As the use of cryptocurrency has widespread, the number of transactions are increasing every day. Maintaining a record for all these transactions is difficult, so the Blockchain technology is introduced to simplify this complex issue.
What is Blockchain technology and how does it work?
A Blockchain is a type of digital ledger which maintains a record of transactions. It stores the information in regular batches, known as blocks, that are linked together in a chronological manner to form a continuous chain of blocks.
If any change is made to the information stored in a particular block, it cannot be rewritten, instead, it gets stored as a new block. This concept of Blockchain is based on the traditional method of the general financial ledger, it is a non-destructive method to track changes to data over time.
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- Blockchain is decentralized and distributed
Blockchain is created to be decentralized and is distributed among a massive network of computers. Decentralizing of information overcomes the ability for tampering of data, this makes Blockchain unique.
Blockchain creates trust in the data
Before the block gets added to the chain, few things must happen:
Firstly, a cryptographic puzzle should be solved thus creating a block. The system that finds the solution to the puzzle shares it with other computers on the network, this method is called proof-of-work.
The network will verify the proof-of-work to maintain authenticity and if it is verified, the block gets added to the chain. The combination of these tricky puzzles and verification by many systems ensures that every block on the chain is trustworthy.
What is a Distributed Ledger?
The distributed ledger is a book or any computer file where the information is stored or written. It may contain any information like transactions or contracts supported by a network which is decentralized, eliminating the need for a centralized authority.
Blockchain is a type of the digital ledger which is distributed in nature and uses independent computers to share, record and synchronize transactions within their respective electronic ledgers. Digital Ledger Technology (DLT) changes the way the financial sector is functioning, making it more reliable, efficient and resilient.
Is blockchain secure?
Blockchain is secure, it makes use of powerful cryptography to provide individual ownership of every address and the crypto assets related to it, a combination of private and public keys, created with a combination of random letters and numbers. This protects the identity from being stolen as the addresses are not directly connected with users’ identity. While being difficult to compromise.
The security standard associated with private keys is more strong as they are considerably longer. In this way, blockchain offers next-level security to every individual user as it eliminates the need for weak and easily compromised digital identities and passwords.
Blockchains has many variations depending on how they are configured. The information stored on the blocks and activities performed by various individuals on the networks of Blockchain can be controlled with these variations.
The Blockchain is categorized into 3 types:
A private Blockchain allows entry for only selected individuals of verified participants, which is similar to private business, one can choose for implementation of private Blockchain. The participant needs a verified invitation or a validation done by the network operators to join a private network. Basically, a private blockchain is not decentralized, and it operates as a closed distributed ledger, it is a secure database based on cryptography concepts.
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This is open to everyone, anyone can join and participate in activities involved in establishing a Blockchain network. It operates on a scheme of providing incentives that encourage new individuals in keeping the network agile. These blockchains provide a valuable solution from the perspective of a truly democratized, decentralized and authority-free operation.
Permissioned Blockchain allows a combination of public and private blockchains with many customizations. These type of blockchains have some set of instructions which include allowing anyone to participate in permissioned network with secured identity verification. The verified candidates have the choice of specific functions like reading, write and access information on the blockchain. Enterprises and Businesses are more interested in implementing permissioned blockchain networks as they can imply necessary restrictions while configuring networks.
Advantages of Blockchain
- Real-time transactions are effective and take very little time.
- All the processes become transparent with proper tracking and creation of records.
- Increased security with decentralized, cryptographic protocols.
- Security risks reduced such as frauds, cybercrimes, and tampering.
- Direct transactions remove the overheads and eliminate the middleman costs.
The Blockchain is not created for companies to build applications and processes. But many other companies like Ethereum, Hyperledger, R3, IBM and Ripple have created blockchain platforms to support firms interested in the technology build processes.
Ethereum is primarily a Blockchain platform that is specialized in handling smart contracts, it has a virtual coin named as ether-linked to it. Ether is the world’s second-largest cryptocurrency by value and is similar to the functioning of bitcoin.
Ripple is a type of Blockchain created specifically for cross-border transactions. The transfer of money by changing currency across the world, mainly for large businesses, is highly expensive and takes more time. This process involves many third party entities from banks to clearing houses. Ripple’s blockchain system is named as xCurrent, helps to remove intermediaries, reducing time by seconds for cross-currency transactions.
Applications of Blockchain
The stream of blocks on the Blockchain store information about monetary transactions. But the Blockchain is very reliable as it stores other types of transactions, as well. Indeed the Blockchain technology is used to store information like stops in supply chain, property exchanges, and even candidate votes.
