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

In most easy wording you can say that blockchain is the chain of blocks and each Block contain some information in it.

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Or it can be defined as a digital ledger of transactions in which the information is distributed to the all networks on the chain. Being widely distributed on the chain makes it almost impossible to hack or change. So it is considered as the most secure but transparent method. In blockchain all the blocks are linked and connected to each with a hash code and it is very unique.

It actually works with no central/superior authority. In easy wording we can say that all the nodes ( the systems on the blockchain ) have same importance and all have the same authority so it creates an independent and free environment and its transparency also gives it an edge. I have a picture to give you a better understanding about decentralised system with comparison to centralised one.

Source

Types of the Blockchain ;

According to the research that i made there are basically four types of blockchain.

🔵 Public Blockchain

🔵 private Blockchain

🔵 Hybrid Blockchain

🔵 Consortium Blockchain

Let's Explore each of them one by one :

⬛ Public Blockchain :-

This is the first type of block chain. Public blockchain is the blockchain which became a reason for creation of cryptocurrencies like Bitcoin. It got famous Because it eradicated the problem of transparency and highly charged slow transactions etc. In general it doesn't store information on one place instead it stores it on all the peers of blockchain.

It makes transactions quickly because nobody has to wait for the superior authority to give permission or involvement.To make any transaction it has to be validated. And to validate there is a proper system of Consensus mechanism. This mechanism could be either Proof of Work or Proof of Stake . To learn more about PoW and PoS you can visit my this post .

They are very commonly used for mining and cryptocurrencies exchanges. They are totally non-restrictive and anyone can see them, validate the transactions and check the records. The transaction can't be made private in this type of blockchain and you can't forbid any user from accessing.

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⬛ Private Blockchain

This type of blockchain works just like public Blockchain but in a restrictive environment. The transactions are from peer to peer in decentralised system but within a network frame. Such blockchain is used at a comparatively smaller scale like in Companies. Instead of anyone validating the transactions it needs permissions that's why it is also called Permissiond blockchain .

Godefroy said ;

"You can think of private blockchains as being the intranet, while the public blockchains are more like the internet,"

They are limited in size but could be much quicker than public blockchain because of limited size of network. Their speed makes them ideal for use by different companies who wants to share some information within network but not with public. But there is a controversy about it that private not real blockchain because of its limited access and formal centralisation of selected nodes. One has to take Permission before making any edits or validation.

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⬛ Hybrid Blockchain :-

For a simple understanding you can take it as a combination of both public blockchain and private blockchain . The information here is both for a certain frame and for public as well. For example if a company wants to share an information but a specific part with selected ones and rest with public so this type of sharing is done through hybrid Blockchain.

Any information can be kept confidential but still cam be verified by giving access to public nodes at any time. In this way a system for both scenarios work here. When a new node join its identity isn't shown to everyone but later when it validate any transaction its identity is exposed. The biggest advantage of this system is that it can be 51% attacked because of controlled environment But obviously it is less transparent then public blockchain and it give rise to doubts about it .

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⬛ Consortium blockchain :-

This is also like hybrid Blockchain because it also contains both public and private blockchains but there is a little bit difference. In this blockchain different organizations can link to each other on a decentralised system having a personal network behind.The access is controlled and usually given to active nodes by authorities.

The active nodes initiates the transactions and is validated by allowed node.It is considered as more secure and efficient because it has a larger network but with a controlled access. Although it is also less transparent because of controlled access. Different banks can unite in this blockchain deciding which node will validate the transaction.

What are the benefits of blockchain?

🔶 Transparency

The most highlighted benefit of blockchain is its transparency. It is formally the most transparent structure. The information can be checked, recorded, edited, modified, validated by any node on the system. The is no permission required or no limited access ( here am talking about the most common public blockchain ) . All the nodes are confident about it because they are at authority of noticing anything.

🔶 Secured System

It is considered as most secured and very very difficult to hack. The reason is its complex codes and its mechanism. The information is written in the form of codes and can be re converted only by the author. The codes are actually complex hash, we will talk about it later .

🔶 Less Costly

As we know that blockchain works on Decentralised system so no central authority is present and hence no one needs to pay high fees for transactions like traditional system and So, it reduces the cost significantly.

🔶 Efficient System

Due to its structure it is considered as the most efficient system. No one have to wait for prolonged verifications so everything and every transaction gets completed in very short time.This benefit is also considered as the prominent one.

🔶 Traceable system

Since any information can be accessed from anywhere by any node so it is also a plus point of blockchain that any information or transaction can be traced at any time.

🔶 Automations

To make transactions even more quicker and on time you can make them automatic with some contracts, this feature is also very important so it gives an edge to it.

Explain Blockchain Distributed ledger.

For this let me explain about the traditional database ledger first. Let suppose you make a transaction using any Traditional system of Banking , the Bank verify your transaction that you have a asset and this information is kept between you and bank and in traditional system the bank is superior authority for validation of transactions.

