Talking about blockchain, it is considered as a growing list of records, which is also called as blocks, which are all linked through the cryptography technology. In general, here, each block contains the cryptographic has of blocks and transaction data. There is no doubt that blockchain has gained momentum these days. Do you know what the major reason behind this is? Well, the reason is it becomes a backbone of most of the cryptocurrencies, including the Bitcoin, On the other side, some leading banks, as well as governments, are now gradually adopting blockchain concept for their transaction. In fact, the potential and applications of the framework are great. Some blockchain experts have predicted that this can change the way the transactions are made. Now, let’s know some more blockchain info.
What do you mean by blockchain?
When it comes to basic Blockchain Tutorial, you should always start with a better understanding of blockchain. As discussed above, it is considered as a chain of blocks that carries information. This technology aims at the timestamping of the digital documents. This way, it can prevent tampering with the documents. Another purpose of this is to prevent the double record problem without employing any central servers. It is generally used to enjoy the secure transfer of different items, for example, property, money, important contracts, and more. When you have this, there is no need to take the help of third-parties like the government and banks.
Talking more about it, it is a software protocol. You can’t use it if there is no internet connection. You can also call this “Meta-technology” as it can affect other different types of technology. On the other hand, sometimes the term is used for the Ethereum Blockchain and Bitcoin Blockchain. So, keep this blockchain information in your mind. We will begin this blockchain tutorial for beginners by exploring and understanding the issues with the current banking system.
What are the issues the current banking system has?
Most of the current banking systems have some kinds of issues. Some of them are:
· Transaction fees are very high
For a better understanding, let’s take an example. Suppose one party (A)sending USD 100 to another party (B). But the transaction must pass through a third party, for example, financial service provider or a bank. However, to complete the transaction, the third-party deducted 2 percent as the transaction fees. So, here B will receive USD 98. Well, you might be thinking that this is not a big amount. But, when you send USD 200,000, then your transaction fees will be around USD 4000. Well, this is a huge amount.
· Double spending
This is generally considered as an error in the digital cash system. Here one digital token is used to for multiple time. Don’t get confused with this, as here is an example for you. Suppose “A” has USD 1000 in the account. “A” carries out to transaction of USD 500 and USD 700. In general, the transaction would not complete as “A” has not enough funds. However, he can complete them by duplicating the digital token. This is called Double Spending.
· Account hacking and internet frauds
Most of the banking systems are vulnerable to hacking. Hackers can hack internet banking, and your debit or credit cards. Let us present you a case. In the year 2016, India faced around 14,820 fraud cases related to this. The total amount was around Rs. 78 crores. Well, across the world, it is still happening.
· Financial crashes and crisis
From the year 2007 to 2008, some banks and other financial institutions borrowed a huge amount of money and then lent that money to people who could not return the money. This incident had created a major financial crisis and caused losses the worth of USD 11 Trillion across the world. It has been seen that most of the banks crashed following the internal frauds. Remember that the third-party system is established on the middle man’s blind trust.
These are some of the reasons why everyone needs a system that can overcome these issues. This is what blockchain does.
How does blockchain help in solving these issues?
Here are some of the major ways through which the latest blockchain technology prevents issues.
· A decentralized system
If you go through the blockchain information, you will find that blockchain follows the “Decentralized” approach. On the other hand, banks follow a system which is governed by federal and central authorities. Under this system, everyone becomes accountable for the downfall and growth of the system.
· Public ledgers
Talking about the ledgers, this record all the details of different transactions related to the blockchain. Those ledgers are open, and everyone, who is connected with the system, can access the ledgers. When you join the blockchain network, you can download all the transaction details. Well, the ledger is open, but the person related to the transaction remains confidential.
· Proper verification of each transaction
In blockchain technology, every transaction is properly verified analysing the ledgers and transaction signals sent after some time. As this system involves advanced hashing algorithm and complex encryptions, there will be no double-spending issues.