Deloitte, a professional services network recently surveyed 1,000 companies across different countries regarding the integration of Blockchain into their business operations. The survey results tell that 34% of total companies already had Blockchain systems in production today, while others are likely to deploy a Blockchain application in the next 12 months.
The following are few of the most popular Blockchain applications being explored today:
Blockchain is the most essential technology for cryptocurrencies like bitcoin. The foreign currencies like the US dollar are verified and regulated under the control of central authority. With the control of central authority system, the value of the individuals currency may be at risk if the bank in which he has invested loses the currency value.
To overcome this problem the bitcoin came into existence and has widespread. By spreading the bitcoin operations across a wide network of computers, Blockchain enables all the cryptocurrencies to work without the need of central authority. This eliminates the transaction, processing fees and reduces the risks involved.
Apart from banking sector no other industry benefits from integrating Blockchain into their business. If a person transfers money or issues a check, it takes 3 days to reflect the bank account, Blockchain, on the other hand, never sleeps. By deploying Blockchain into banks, individuals can see transactions processed in a very little amount of time. With the help of Blockchain, banks also have the opportunity to exchange funds among the institutions more securely and quickly.
Healthcare management can leverage Blockchain to safely place their patients’ medical records. As soon as the medical record is produced and signed, the information can be stored in the Blockchain, this gives patients the confidence and proof that the records cannot be manipulated. These health records can be secured by encoding and storing them on the blockchain with a private key, so that they can only be accessed by management or certain individuals to ensure privacy.
The use of Blockchain in supply chain helps suppliers to record the origins of materials that they have bought. With this the companies will have the right to verify the authenticity of their products, along with genuine labels like “Local”, “Fair Trade” and “Organic”.
A smart contract is a computer code that is built into Blockchain to facilitate, negotiate or verify a contract agreement. It helps you to exchange money, shares, property or anything of value without any disputes while avoiding the services of middlemen. Smart contracts run with a set of rules that users agree to. When those rules are obeyed , the terms of the agreement are accomplished. This saves the middleman fees that are accompanied with a third-party mediator or notary.
Use of Blockchain in voting eliminates the election fraud and increases the number of people who show up to vote, this procedure was tested in the midterm decentralized elections held in West Virginia. Every vote would be stored as a block, making the act of tampering impossible. With Blockchain the need of personnel to conduct elections is reduced and maintains transparency in the electoral procedure giving way for instant results.
Best Programming Languages for Blockchain Development
Whether you want to proceed with development work on Blockchain or just have an idea about what happens backstage, you need to choose a proper language to program your Blockchain. Below are some of the essential programming languages suited for blockchain development:
C++ is a basic and simple programming language, it is used for higher-level tasks. It is widely popular for uses such as computer graphics and embedded systems. The use of C++ gives you lot of potential in building the real Blockchain infrastructure. It is more important in making your Blockchain quick and efficient as possible, increase the number of transactions happening per second, then C++ is must.
Simplicity is recently announced by Russell O’connor in 2017 while C++ is pretty old language. It is a higher-level programming language which is intended to produce human readable smart contracts. However the bitcoin cryptocurrency already has a language known as bitcoin script, But it needs the understanding of bitcoin and is fairly low-level.
Roles and Responsibilities of a Blockchain Engineer
- Blockchain engineers need to be proficient in creating and implementing digital solutions for different organizations by making use of a unique technology.
- They need to work for data services companies and technology consulting enterprises.
- These engineers are responsible for analyzing an organization’s technological needs and develop applications to meet their requirements.
- The job responsibilities of a Blockchain engineer includes creating and deploying items like assets and accelerators, assisting with infrastructure of the organization while making use of technologies like Ethereum.
- They may have to provide training for junior personnel and analyze code artifacts.
- They create the infrastructural document for an organization’s application and deployment methods to ensure back-end functionality
- These engineers may collaborate with IT colleagues to guarantee streamlined deployment of applications.
|Educational Requirements||Bachelor's degree|
|Job Skills||Effective analytical skills, excellent technical abilities, and strong attention to detail|
|Median Salary (2018)*||$127,000 (Software Developers, Systems Software)|
|Job Outlook (2016-2026)*||11% (Software Developers, Systems Software)|
Source: *U.S. Bureau of Labor Statistics
Blockchain Engineers Salary
- Salaries of Blockchain engineers are competing on par with AI Experts.
- The Blockchain engineers are earning an average salary between $150,000 and $175,000 annually.
- Blockchain engineers are competing with experts in Artificial Intelligence and are top paid roles in software development.
- The demand for Blockchain engineers is rising and has increased by 400 per cent since late 2017 as displayed on Hired.