Blockchain

For those who have been conversant with investments, cryptocurrency and banking over the last decade, blockchain has proven to be an innovation worth of recent century. The term “Blockchain” refers directly to the technology behind bitcoin, which is the first digital currency used for transactions. It is a decentralized, distributed ledger. Although the primary purpose of the invention was to act as a digital currency, the digital community is now developing numerous other purposes for the technology.

Bitcoin is also referred to as digital gold as to date, and the currency is worth billions of US dollars. Blockchain is undoubtedly a great innovation, as is the great scientist who invented it, Satoshi Nakamoto.

This digital coin is a ledger of economic transactions, streamlined to keep track of everything in value, not just financial transactions. It is a continuing list of blocks, also called records, which are linked through cryptography. Every block contains an encrypted hash of the previous block, a timestamp and transaction data (generally illustrated by a Merkle tree root hash). Blockchain is essentially a type of payment rail which was the first digital currency to solve the double-spending problem without the need for a regulatory authority. The very first work secured on a chain of blocks was by Stuart Haber and Scott Stornetta in the year 1991. Their main aim was to incorporate a system where timestamps could be very secure.

The concept of bitcoin was first conceptualized in 2008. Satoshi improved on the design by adding blocks to the original chain without needing them to be encrypted by a trusted party. These blocks hold themselves in batches of valid transactions that form a blockchain. This blockchain forms a digital ledger that is decentralized and cannot be altered in any form. It is managed by using a timestamping server and a peer-to-peer network. This is legitimized by a collection of self-interests. The blockchain is also known as a value-exchange protocol. By keeping data in cloud network, there is the elimination of all possible risks that may arise from the data being held up in one place. This causes issues for all possible computer crackers as there is no central point of the network to attack. By making use of the decentralized system of blockchain, data is passed around through an ad-hoc message passing, and a distributed networking system. The security methods provided for blockchains include a public- key cryptography. This public key uses a random string of numbers to send value tokens across the network. It acts like a password, and it allows the owner access to view all the information stored on the blockchain, which is considered incorruptible.

Blockchains are referred to as user friendly and open to the public, but they require physical presence for it to be accessed. The best thing about bitcoins is that there are no access controls needed as permissions. Applications can be added to the blockchain network without needing the permission or trust of others as the blockchain is used as a transport layer. The blockchain secures itself by asking for new entries to show a Proof of Work (POW). Many financial organizations have not made the use of the decentralized blockchain a priority, which contrast with the investment firms which have since adopted it. As of April 2020, bitcoin was the cryptocurrency with the highest market capitalization.

Blockchain terminates the risk that comes with the centralization of data by storing it across networks. Centralized data has a bit of vulnerability that cyber hackers can use against an organization. To be able to keep information such as user passwords, user identities, assets and usernames. Blockchain technology uses encryption systems that protect your digital assets from being stolen. In this case, you can either use a public key or a private key.

"Uses of Blockchain Technology:

One of the significant usages of blockchain technology is to record transactions. A good example is the bitcoin network and Ethereum network that are based on the platform of the blockchain technology. Also, smart contracts based on the blockchain can be executed in part of it in full without human interference. However, there has been a legal dispute on this as the position of the law on this is unclear as no concrete contract can be done until the position of the law has been established. In the financial industry, distributed ledgers are now have been developed for all banking platforms. Banks have implemented blockchain technology because they believe it has the possibility of fast-tracking the settlement systems of the back office. Big banks like the UBS are beginning to open a research laboratory focused on bitcoin technology and how to use it to maximize output and reduce costs effectively.

In the gaming industry, the effect of blockchain cannot be overemphasized as most video games soon will be based on blockchain technology. The very first game that employed the use of blockchain technology was the Huntercoin, which was developed in 2014. Also, in a game called Cryptokitties, blockchains were used to make a record of the in-game assets.

Amongst other uses of blockchain technology include the use of it to create and implement a permanent transparent ledger system for taking records of data on sales, analyzing them and compiling digital use and payments to content creators such as artists and music promoters. Also, in the insurance industry, new methods of distribution have been implemented, such as parametric insurance, micro-insurance and peer to peer insurance have all been invented following the adoption of blockchain technology.

Types of Blockchain:

There are three different types of blockchain technology in the Orbit Network. We have the Public Blockchain, the Consortium Blockchain and the Private Blockchain. The public blockchain is one which gives no access limitations. Here, any individual with access to good and a reliable internet connection can be a validator and participate in a consensus protocol. Most times, these networks allow for economic benefits to anyone who can secure them. Examples of the most widely known public blockchain systems are Bitcoin and Ethereum.

The Private Blockchain does not allow free access, unlike the Public Blockchain, as it is permission. It requires validator access before it can be used, which is usually given by the network administrators. Participant movement here is restricted as it is used mostly by middle-sized companies. They cannot keep up with the level of control given by the Public Blockchain but are interested in it. Therefore, they implement blockchain into their organizational system without letting go of their control and mitigate against the risk of revealing confidential data to the outside world.

The Consortium Blockchain is a mix of both the Public Blockchain and the Private Blockchain. Here, it is regarded to be semi-decentralized as it is permission but allows for several companies to operate its node on the network. The network administrators can restrict any user’s rights and allow for a restricted set of nodes required for a consensus protocol.