Crypto Academy Season 3 Week 6 Homework Post for @stream4u Open Blockchain

We are in an advanced technological era computing power in the blockchain is used today to revolutionize the financial sector a decentralized financial open-source blockchain technology is presented for everyone around the globe to have access to decentralized financial services using blockchain open to the public for a transparent review of all executed transactions to be reviewed by all users this has made blockchain more secure as it deals more with open-source where developers can add new changes to improve the network, functionality without doubt blockchain technology is a major game-changer in the world where we all can tap into the system and make modification on how we run our daily transactions.

In the old traditional system of financial services, centralized/financial users stick to using books known as record books to keep all transactions activities it turns out a little attack in such organizations can expose these books to lots of damages also a user can easily go over and make modification on such record books, keeping these book in a store for long can also invite natural attack like rusting these are all are some flaws found in bookkeeping with changes in technology computers were introduced making it possible to store such financial records on different servers this also has its flaws as users can make unauthorized modifications to the system control users transactions and information.

With the flaws in centralized services, a new system was introduced known as blockchain containing strings of blocks connected to a block that cannot be modified or altered by users, it's like a record book in form of the decentralized ledger that keeps all transactions in the blockchain.

In general terms, blockchain is known as the record-keeping advanced technology behind decentralized networking systems like bitcoin networks, it can also be termed as an open-source distributed ledger used to record transactions between different users

Storing a database in the blockchain in form of a transaction ledger makes it "immutable for any third party users to alter any changes on the blocks once a transaction is sent it's impossible to reverse it a new block is formed on the blockchain once the old block is filled which makes it possible to form a new string of block connected to the old block this process makes it have the term block and chain by connecting the old and new formed block a continuous transaction block which is unbroken will inevitably form every time a new string of block is produced on the blockchain network.*

Blockchain structure and transaction process

A blockchain is a form of database which are a collection of information that can be stored electronically in a computer for other users to access unlike a database which can be in the form of private information meant for a specific group of people blockchain is open-source information that can be accessed by everyone connected to it block node or explorers. the blockchain is also structured in a way that new blocks can always be formed once the previous block is filled this means every block has specific block storage capacity

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The blockchain transaction process works in such a way that let's say

• user A entered a new transaction using a bitcoin address.

• The transaction will be transmitted to a peer-to-peer computer network distributed across the world.

• these computer networks solve the transaction problem (mining) in other to validate or confirm the transaction.

• After some few minutes/seconds, the transaction is completed

• The blocks for the newly confirmed transaction will form a link with the previous block

• All the above processes are what form a blockchain transaction process all these processes will be a continuous string that will serve as what is known as the blockchain.

Importance of blockchain

The very important goal of blockchain is for information to be distributed among users seamlessly without any third party monopolizing such information which means information/transaction can not be modified or altered by any user.

Transparency immutability scalability of data, and information are all important goals behind blockchain technology for the world to experience a true decentralized monetary system.

Types of Blockchain

There are different types of blockchain we have today

• Public blockchain

• Private blockchain

• Consortium blockchain

• Public blockchain; as the name implies public blockchain it's an open-source blockchain network that can be accessed by the general public, this makes it possible for developers to make important changes and modifications to the block protocol. a distinct feature of the public blockchain is it's not controlled by anybody making the block data very secure and immutable. Examples of public blockchain include bitcoin and litecoin.

• Private blockchain; this is opposite to the public blockchain where users are invited to participate in such blockchain activities authorities control the affair of such blockchain making important decisions that can be used to govern such network.
  private organization using blockchain technologies use a private blockchain to store information and data that can only be accessed by them.

• Consortium blockchain; This type of blockchain is also known as hybrid blockchain it contains both public and private blockchain nodes the public node can be used to control transactions that can be visible to public users and its private node can be used for recording special information.

• Security; this has been a major challenge in the financial sector where multiple attacks have bankrupt some financial firms today with blockchain technology this challenge can be tacked and minimize the risk of exposing such firms to unauthorized breaches and attacks blockchain security strengthen with the use of PoW making mining validation to make blockchain network more secure against the threat.

• Transparency; with the help of blockchain users have been able to perform business transactions without any intermediate parties the use of smart contract introduced in ethereum blockchain have been a systematic means for business transaction and have increased users trust.

• Traceability; blockchain technology makes it possible for users to trace/track transactions and it also makes it possible for such transactions to be viewed publicly.

• Immutability; with blockchain technology information and data have been stored that made it impossible for editing or modification also transactions once executed can't be reversed.

