Features of Blockchain

Blockchain evolved with several advantages for industries that need to be discussed in detail.

Immutability and Transparency In Blockchain

Immutability: Once data is recorded on the blockchain, it cannot be altered or deleted. This tamper-proof feature ensures that all transactions are permanent and secure, enhancing trust and data integrity.

Transparency: All participants in the network have access to the same data, creating a transparent system where every transaction is recorded and can be verified by all nodes. This helps prevent fraud and ensures accountability.

Security

Blockchain uses advanced cryptographic techniques to secure data. Each block is linked to the previous one using cryptographic hashes, making it extremely difficult to alter any part of the blockchain without detection.

Each transaction in a block is cryptographically secured by generating a digital signature using cryptographic hash algorithms. The transaction is transparent to all the participating nodes in the network, but they do not have any knowledge about the user’s identity and confidential information. The transaction is secured using a digital signature, which combines private and public cryptographic keys. Blockchain mainly uses the SHA-256 algorithm to convert data transactions into hash values making it difficult for an attacker to find the original data from the generated hash value.

Decentralization

Unlike traditional centralized systems, blockchain operates on a peer-to-peer network where no single entity has control. Every participant (node) maintains a copy of the ledger, promoting transparency and reducing reliance on intermediaries.

Distributed Ledger

It is a public ledger shared among all the nodes of the blockchain, which resides in different geographical locations of the world. The distributed ledger contains many transactions or contracts maintained in a decentralized form. All the information in a ledger is cryptographically secure using cryptographic signatures and hash keys. Every node of the blockchain maintains a copy of the ledger. Every local copy of the ledger is the same for all the nodes, ensuring the consistency of information and maintaining trust between the nodes. All local copies are always updated based on global information. Once the information is stored in the ledger, it becomes an immutable database This feature of the ledger makes the blocks hard to attack by attackers. If an attacker wants to modify the transaction, it must simultaneously attack all the distributed copies. If one wants to make changes in the transaction, it needs to generate one more transaction for change but cannot modify the previous one. The ledger includes all the historical information which may be used for future computation. Blockchain works as a distributed ledger technology, while bitcoin works by utilizing blockchain technology. Let’s consider a scenario. Consider a blockchain network involving five people, namely A, B, C, D, and E. If there is an occurrence of a transaction between person A and person B, then this transaction reflects on the ledger of all the five persons of the network, whether they are involved in the transaction or not. All the persons have the knowledge of every transaction on the network; it maintains the transparency of transactions between all the nodes. Distributed ledger systems are used in various industries such as finance, music, entertainment, artwork, supply chain of multiple commodities, and many mores

Peer-To-Peer Network

P2P networks consist of a group of connected computers with equal permissions and responsibilities for processing the data. There is no centralized server that the whole system relies upon. All the peers/nodes are equally privileged to participate in the network. The main usage of the P2P system is file sharing. If we use a traditional client–server system, it becomes prolonged to download a file, and it depends on a central server. P2P does not depend upon the centralized authority, i.e., if one node fails, then the whole system will not crash, but in a client–server system, fault in one node becomes a failure of the complete system. The P2P feature of blockchain is used in a consensus mechanism where all nodes have the same privileges for getting cryptocurrencies as there is no single governing body in the network

Append-only

The blockchain uses an append-only data structure. It means that only validated blocks can be added to the order based on their timestamp order. The addition of blocks should be performed based on the sequential order in which the blockchain has verified them. Also, each block in the network should refer to the previous block’s hash. Append-only feature of the blockchain ensures that once the block is added to the network, it can’t be altered. If some malicious attacker tries to access or modify the data blocks, then the hash value of that corresponding block will be changed, interfering with the basic working of a chain of blocks in blockchain network.