Crypto Academy / Season 3 / Week 6 - Homework Post for @stream4u - Blockchain Homework by @hadassah26

Good day beautiful steemians, welcome to another week of steemcrypto academy, I am @hadassah26, and this is my week 6 homework for professor @stream4u on: Let's Open The Blockchain.

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"1. What is Blockchain and What are the types of Blockchains / Explain in detail the types of Blockchain?"

What better way to transact feely, trustless, immutably and without any third party between you and the person at the other end. Welcome to the world of blockchain.
What is the blockchain?

Blockchain ≡ Database

To properly understand blockchain, we should understand what a database is.
A database which is an electronic storage system just like our manual book/ledger storage systems. A database stores information saving them on computer memory examples including excel spreadsheet on our computers, or good docs on our mails.

But with a fast growing world population and need for a more trustless database system free of any central authority, data storage and technology has to be changed, more in our financial system, the need for financial inclusion through the internet to be made possible to every part of the world.

Block chain technology through cryptocurrency has made this very possible with the first introduction of the Bitcoin in 2009 by Satoshi Nakamoto.

But there should be more to this technology, Security should be key, transparency should be priority, and democracy, not letting only one user have total control over the system.

Block chain therefore uses the “fill block”, “lock block”, “create new block” and “chain new block to previous block” technology. Allowing users view previously confirmed blocks and be part of the currently being filled block without just being able to change/manipulate previous blocks no matter their social status or political power.

There are Four types of blockchain, namely:

1. Public blockchain:
This is a blockchain for the people, and even sometimes by the people. The public blockchain allows basically anyone with internet access to be part of its process, major examples being the Proof of Work (POW) Bitcoin blockchain and Proof of Stake (POS) Etherreuim blockchain.

The public blockchain gives anyone the authority to be part of its block creation removing any central authority and letting transparency key.

2. Private Blockchain:
The private blockchain on the other hand is a centralized blockchain, here the blockchain is owned by a company or organization or even the government, only they have the power over the blockchain and can manipulate it however they want. A private blockchain is more like a google doc file share among a circle of friends.

3. Hybrid blockchain:
As the name sounds, its like a mash-up having both private and public characteristics.
Here the information and authority over the blockchain is available to some certain people, while others may just have the ability to see what is just going on it.

The Hybrid blockchain can be set up by say a supply chain company such that any one can view the transactions of any good, but only authorized personnel or top managers have the authority to act on the blockchain.

4. Consortium blockchain
This looks like a hybrid blockchain, only that it has a more complex authority system,
In the consortium blockchain “authority” is now shared among groups, say like an industry no longer just a company as the hybrid blockchain, the consortium blockchain therefore feels more like a public blockchain than the hybrid blockchain.

The Consortium blockchain can be used in political issues where different parties have the authority to vote in power at primaries, but on the long run everyone sees what is going on publicly.

"2. What are the benefits of blockchain?"

By now, we know that blockchain is like ledger in accounting, keeping all the important transactions records anything of value. The following are the benefits of using blockchain

1. Cost reduction: The core idea of any business is making profit, and reducing costs. This which has been made feasible regarding financial transactions and database management in general using blockchain technology is a big win for it. Block chain technology in finance makes transfer of currency to any part of the world seamlessly but more way cheaper.

2.Speed and increased efficiency: We had all been so used to the conventional slow banking and other centralized financial system they became normal to us, but with the introduction of blockchain technology, more to the financial sector, we see speed of international transactions that are mind blowing. Individuals can now send and receive money like they are saving and sending a file with on a github project.

3. Easy to Trace: Traditional conventional financial systems have made us leave tracing of funds to a centralized body eg the banks majorly because of the complicated routes it must have followed.
This which has been used in fraudulent activities can now be made easily traceable with the blockchain technology. Transactions can now be traced from first sender to last receiver through the block-explorer.

4. Beauty of Transparency: Traditional conventional financial systems have been very secretive on how money is being transacted within the system. This way there is more than enough room for fraudulent activities and even laudering. With blockchain technology transparency is very easy within the system and one can view whatever is going on to know necessary actions to take.

5. Advanced Security: Security setup on blockchain technology has become top notch, One basically has to be stronger than the whole system to break the system( which is technically not feasible). This way we are sure our funds transactions and data in general is stored securely and not being manipulated by any one.

"3. Explain Blockchain Distributed ledger."

Imagine if all of us were working on one project, say like a github project and we all had access and authority on to the project code. That code becomes a “Distributed” to all of us, this is the blockchain distributed ledger works, only that once a code is saved, it becomes immutable and the code is not controlled by any one central body.

Distributed ledger is therefore a shared database realtime across multiple nodes/networks such that each node can access, interact and be part of decision making on the ledger/database.

Blockchain distributed ledger as is a distributed database system built with the core values of Transparency, security, and unanimous. Also being immutable and trustworthy the blockchain distributed ledger is a public ledger such that no central authority has control over the network and any one so with access to internet connection can be part of the decision making of the ledger.

"4. What Is Blockchain Double Spending"

Double spending is simply spending twice. this which is usually not possible in centralized systems since physical money paid from you to a merchant is handed over to him before goods are released, or in the case of internet transactions your transactions already shows you have paid that money to the merchant and it is held in the central network before confirmed and reflected on his transactions and money is moved.

