Blockchain is a technology that is known to store transactional records, simply known as ‘blocks’. The blocks are present in various databases which we call ‘chain’ and the network of block and chain is connected via peer-to-peer nodes. The complete storage phenomenon is called a digital ledger. Each transaction that a user makes in the ledger gets authorised by an owner as a digital signature. This helps in the authentication of the transaction and also prevents it from tampering. Therefore, the information contained in the digital ledger is very secure. In this article, you’ll learn about what a blockchain actually is, types of blockchain architectures, Components of a blockchain architecture, etc.
Blockchain is basically a kind of digital ledger that helps in maintaining transactional records. The information is stored in regular batches which are known as blocks and they are linked in a chronological way together to configure a continuous chain of blocks known as the blockchain.
The changes that a user makes in the information that is stored in a particular block cannot be rewritten. However, the change in information gets stored as a new block. Blockchain is considered secure as powerful cryptography is used which provides sole address ownership to the user along with the crypto assets which are related to them. The crypto is designed as a combination of both public as well as private keys and they are created using a combination of numbers and letters. Therefore, this helps from the identity thrift when the address is not directly linked with the identity of the user.
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There are mainly 4 types of blockchain architectures:
These blockchains are open and allow anyone to join the network. These allow all the present blockchain nodes to gain equal rights for creating new data blocks, accessing the blockchain, and even validating the data blocks. They were initially used for cryptocurrency mining and its exchange. Some examples of public blockchains are Bitcoin, Ethereum, etc. The estimated efficiency of this blockchain is low as compared to other types.
These blockchains are meant to have control by a single organisation and are permissioned. The central authority decides whether to grant permission to a node or not in a private blockchain. Private blockchains are mostly decentralised as their public access is regulated. There are a few examples of private blockchains such as business-to-business, virtual money exchange, umbrella projects, etc.
There are drawbacks to both private as well as public blockchains. The private blockchain has less validation time for fresh data as compared to the public blockchain. It is also stated that private blockchains are riskier and are vulnerable to hacks and frauds. Hence there was a development of consortium and hybrid blockchains to overcome these drawbacks
These blockchains are taken care of by a group of people in an organisation rather than a single community like a private blockchain scenario. Consortium blockchains are comparatively more decentralised as compared to private blockchains and they retain high-security levels. However, when we talk about the drawbacks of this blockchain, the cost is really high. It is very difficult to digitise the data and create connections to the other members present in the supply chain. The estimated efficiency of this blockchain is high as compared to other types.
These blockchains are generally controlled with an oversight performance handled by a public blockchain and are done by a single organisation. They perform the transactions together. There are several examples of hybrid blockchains such as IBM Food Trust, developed for improving the efficiency of the complete food supply chain.
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Blocks : Blocks are a type of dataset that stores important information in the form of a ‘block header’. This block header helps the user to verify its neighbourhood. We can define this information stored inside as:
The rest of the block comprises transactions that are set during the time of data mining. There are different blocks present according to their functionalities in the blockchain architecture. They are described as follows:
Orphan Blocks : These are not known to the node, basically the parent block.
Side Blocks : These are described as those parent blocks which are absent in the current blockchain.
Main Blocks : This block extends the current blockchain to the user.
Transactions : Transactions contain the address of the sender, the recipient, and also of the respective values. Transactions are collated and then sent to all the nodes present in the blocks. Each transaction is processed individually at every node.
This type of continuous movement of the data combines to build the blockchain architecture. Every transaction will have its own input and output which can either be single or multiple. The input is defined as the reference value in the previous transaction whereas the output sums up the amount as well as the address.
Mining : Just like the process of credit card networks, mining works in the same way. Each transaction that is present waits in the queue and is re-checked depending on its values. If the transaction is marked as correct, it then moves forward towards the respective blocks and gets a green signal in the network.
The traditional blockchain architecture uses a client-server network. This network has a server that retains all the necessary information together which makes it easy for updation. As this system works as a centralised database, everything is controlled by administrators who decide whether to grant permissions or not.
When we talk about distributed blockchain networks, every participant that is present in the network approves, maintains, and even updates the new entries in the system. Not each individual controls the system but it is controlled by everyone present within the network of blockchain. It is ensured that all the procedures and records help in contributing to the security of the network as well as data validity. Therefore, it is not mandatory for the parties to trust each other and reach a common conclusion.
Therefore, we can conclude that the blockchain is known for its decentralised network and distributed ledger for both public as well as private transactions for a P2P network. The network consists of few computers where data cannot be changed without the permission of the complete network. The complete network includes each and every system that is present.
Below are the steps to build a blockchain network.
A user needs to understand whether the blockchain he is going to follow satisfies his current problem or not. It is done by researching properly and understanding the problem solving based on the decisions being made to choose the blockchain. There are 3 main use cases that a user can follow. They are described below:
The next step is choosing the right consensus mechanism for the requirement. There are several mechanisms for the same. (POW) Proof-of-Work is the most popular one. Though, this method is not very pleasant to use for businesses that require a strong hardware system with a huge amount of energy for successful implementation. There are several other mechanisms as well such as Quorum, Hyperledger, Corda, etc. and all of them can be easily implemented on distributed ledgers. Hence, the only task is to look for the right consensus mechanism available that fits the requirements of the work in the most ideal way.
The next step for the user is to choose the right platform to build his blockchain network. There are a lot of options available for this step as well and all of them have something unique in them to offer to the user. Some of the well-known platforms are Ethereum, Corda, Hyperledger Fabric, Quorum, BigChainDB, etc
After choosing the right platform for your business need, the user needs to design the appropriate nodes. A user can design a closed network where permissions are granted only if the user follows KYC rules. We have discussed that the network that does not require permissions are public networks and they allow anyone to join their network. The private networks do not allow everyone to take advantage of their network nor do they share any information with everyone. Therefore, a user can design the nodes as public or private depending on the requirement.
Now is the time to create an instance for the blockchain network after designing the node. A user can create an instance on any platform that he wants. Various aspects can be configured here such as native assets, key formats, asset insurance, atomic exchange, etc.
Now the user has an instance that is actively running, the need is to handle the application interface. The Blockchain network has preexisting APIs for the platform that the user has. APIs help in performing functions related to audits, generating key pairs, and addresses, retrieving data and storage, creating smart contacts as well as data authentication.
Now is the time to create a frontend setup after completing the backend. The maximum information a user has to provide is the admin keeping into consideration that it should not overwhelm the interface with unrequired information. Languages such as PHP, Java, Python, HTML, etc can be used for designing the front end successfully.
The setup is now complete and the user only needs to finalise the setup of the blockchain. The steps make sure that the blockchain is actively running and the mechanism is also up to the mark. Later, the user can add the latest technology to his blockchain which can include cloud, artificial intelligence, etc.
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As we know that blockchain is the upcoming technology in the world, a person needs to have certain skill sets in order to be a successful blockchain developer. Below are several skills that a person should master before pursuing blockchain development:
frequently asked Blockchain Interview Questions
In this article, we have discussed Blockchain and its architecture. The article explains the components of blockchain architecture along with the different types of blockchain architectures. Blockchain is basically a kind of digital ledger that helps in maintaining transactional records. We have also discussed the key characteristics of the blockchain architecture and the skills required to build a blockchain architecture.
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