used in the network where high transparency is required.
Characteristics:
 Permissionless blockchain has no central authority.
 The platform is completely open-source.
 Full transparency of the transaction.
 Heavy use of tokens.

Advantages:
 Everyone can participate only requirement is good hardware and internet.
 Bring trust among users or entities.
 It has a high level of transparency as it’s a larger network.
 Broader decentralization of access to more participants.
Disadvantages:
 Poor energy efficiency due to large network.
 Lower performance scalability.
 Less privacy as many of the things is visible.

Permissioned Blockchain

These are the closed network only a set of groups are allowed to validate transactions
or data in a given blockchain network. These are used in the network where high
privacy and security are required.
Characteristics:
 A major feature is a transparency based on the objective of the organization.
  Another feature is the lack of anatomy as only a limited number of users are
allowed.
 It does not have a central authority.
 Developed by private authority.
Advantages:
 This blockchain tends to be faster as it has some nodes for validations.
 They can offer customizability.
 Strong Privacy as permission is needed for accessing transaction
information.
 As few nodes are involved performance and scalability are increased.
Disadvantages:
 Not truly decentralized as it requires permission
 Risk of corruption as only a few participants are involved.
 Anytime owner and operator can change the rules as per their need.

Types of Blockchain

There are 4 types of blockchain:

 Public Blockchain.
 Private Blockchain.
 Hybrid Blockchain.
 Consortium Blockchain.
Let’s discuss each of these topics in detail.

1. Public Blockchain

These blockchains are completely open to following the idea of decentralization. They
don’t have any restrictions, anyone having a computer and internet can participate in
the network.
 As the name is public this blockchain is open to the public, which means it
is not owned by anyone.
 Anyone having internet and a computer with good hardware can participate
in this public blockchain.
 All the computer in the network hold the copy of other nodes or block
present in the network
 In this public blockchain, we can also perform verification of transactions
or records
Advantages:
 Trustable: There are algorithms to detect no fraud. Participants need not
worry about the other nodes in the network
 Secure: This blockchain is large in size as it is open to the public. In a large
size, there is greater distribution of records
 Anonymous Nature: It is a secure platform to make your transaction
properly at the same time, you are not required to reveal your name and
identity in order to participate.
 Decentralized: There is no single platform that maintains the network,
instead every user has a copy of the ledger.
Disadvantages:
 Processing: The rate of the transaction process is very slow, due to its large
size. Verification of each node is a very time-consuming process.
 Energy Consumption: Proof of work is high energy-consuming. It requires
good computer hardware to participate in the network
 Acceptance: No central authority is there so governments are facing the
issue to implement the technology faster.
Use Cases: Public Blockchain is secured with proof of work or proof of stake they
can be used to displace traditional financial systems. The more advanced side of this
blockchain is the smart contract that enabled this blockchain to support
decentralization. Examples of public blockchain are Bitcoin, Ethereum.

2. Private Blockchain

These blockchains are not as decentralized as the public blockchain only selected
nodes can participate in the process, making it more secure than the others.
 These are not as open as a public blockchain.
 They are open to some authorized users only.
 These blockchains are operated in a closed network.
  In this few people are allowed to participate in a network within a
company/organization.
Advantages:
 Speed: The rate of the transaction is high, due to its small size. Verification
of each node is less time-consuming.
 Scalability: We can modify the scalability. The size of the network can be
decided manually.
 Privacy: It has increased the level of privacy for confidentiality reasons as
the businesses required.
 Balanced: It is more balanced as only some user has the access to the
transaction which improves the performance of the network.
Disadvantages:
 Security- The number of nodes in this type is limited so chances of
manipulation are there. These blockchains are more vulnerable.
 Centralized- Trust building is one of the main disadvantages due to its
central nature. Organizations can use this for malpractices.
 Count- Since there are few nodes if nodes go offline the entire system of
blockchain can be endangered.
Use Cases: With proper security and maintenance, this blockchain is a great asset to
secure information without exposing it to the public eye. Therefore companies use
them for internal auditing, voting, and asset management. An example of private
blockchains is Hyperledger, Corda.
3. Hybrid Blockchain
It is the mixed content of the private and public blockchain, where some part is
controlled by some organization and other makes are made visible as a public
blockchain.
It is a combination of both public and private blockchain.
Permission-based and permissionless systems are used.
User access information via smart contracts
Even a primary entity owns a hybrid blockchain it cannot alter the
transaction
Advantages:
 Ecosystem: Most advantageous thing about this blockchain is its hybrid
nature. It cannot be hacked as 51% of users don’t have access to the
network
 Cost: Transactions are cheap as only a few nodes verify the transaction. All
the nodes don’t carry the verification hence less computational cost.
 Architecture: It is highly customizable and still maintains integrity,
security, and transparency.
 Operations: It can choose the participants in the blockchain and decide
which transaction can be made public.
Disadvantages:
 Efficiency: Not everyone is in the position to implement a hybrid
Blockchain. The organization also faces some difficulty in terms of
efficiency in maintenance.
  Transparency: There is a possibility that someone can hide information
from the user. If someone wants to get access through a hybrid blockchain it
depends on the organization whether they will give or not.
 Ecosystem: Due to its closed ecosystem this blockchain lacks the
incentives for network participation.
Use Case: It provides a greater solution to the health care industry, government, real
estate, and financial companies. It provides a remedy where data is to be accessed
publicly but needs to be shielded privately. Examples of Hybrid Blockchain are
Ripple network and XRP token.