In crypto currency, since it is a public blockchain network and so its takes a while before transactions are filled in the block, this makes some people feel they can now resend that same cryptocurrency before it is fully filled on the block therefore trying to confuse the network and double spend the coin.

Bitcoin tries to tackle the double spending problem by just confirming only one or none of the transactions regarding that coin and individual as at that certain time. This way the bitcoin network can counter double spending.
More on double spending shall be shown below:

"5. Practical + Theory, Visit Blockchain Demo and check section Blockchain, then explain in detail how Blocks Hashes Work in Blockchain"

The block hash technology is a very wonderful technology which tracks any little change on the blockchain. It keeps track of whatever transaction that goes on within the blockchain.

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Normal harsh to Data on the blockchain

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Changed harsh due to changed Data.

So for any block on the blockchain, there is a NONCE, Data, Previous harsh, and Harsh entry box.
With the Harsh entry box always changing characters but all characters having the same character length on every change of the NONCE, Data or Previous entry boxes.

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Normal block on a blockchain

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Blockchain shows red (Unmined) due to changed data on the blockchain.

This way everyone can know when there is a change in any entry box of the current blockchain by a change in the harsh.

What will happen when any middle of the block gets changed?
On a change of data on a previous block, there becomes a change in their harsh and therefore also change in the harsh of concurrent blocks.

On every mined block, the harsh starts with 4 zeros, “0000”, and a NONCE that has a harsh relative to the data and the previous harsh.

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Middle block’s Data changed.

So on any change on previous blocks, it is remined to give the NONCE that has that harsh based on the changed data and so also subsequent blocks are therefore remined to give their NONCE that will give that harsh based on their changed “Previous Harsh”.

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Now mined blocks.

"6. What Is Race Attack in blockchain? OR What Is Finney Attack in blockchain? OR What Is Vector76 Attack in blockchain?"

The race attack is simply a time/confirmation attack, but not to the block but to merchants or receiving victims generally.

The race attack occurs when a malicious individual sends a coin to one individual say a merchant, then he also quickly sends that same coin to say himself or another person.

On the merchant not fully confirming the receipt of that coin, he may release goods or services to this malicious individual. The malicious individual can then recover his money and the goods or service leaving the merchant in loss.

This reason why the race attack can occur is because of the time lapse between bitcoin confirmation. Unlike the instant transactions on services and goods, Merchants are soon forced to transfer the services before fully confirming the transaction. The malicious individual on the other had had sent same amount of cryptocurrency to the network say to himself at thesame time, therefore the network may now confirm his own transaction making the transaction to the Merchant invalid.

Other types of Blockchain attacks are:

What Is Finney Attack in blockchain?
This attack involves a miner and a merchant, here the miner sends coins to his wallet from another of his wallet, both which he has control over.

Now when the miner sends a coin to a merchant the merchant may not detect a double spend error and release coins. The miner now broadcasts his own transactions to the blockchain making that transaction to the merchant invalid. This attack was prescribed by Finney as the Attack was named after him.

What Is Vector76 Attack in blockchain?
This is simply the joining or combining of two previous attacks. In this kind of attack, the malicious miner creates a fake block which may include a transaction to the merchant. This block which he then sends to the network while sending himself a same amount of that same coin to himself.

With the network trying to fully confirm the fake block, the merchant sends the goods or service, and then the block is found invalid by the network. The malicious miner has now received both the goods or service and the coin used in transaction.

"7. Limitations/disadvantages of Blockchain."

We have talked about the limitations of block chain , now we need to focuse on the limitation of the block chain. there are some limitation that makes blockchain not the right choice. and they are as follows.

• Still Growing technology: The blockchain technology is still at its early stage and evolving, so to investors it may face future hurdles, or maybe strict regulations. This way people still are skeptical as making full use of this technology.

• Immutability: though a good strength to blockchain technology can also be a limiting factor, say for example blockchain for social media as the steemit platform, if someones ideology changes over time and he needs to rectify his ways, his track record cannot be cleaned and he can still be judged for past posts or transactions.

• Need for Pseodorandom Keys for logging in: Blockchain technology needs individuals to sign in, but with the idea of everyone having his/her own independent authority to the chain without reference to a central authority, there is need for keys to sign into the blockchain. This which can be hard for some users to store or memorize is another limitation of blockchain technology.

• Lack of Central Authority/Rules Enforcing Body: With blockchain technology being a one man taking care of his security technology, we see that there is no central authority to report to incase of an individual attack. Also are cases of error in transaction and no central body to report to for rectification and refunds.

Conclusion(Overall understanding of Blockchain.)

Blockchain is a ledger that holds many information. A block is a single unit of the blockchain that stores a certain amount of information usually financial as we are treating in crypto.
They are 4 types of blockchain which includes the private blockchain, public blockchain, hybrid blockchain and consortium blockchain.

The blockchain technology has proven to be very important in our current day to day transaction with benefits likes security, cost reduction, transparency, speed, efficiency and so many more. but it also has its own limitation include lack of awareness, it uses excessive energy, a place criminals think can habit their businesses.
The blockchain industry is an exponentially growing industry and we are happy to be currently part of it.

Thanks

CC
@stream4u.