Now let's tak about Blockchain distribution ledger, this is also a database but here because of blockchain any stored information is sent to all the nodes on the network and hence the information is made public. Similarly the transaction is to be verified by someone but contrary to the traditional system the transaction can be verified by any node on the system and the transaction is transparent.

With non-distributive ledger we need to trust a bank to validate our transactions or funds. But due to Blockchain distribution ledger we no more need banks and our assets can be shared and transferred easily , quickly and efficiently. Just like blockchain there are different types of distribution ledgers that are public , private, permission less or permissioned or semi-permissioned.

What Is Blockchain Double Spending and how Bitcoin handles this problem?

Double Spending is the problem of digital currency of being spent more than once. Digital currencies are not physically present so anyone who is expert of blockchain can reproduce them. Digital assets are victim of this problem and it happened many times in market because there was no one to make it sure that is was spent only once.

There is also another form of double Spending that the holder can keep the original coin and make a copy of it and selling it to others, so you see it is very serious issue and if a highly prized currency is spent twice it would be a big spam. Bitcoin also became its victim initially.

How bitcoin handled this problem ;

Bitcoin handled this problem since its start by introducing a confirmation mechanism of time stamp ed logs using universal ledger called blockchain. Now every transaction goes in a non-confirmation pool first where any node have to verify it and once it is verified it is stored in a block.

For example you made a transaction, it will go for validation and once its validated its hash will be formed and it will be secured in a block and if you tried to make a transaction of its copy again your transaction won't be validated because of old copy available to all nodes.

So that's how bitcoin resolved this problem wisely using blockchain.

Practical + Theory, Visit Blockchain Demo and check section Blockchain, then explain in detail how Blocks Hashes Work in Blockchain, what will happen when any middle of the block gets changed, try to give screenshot for each possible details.

As suggested by the professor, I visited blockchain demo and clicked on the blockchain section ;

( I used landscape mode to post because picture was long in length and not appropriate for presentation)

Here after opening it. As you can see there was three blocks where when you write the information it gets codes in the form of hashes. There working is as following ;-

✴️ Data

It is the input information that is to be stored and is given by the initiater.

✴️ Nonce

It is a random 32-bit number which is generated randomly when you put the data. Actually nonce generates the hash so has to be right to make hash right.

Here you can see that i tried to put nonce according to me randomly but it didn't generated hash. But when i did mine it used my system and solved the figure and hash was generated. (The column turned green).

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✴️ Hashes

The final output that comes in the form of a 256-bit number is called a Hash. This is complex random mathematical number which is a code for our information and that why it is considered as most safe.

Thehash code that connects the next block with previous one.

What happens when middle of the block gets changed?

As i told above the hashes of blocks are linked so when we change the previous one the next needs to be changed.

Here is the demonstration, you can see in the below screenshot that i successfully generated all three hashes of blocks by mining.

Now when i clicked and changed the centeral block the next block Also turned red because it needs to be modified as the information in previously linked got changed.

So this was all about blockchain demo and how hash works.

What Is Race Attack in blockchain?

It is a type of attack which is related to the double Spending.The attacker in this attack creates two disputed transactions at a time . The first transaction is sent to the victim which confirms it with out waiting for its validation.

Now at the same time the disputed transaction is made to the attacker equal to the cryptocurrency that was initiated.As the first transaction that was confirmed before validation gets cancelled and that's how the attacker successfully achieve his goal and the victim has to suffer.

So that's how this attack is performed and with above strategy the attacker uses double Spending technique to fulfill his purpose.

Limitations/disadvantages of Blockchain.

Just like everything in this world, advantages comes with disadvantages , so let's talk about Disadvantages :-

🔴 Could get slower

Getting slower with time is one of most famous drawback of blockchain. It gets slower when too many users join the chain. So it makes it slower.

🔴 Excessive Energy Consumption

It consumes a lot of electricity so its not environment friendly. Especially the mechanism of Proof of work ( PoW ) consumes energy too much because it involves heavy electrical devices.

🔴 High Cost

Maintaining a blockchain setup is often very costly so it can also be taken as a drawback.

🔴 Hard to scale :

Blockchain is very hard to scale because of its consensus mechanism so it is also considered as its one of the most obvious drawbacks.

🔴 Not integrated with existing systems

Currently there is no way to integrate it with existing systems that make it difficult to accepted.

🔴 Self Care

We have to take care of our wallets and passwords because there is no central authority that would take the responsibility of any misshape.

So, this was all about the drawbacks according to my research.

🔸🔸END OF QUESTIONS 🔸🔸

Conclusion :

From the all of above it can be concluded that Blockchain is a fundamental thing for sure because it is ideal for different type of people and organisations because it offers different modes like public , private and hybrid that operates with giving different controls and permissions according to the nature of blockchain. It has enormous benefits like transparency, security and tracing ability but along with Disadvantages like slowing down and energy inefficiency. According to me the benefits have an edge because of its revolution in today's systems. And yes ! It can get attacked in different ways so be careful about that.