4. Consortium Blockchain

It is a creative approach that solves the needs of the organization. This blockchain
validates the transaction and also initiates or receives transactions.
 Also known as Federated Blockchain.
 This is an innovative method to solve the organization’s needs.
 Some part is public and some part is private.
 In this type, more than one organization manages the blockchain.
Advantages:
 Speed: A limited number of users make verification fast. The high speed
makes this more usable for organizations.
 Authority: Multiple organizations can take part and make it decentralized
at every level. Decentralized authority, makes it more secure.
 Privacy: The information of the checked blocks is unknown to the public
view. but any member belonging to the blockchain can access it.
 Flexible: There is much divergence in the flexibility of the blockchain.
Since it is not a very large decision can be taken faster.
Disadvantages:
 Approval: All the members approve the protocol making it less flexible.
Since one or more organizations are involved there can be differences in the
vision of interest.
 Transparency: It can be hacked if the organization becomes corrupt.
Organizations may hide information from the users.
 Vulnerability: If few nodes are getting compromised there is a greater
chance of vulnerability in this blockchain
Use Cases: It has high potential in businesses, banks, and other payment processors.
Food tracking of the organizations frequently collaborates with their sectors making it
a federated solution ideal for their use. Examples of consortium Blockchain are
Tendermint and Multichain.

