Mini Crypto Program Part 3 || "Understanding of Blockchain", by @otk

Hello everyone, I will be answering my questions on the understanding of blockchain as asked below. Hope you find it thrilling.

1. What do you know about blockchain?

2. Describe one type of blockchain.

3. Explain the advantages and disadvantages of the type of blockchain you choose.

4. Visit Blockchain Demo, and what did you learn from that page? (screenshot required)

5. Explain the advantages and disadvantages of using blockchain technology.

Conclusion!

1. Blockchain is a record or registry of transactions and information shared passed out digitally to all the communication points within the network, these information cannot be edited or tampered with and are constantly kept up to date and accessible by all communication points which are all linked to the blockchain network. These communication points are called nodes and could be any network device that could communicate with other network devices all linked together in the blockchain network. These features of the blockchain network make it safer than other systems when it comes to carrying out transactions as there is transparency and full knowledge of all transactions carried out as information is accessible by every single node or individual network device situated within the network and no permission needs to be taken from anyone to access the informations regarding transactions made, such as names involved in the transactions, dates and even amount transacted. And so all the activities in the blockchain are decentralized and distributed in encrypted patterns.

Parts of a blockchain

A blockchain is normally composed of three parts: Block, Node and Miner .

• BLOCK
  A block is where all the information of the transactions within the blockchain is stored as data and are interconnected with other blocks within the network.
  Each block has a unique hash assigned to it which is preceded by a nonce to ensure it cannot be edited. A hash is the building block of the blockchain network composed of strategic numbers and letters (beginning with a zero) of a particular length that indicates if the data present in a block is valid. A hash is formed in details with the data present in the first block thus leading to the encrypted and non-tampering characteristics of the blockchain, but if the data in a block is altered, a new hash would be generated.
  A block is therefore composed of its data, hash and a nonce.

• NODE
  Nodes are interconnected means of communication, which are network devices, that are kept up to date within the blockchain network. A node stores blocks and transmits new transaction data from its new blocks to other nodes within the blockchain network to keep them updated.

• THE MINER
  The miner is an actor with the sole aim of introducing new blocks into the blockchain network. This helps with the updating of the nodes of the blockchain network after a successfully completed transaction.

2. Describe one type of blockchain.

There are four different types of blockchain; public blockchain, private blockchain, hybrid blockchain and blockchain consortium

For this assignment I will be describing the public blockchain.

PUBLIC BLOCKCHAIN:

The public blockchain is a decentralized blockchain that is not put under any authoritative body, where transactions or information in the network are not controlled by any person or financial body. There are no restrictions from joining the blockchain by any member of the public and all nodes within the blockchain network have full access to all the transactions and data being carried out in the network. All transaction data from anyone within the blockchain is accessible to any and everyone, this transparency within the network helps in making it one of the most used type of blockchain.

3. Explain the advantages and disadvantages of the type of blockchain you chose.

ADVANTAGES OF PUBLIC BLOCKCHAIN

1. Since this blockchain is open to the general public, the number of individuals within the blockchain would be large bringing a larger community of people together for larger areas and forms of transactions.
2. Transactions within the blockchain are always updated across all the nodes within the blockchain and are constantly accessible by all, hence transparency in the network.
3. It is decentralized so no third party agencies need to intervene in the activities of the running blockchain.

DISADVANTAGES OF PUBLIC BLOCKCHAIN

1. Although having a large number of people in the blockchain is an advantage, too much network activities in the blockchain would cause the blockchain network to be slower than other types of blockchain.

2. As the blockchain is open and available to all members of the public, cases of fraud would be on the rise as a fraudster could invade the network with anonymous identities and defraud other users.

4 .Visit Blockchain Demo, and what did you learn from that page? (screenshot required)

On opening the page Blockchain Demo I was first visited with the home page as thus:

_{Screenshots taken from Blockchain Demo}

And from what I learnt I know that a blockchain is made up of series of blocks transmitting the same transaction data with each having unique hash assigned to them while still retaining data of the previous hash with unique nonce.
And looking at the page I saw five different blocks of a blockchain each having five different nonce, previous hash and hash all valid because they all have a hash beginning with series of zeros and are similar in length.