· Less or zero transaction fees
In general, in the blockchain system, there will be no transaction fees. However, some particular blockchain transactions will charge less amount of transaction fees. But don’t worry as these transaction fees are much lower than the transaction fees charged by banks. However, if you want to do a priority-based transaction, then you can pay additional transaction fees.
By reading this piece of blockchain technology tutorial information, you must have understood the basics of the blockchain system. Now, let’s explore some blockchain information.
What are the versions of blockchain?
The detail about the versioning of blockchain is explained below.
· Blockchain 1.0- Currency:
Creating money by solving different computational puzzles was introduced in the year 2005. Hal Finney was the first person who introduced the cryptocurrencies concept with a distributed ledger system. This enables different financial transactions based on this technology to be carried out through Bitcoin. Bitcoin is used as an Internet of Money.
· Blockchain 2.0- The smart contracts
With time, Bitcoin developed some issues like poor network scalability and wasteful mining. So, to prevent such issues, the smart contracts concept was introduced. Speaking about it, smart contracts are the small computer programs of the blockchain. The programs executed automatically and checked different processes, such as verification, enforcement, or facilitation. The major advantage of this version is, smart contracts are impossible to hack or tamper. A perfect example of a smart contract is the “Ethereum Blockchain.” This offers a highly secure platform for developers to build blockchain network-based applications.
· Blockchain 3.0- The DApps
This is also called the decentralized application. This version of blockchain utilizes decentralized communication as well as storage. The backend code of the DApps runs on a decentralized peer-to-peer network. It may have the frontend code that can be hosted on decentralized storages, for example, Ethereum Swarm.
How does blockchain transaction work?
Step-1: Some people requests some transitions. They may include contracts, cryptocurrencies, records, and more.
Step-2: Then, the requested transactions are now broadcasted to the P2 networks using nodes.
Step-3: Now, the nodes will validate all the transactions and status of the users using the particular algorithm.
Step-4: Once the transactions are done, the newly created blockchain will then be added to the existing blockchain for a permanent period of time.
What are the variants of blockchain technology?
This is one of the major questions in the Blockchain Tutorial. However, the major variants are:
Public: Here, all the ledgers can be viewed by everyone using the internet. It enables you to verify and easily add the blocks of transactions to the blockchain. Public networks offer some rewards to people when they join and are completely free for use. That means anyone can utilize the public blockchain network.
Private: As the name suggests, it is for a single organization. The major feature of private blockchain technology is it lets the only particular staff of the company see, verify, and add the blocks. But everyone can view the ledgers but can’t make any alternation.
Consortium: In this type of blockchain variant, only a particular group of companies can add and verify the blockchain-based transactions. Under this, the ledger can be limited to some selected groups. It can only be managed by Pre-authorized nodes.
What are the key areas of blockchain?
Bitcoin is one of the best and popular implementations of the blockchain. The blockchain technology fixes three major things that the internet can’t. They are:
- Value: With the blockchain technology, you can easily create value on the different digital asset. Those values can be controlled only by that particular assets’ owners. It develops the unique assets which can be transferred through the internet, and there is no need to take the help of third party.
- • Trust: This modern technology enables you to assign ownership of the different digital assets very securely. Besides, you can easily track who are controlling the assets. In other words, it can be said that blockchain develops a highly secure permanent as well as an unalterable record about the owners of the assets. To preserve or secure the integrity of the information, it utilizes advanced version hash cryptography.
- • Reliability: One of the best things about the blockchain is it can distribute the workload among multiple computers across the world. The blockchain technology offers the maximum level of reliability as it follows a decentralized structure, eliminating the single point of failure issues.
- What is Ripple blockchain?
- Speaking about ripple blockchain, it is developed by Labs Inc., a United States-based technology company in the year 2012. This is one of the most popular RTGs- Real-time Gross Settlement system, remittance, and currency exchange networks. The best feature of ripple blockchain is its build structure. Come equipped with a highly secured open-source protocol; this blockchain supports token of commodities, cryptocurrencies, fiat currency, and more.
- What do you mean by EOS blockchain?