A distributed ledger as started earlier the old systems of record-keeping where by using manual book recording process which consumes time and energy and computers were introduced to make this process easier these systems have it flaws which is being prone cyber attacks

With a decentralized distributed ledger these attacks are countered using blockchain technology

Therefore, a distributed ledger is a database shared in a synchronized manner across multiple users this database can be accessed by the entire public the only limitation about a centralized distributed ledger was it can be subject to cyber-attacks and it's also controlled by certain groups of people controlling the transaction system of such ledger.

Blockchain distributed ledger was introduced to make this old system obsolete making it possible for the entire public to view/have access to all transactions, activities executed on the blockchain it also makes it possible to eliminate third party access to validate users transactions with distributed blockchain ledger no need to users to worry about their sent transactions as it will be processed automatically.

Digital double-spending has been a major concern that has drawn major concern in the decentralized system since there is no central authority that is authorized to check the authenticity of any digital currency there are possibilities malicious users can duplicate a particular digital currency and spend it and still retain the original currency.

Therefore in general terms of blockchain, double-spending has to do with an act or process where a digital currency could be spent twice.

Double spending in the blockchain occurs when there is a disruption in the blockchain it can also occur when a user can control 51% of blockchain mining processing power with this such user can be able to reverse any bitcoin transaction and also confirm a transaction.

How Bitcoin handle this problem

The simplest answer to this question is bitcoin using blockchain technology has been the possible way in which digital double-spending has been controlled.
With the use of blockchain nodes distributed across different locations which make all transactions validation by confirming and making sure all transactions are valid through sophisticated computing power known as mining

How Blocks Hashes Work in Blockchain

The blockchain hash contains a string of alphanumeric lines of information that stores data from processed or completed transactions on the blockchain here for hash to work it has to undergo some process first the inputs which contains raw information inputted into the hash through the hash function and lastly gives the hashing output which contains the hash value of the inputted raw information.

Here I will be exploring the blockchain demo to work/play with the hash function.

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Playing around the homepage I will be inputting some text to see what will be the hash output.

Text Assignment task
Hash output value 9687250c0e9e0691e3207e2d68cf65636e512f6f64ef9862aea80d0b79935e7f

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The result got from the inputted text shows the hash value is invalid which means a valid hash starts with zeros

Changing the text by removing the capital letter from the assignment task will give a different hash output value shown below.

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Hash output value
*68b3eed12ad814c53a828af047046f69b0ab775d5c17bd1971c0cb2959368655"

As can be seen, any changes introduced to block hash will give a different result although all the output hash values are different a constant length of alphabetical character maintains the same length.

Also if I decide to increase the length of the text value the hash output value with still maintaining the same alphanumeric character length with different hash output values.

Text input Assignment task on how blockchain hash function

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Output value a55ef6df0f271f36dfc4592a32dcf790ea7a4d58cafb96f19f8e498bf9bbd846

To check a valid hash function I will navigate a different page, by clicking on block

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Above is a valid block generated by me which means if I was to participate as a miner by forming and generating the above output value using Yea as my input value the generated block was formed at 32486 Nonce from block 1

This type of attack also involves when a hacker controls or run a node with this node he can make false transaction by double-spending a coin to another user wallet which is been generated by hacker for this type of hack the hacker runs the block node and send the coin to the receiver which will be receiving the false transaction.

Merchant is most vulnerable to this attack where hackers buy goods from such merchants.

This attack can be minimized if such merchant is patient enough to wait for all block confirmation times of transactions to be fully completed before releasing any goods

• Regulation policy; blockchain decentralized technology has been a major threat to centralized financial sectors as more users have recently diverted their attention from the old fashion system to embrace the new technology government and regulations bodies have been introducing complex policies to make blockchain technology unfriendly for the environment. these regulations are also a major setback holding interested users to fully adopt blockchain technology.

• Cost in maintaining mining rigs; It's known for the bitcoin network to stay secure mining needs to be constantly working 24/7 this is very cost-effective as electricity is a major challenge for this process mining machines consumes a high amount of energy that also requires a high amount to maintain.

• laundering; with decentralized financial system money launderers have leveraged the system to conduct unsolicited activities which includes making a huge amount of transaction that are in most case untraceable this has been a huge limitation in the blockchain.

Conclusion

Blockchain technology has gradually increased credibility in the financial sector as the need for intermediate users are been eliminated, with blockchain distributed ledgers users need not to worry about transaction validation as synchronized distributed computing systems are used by miners to validate these transactions old centralized system are prone to cyber-attacks with blockchain in play these attacks have been minimized to the minimum.

Blockchain double spending can be solved using blockchain technology as node validation need to be approved by miners before any transaction will confirm this eliminates the need for digital double-spending.
Double-spending can be a problem in the crypto space but with the presence of blockchain this problem has be resolved.

Cc; @stream4u