Block 1:

_{Nonce: 11316
Data:
Previous-hash: 0000000000000000000000000000000000000000000000000000000000000000
Hash: 000015783b764259d382017d91a36d206d0600e2cbb3567748f46a33fe9297cf}

Block 2:

_{Nonce: 35230
Data:
Previous-hash: 000015783b764259d382017d91a36d206d0600e2cbb3567748f46a33fe9297cf
Hash: 000012fa9b916eb9078f8d98a7864e697ae83ed54f5146bd84452cdafd043c19}

Block 3:

_{Nonce: 12937
Data:
Previous-hash: 000012fa9b916eb9078f8d98a7864e697ae83ed54f5146bd84452cdafd043c19
Hash: 0000b9015ce2a08b61216ba5a0778545bf4ddd7ceb7bbd85dd8062b29a9140bf}

Block 4:

_{Nonce: 35990
Data:
Previous-hash: 0000b9015ce2a08b61216ba5a0778545bf4ddd7ceb7bbd85dd8062b29a9140bf
Hash: 0000ae8bbc96cf89c68be6e10a865cc47c6c48a9ebec3c6cad729646cefaef83}

Block 5:

_{Nonce: 56265
Data:
Previous-hash: 0000ae8bbc96cf89c68be6e10a865cc47c6c48a9ebec3c6cad729646cefaef83
Hash: 0000e4b9052fd8aae92a8afda42e2ea0f17972ea67cead67352e74dd6f7d217c}

I then input data in the first block, a word "star" and this invalidates all the blocks in the blockchain as they turn red from their previous green colour as they no longer bear the same data. Their nonce remain the same but the hash does not begin with zeros. Because altering data in a block then invalidates the block and the subsequent blocks after it .

_{Screenshots taken from Blockchain Demo}

To validate the blocks I input the same data in the first block "star" to other blocks and click on mine and all blocks thereafter became validated.

_{Screenshots taken from Blockchain Demo}

This then causes the nonce to change and the hash changes too and then begins with zeros meaning it is valid.

5. Explain the advantages and disadvantages of using blockchain technology.

ADVANTAGES OF BLOCKCHAIN TECHNOLOGY

1. Due to the decentralized nature of the blockchain system, no third party agencies or company can intervene in the transaction activities running in the blockchain, hence there is direct communication between the user and the network without needing to ask or take permissions, making information exchange faster and saving time.

2. Blockchain networks are interconnected with all the nodes in the network and transactions are always updated and as such constantly accessible by everyone in the network from wherever they are. This brings about transparency in the network and easier and faster transaction with the network.

3. The interconnected block networks and the encrypted non editing characteristic makes blockchain very safe from hackers as commands can't be edited hence assets are kept safe, creating a platform where trust could be maintained.

DISADVANTAGES OF BLOCKCHAIN TECHNOLOGY

1. As data written in the blocks can only be written and not reversed, once a wrong transaction has been made, it is impossible for the funds to be transferred back to the sender.
2. Losing the access key of one's blockchain account leads to permanent loss of the accounts and the assets within as there is no way of regaining the lost key.
3. The blockchain network could be very slow atimes based on the population of nodes in the blockchain and the capacity of the network.
4. Blockchain technology is not totally secure from the attacks of con-artists and fraudsters and users need to understand this.

CONCLUSION

Blockchain is an advanced technology which is secure and fast and could be used in the daily transactions of users. It has good characteristics one of it being it's transparency, but users should also keep in mind that the blockchain is not completely fraud-proof and should know more about blockchain network in other to reduce the probability of being defrauded.

Thank you @liasteem for this wonderful assignment and the opportunity to be a part of it. And I know it would be of good impact in my transactions.
I'm inviting @destinyjoseph, @bensonsomto and @chibuokem to participate in this program.