- EOS blockchain or also called EOS.IO, is a unique type of blockchain protocol which is powered by the native cryptocurrency EOS. This unique protocol uses every component of a real computer covering GPUs, CPUs, hard disks, and RAM are all equally distributed among EOS cryptocurrency possessors. This operates as a smart contract platform; it is a decentralized operating system that focuses on the decentralized application’s deployment using the decentralized autonomous corporation model. It eliminates transaction fees and can carry out millions of transactions at the same time.
- What are the different types of blockchain attacks?
- This is a major Blockchain Info that you should know. To understand this, we have listed down some major attacks related to the Bitcoin system.
- 1. Finney attack: In such an attack, the miners are the attackers. Here the miners mine the block with the transactions but don’t release it to the system. Then they use the same coins for the next transactions, and after that, they release the pre-mined block. What will happen then? Well, the other miners will reject the second transaction. To eliminate such an issue, the seller should wait for around 5 to 6 block confirmations to release the goods.
- 2. Race attack: Here, the attackers send the same coin to multiple vendors in rapidly, maybe trough two different machines. So, if the vendors don’t wait for the confirmation and deliver the goods, they will later realize that all the transactions were rejected during the mining. So, what is the solution? The solution is, the vendors must wait for around one confirmation and send the goods.
- 3. The 51% attack: Under this kind of attack, we generally assume someone owns 51 percent of computing power. Here, the attackers attack the private blockchain where the individual double-spends the cryptocurrency. As the individual owns the major portion of computing power, he/she is guaranteed that the private blockchain will be longer than the “honest” network. So, the individual releases the private blockchain in the system, and that makes the transaction recorded earlier in the “honest” blockchain invalid.
- What is the Blockchain info wallet?
- Speaking about the blockchain info wallet, it is just like other digital or E-wallets that let the users store and manage cryptocurrencies. Here one user can manage two major types of cryptocurrencies, i.e., Ether and Bitcoin. A blockchain wallet is offered by blockchain. Blockchain. Info is the leading software company for different digital assets. Apart from storing coins, it also comes with different tools for the developers. Besides, it lets the users view real-time transaction data to understand the status of the digital economy. The company’s software has supported more than 300M transactions. Besides, it has empowered users from more than 130 countries throughout the world. They are now enjoying a fast and cost-free transaction.
- How to create a Blockchain info wallet?
- Creating a blockchain info wallet is quite easy. Here is the process of creating an online blockchain. Info bitcoin wallet.
- 1. Visit the blockchain.info site
- 2. There you need to click on the option named “Get a free Wallet” located on the top right corner.
- 3. Once you click, you will be taken to the page named “Create your Wallet.”
- 4. Now, you need to feel out all the required details, such as email id and create a password. Make sure you have provided the email id that you are using.
- Once you are done with creating your wallet, you will get your Wallet ID. Keep your Wallet ID safe. The reason is you can only access the blockchain info wallet using that ID.
- How to send and receive Bitcoin using blockchain wallet?
- Requesting and sending Bitcoin using a blockchain.info wallet is also very easy. When you open your wallet, on your dashboard, you will find two options, i.e., Send and Request.
- When you choose the option “Send,” it will see a popup window where you need to provide correct information. On the top side, you can select the currency that you want to send. Then put the address to whom you want to send the fund along with the required amount. Then you need to choose the transaction fees from Priority and Regular.
- To request an amount, you need to follow the same procedures. But for requests, you need to select the required amount you want and then select next. Then a link will appear. You can use the link to request a person or company to pay.
- Why should you utilize a blockchain.info wallet?
- As discussed above, the blockchain info wallet is a popular web-based wallet. But it is not an ideal option for people who are looking for long-term basis cold storage. It is perfect for users who use their coins regularly. This is also ideal for traders or individuals who use their coins for shopping. The wallet is very easy to use and ideal for new users. It comes with security features. You can trade Bitcoin for Ether.
- So, these are some major and basic blockchain info that you should keep in your mind if you want to get into the blockchain technology. However, take the help of the internet to know more about Blockchain and Blockchain Tutorial to utilize this at its maximum level.