Top Applications of Blockchain in the Real

World
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The last time this world changed a lot was with the invention of the Internet! Can you
imagine ever living without the ever-present Google or all the other social media sites
like Facebook, YouTube, etc? It sounds impossible. Well, this time the world might
change again because of the applications of Blockchain! Blockchain is becoming
more and more popular within the last decade and it might be an understatement to
say that Blockchain Applications is the next big thing in the world of tech.
Blockchain has so many applications in every sector you can imagine such as
healthcare, finance, government, identity, etc. And that’s not including the most
popular applications of Blockchain which is Bitcoin.
However, Blockchain is much more than just Bitcoin. Its decentralized nature makes it
extremely secure and susceptible to attacks which is why it is gaining popularity in
many applications around the world. So let’s understand the essential nature of
Blockchain and its varied uses around the world.
What is Blockchain?
Blockchain is created as a chain of blocks where each of these blocks has some
digital information. Each of the Blockchain blocks has a unique 32-bit whole number
called a nonce which is connected to a 256-bit hash number attached to it. These
blocks are connected to each other using a chain of cryptographic hash functions that
links each block to its previous block. These three components together ensure
security in the blockchain. Today with these high-end technologies, Blockchain
Applications are changing the world totally.
Best Applications of Blockchain in the Real World
Blockchain is distributed which means everyone obtains a copy in the case of a public
blockchain. So it is very difficult to modify the data in the blockchain because to do so
every copy in every location would need to be changed (which is near to impossible)
This makes blockchain both distributed and immutable along with maintaining
transparency as the data in the block is not hidden in any way. All of these properties
of blockchain ensure the highest levels of security which is why it is so popular in
many applications that prioritize security and transparency. Nowadays, Blockchain
applications are used by companies on a large scale.
So let’s see some applications of Blockchain in the real world.
1. Asset Management
Asset Management is one of the biggest applications of Blockchain. Blockchain plays
a big part in the financial world and it is no different in asset management. In general
terms, asset management involves the handling and exchange of different assets that
an individual may own such as fixed income, real estate, equity, mutual funds,
commodities, and other alternative investments. Normal trading processes in asset
management can be very expensive, especially if the trading involves multiple
countries and cross-border payments. In such situations, Blockchain can be a big help
as it removes the need for intermediaries such as brokers, custodians, brokers,
settlement managers, etc. Instead, the blockchain ledge provides a simple and
transparent process that removes the chances of error.
2. Cross-Border Payments
Have you ever tried any applications of Blockchain which make cross-border
payments in different currencies from one country to another? This can be a long
complicated process and it can take many days for the money to arrive at its
destination. Blockchain has helped in simplifying these cross-border payments by
providing end-to-end remittance services without any intermediaries. There are many
remittance companies that offer Blockchain services which can be used to make
international remittances within 24 hours.
3. Healthcare
Blockchain can have a big impact on healthcare using smart contracts and healthcare
is one of the biggest applications of blockchain. These smart contracts mean that a
contract is made between 2 parties without needing any intermediary. All the parties
involved in the contract know the contract details and the contract is implemented
automatically when the contract conditions are met. This can be very useful in
healthcare wearing personal health records can be encoded via Blockchain so they are
only accessible to primary healthcare providers with a key. They also help in
upholding the HIPAA Privacy Rule which ensures that patient information is
confidential and not accessible to everyone.
4. Cryptocurrency
Perhaps one of the most popular applications of Blockchain is in Cryptocurrency.
Who hasn’t heard about Bitcoin and its insane popularity? One of the many
advantages of cryptocurrency using blockchain as it has no geographical limitations.
So crypto coins can be used for transactions all over the world. The only important
thing to keep in mind is exchange rates and that people may lose some money in this
process. However, this option is much better than regional payment apps such as
Paytm in India which are only relevant in a particular country or geographical region
and cannot be used to pay money to people in other countries.
5. Birth and Death Certificates
There are many people in the world who don’t have a legitimate birth certificate,
especially in the poorer countries of the world. According to UNICEF, one-third of all
children under the age of five don’t have a birth certificate. And the problem is similar
to death certificates as well. However, Blockchain can help in solving this problem by
creating a secure repository of birth and death certificates that are verified and can
only be accessed by authorized people. Isn’t it an amazing Blockchain application?
6. Online Identity Verification
It is not possible to complete any financial transactions online without online
verification and identification. And this is true for all the possible service providers
any user might have in the financial and banking industry. However, blockchain can
centralize the online identity verification process so that users only need to verify their
identity once using blockchain and then they can share this identity with whichever
service provider they want. Users also have the option to choose their identity
verification methods such as user authentication, facial recognition, etc. Among the
several applications of Blockchain, this application is widely used blockchain
application is the entire industry.
7. Internet of Things
The Internet of Things is a network of interconnected devices that can interact with
others and collect data that can be used for gaining useful insights. Any system of
“things” becomes IoT once it is connected. The most common example of IoT is
perhaps the Smart Home where all the home appliances such as lights, thermostats, air
conditioners, smoke alarms, etc. can be connected together on a single platform. But
where do the applications of Blockchain come into this? Well, Blockchain is needed
for providing security for this massively distributed system. In IoT, the security of the
system is only as good as the least secured device which is the weak link. Here
Blockchain can ensure that the data obtained by the IoT devices are secure and only
visible to trusted parties.
8. Copyright and Royalties
Applications of blockchain have also touched the Creative industry as well. Copyright
and royalties are a big issue in creative sectors like music, films, etc. These are artistic
mediums and it doesn’t sound like they have any link with Blockchain. But this
technology is quite important in ensuring security and transparency in the creative
industries. There are many instances where music, films, art, etc. is plagiarized and
due credit is not given to the original artists. This can be rectified using Blockchain
which has a detailed ledger of artist rights. Blockchain is also transparent and can
provide a secure record of artist royalties and deals with big production companies.
The payment of royalties can also be managed using digital currencies like Bitcoin.