Introduction to Next Generation Technology : BlockChain

Blockchain = block + chain

Block and chain make Blockchain JJ.  At a very high level, one can say it is just a chain of blocks. Since it is related to digital world and information is stored and linked. Allow me to conceptualize the same. Let’s say following blocks are called financial transactions carried out between Sohan, Mohan and Ram:

Fig 1.1- Transaction by Blockchain

Every new transaction (in our case block) is linked to consecutive transaction. Hey wait a minute how? This link is provided through hash mechanism (chain) let’s say transaction 1 – Hash is smr20105 (in computer world it is not so simple – you got the idea it is something to link change).

If someone try to change the content of the block, this mismatch will break the chain as the values are different. So the purpose of Hash is to make sure no one outside the blockchain network tempers the content.

What if there is requirement of change in block content? Wait a minute I recall one thing which is these transactions are Digital and not stored at centralized location; In fact it is distributed among all the members of a blockchain (private Blockchain).

Fig 1.2- BlockChain Concept

Ram, Mohan and Sohan are part of a blockchain network. As a rule all of them will have the same copy of ledger. Now Sohan transfer Rs. 5 to Mohan which is considered a change and resulted in new block. This new block is linked to previous block by Hash (both Prev Hash and new Hash are part of this new block); This new change is distributed to all the members of the blockchain network. All the transactions among members are going to be transparent. 

How this blockchain network is terminated? There is no contral data center concept here where all this data (ledger) is stored; This information is distributed to all members and stored in user’s computer program. Once all systems are shutdown or unsubscribed this blockchain network is dead.

Use-cases

There are two types of blockchain network :

• Public Blockchain where anyone can be part of the blockchain network. Bitcoin is one of the example of public blockchain;
• Private Blockchain can be formed between the known people by signing the smart contract.

Let’s conceptualise it , Let’s say Sohan has borrowed Rs. 100000 from Mohan and both agreet to below smart contract.

Transfer Rs. 10000 from Sohan bank account Mohan on 10^th of every month.

But how to implement such contract – it will involve all parties such as banks of both Sohan and Mohan; Sohan and Mohan will agreed to the smart contact and it will be deployed on the network (Internet); Both Sohan and Mohan will have a copy. On 10^th of month as the clock shows 00:00 agreed amount will be deducted from Sohan account. This open ledger is shared with all parties that are part of smart contract / blockchain network.

So what is the use?

This is going to impact all sectors – Banking & Financial Sectors, Healthcare, Government etc. and if you / your organization is maintaining the huge transaction records or data and want to inforce the transparency and security blockchain network can be utilized.