Introduction
Blockchain has several advantages over other normal databases. And there is no doubt that the world has accepted the blockchain technology due to these several advantages.
That is what we are going to learn within this section, in this reading we will get to know about top 6 features of Blockchain Technology, which makes it outstanding within several industries.
Features of Blockchain
1. Immutability
Immutability refers to a property which describes the fact that once a data or information is recorded within the blockchain, it cannot be changed. There is no alternative to replace or delete the transaction information. If you want to change the information then you will have to change the information of the entire blockchain from each node (because each block hash is connected to its preceding block hash), this is very difficult to change all the hashes as it requires a lot computational power and other components of nodes, such as their public and private keys. Due to these complicated algorithms and techniques, blockchain technology becomes immutable.
2. Decentralized
Blockchains are decentralized in nature meaning that no single person or group holds the authority of the overall network. Decentralization is one of the top most reason of Cryptocurrencies birth.
On the basis of blockchain, we can divide the era within two parts, the era before bitcoin and the era after bitcoin. Before bitcoin, we had only centralized systems such as central banks (for example, Reserve Bank of India and Federal Reserve within America) or other commercial banks, these systems are centralized and regulated by third parties, mostly central banks, and there are a number of flaws within the centralized system such as 2008 global financial crisis and bankruptcies of commercial banks.
3. Enhanced Security
Added with decentralization, cryptography lays another layer of protection for users. Where each information is converted into 256-bit random number through cryptographic hashed algorithms. There are two types of key-cryptography are used in encryption (method of locking cryptographic information):
a) Symmetric key Cryptography: this is also known as secret-key cryptography as the encryption and decryption process uses the same key. The size of cypher text is smaller or same and encryption is very fast. It transfers a huge amount of data with confidentiality.
b) Asymmetric key Cryptography: this is known as Public-key cryptography. It lies on opposite side of secret-key cryptography, because encryption and decryption process use different keys. Public-key is used in encryption and private key-is used in decryption. It transfers only small amount of data, but with authenticity and confidentiality.
Public-key cryptography is used in most of the cryptocurrencies, a popular implementation of public and private key is RSA (Rivest-Shamir-Adleman) algorithm. But RSA is not used in Bitcoin and Ethereum blockchains. Instead, ECC (Elliptic Curve Cryptography) is used in Bitcoin and Ethereum.
4. Distributed Ledgers
That is blockchain’s structure which makes it so unique, in which P-2-P network handles the whole blockchain technology. This Peer-to-Peer network shares distributed ledgers, due to which it becomes decentralized. The data on the ledger system is stored in a block and grouped by the nodes. As the data blocks are linked with each-other, and due to the cryptographic hashed algorithms, it gains enhanced security. This enhanced security and distributed ledgers introduces immutability within the system.
Why distribution ledgers feature is an important feature of Blockchain Technology?
- No Malicious Changes
- Ownership or Verification
- No Extra Favours
- Managership
- Quick Response
5. Consensus Algorithms:
As we have gotten that blockchain architecture is cleverly designed, it’s each feature is linked with other features. Consensus algorithm is used in decision making process of a transaction for the group of nodes active on network. When a huge number of nodes are participating in validation process, an algorithm is necessary for a system to make the process smooth. It’s like a voting system, where majority nodes win over minority nodes. It’s consensus algorithm, which makes the whole blockchain system trust less.
There are several types of consensus algorithms, but most of them are:
a. Proof of Work (PoW)
b. Proof of Stake (PoS)
c. Delegated Proof of Stake (DPoS)
d. Proof of Authority (PoA)
6. Faster:
Whenever we talk about traditional techniques of transactions, we remember that traditional banking system is quite slow and less securable. On another hand, when we look at blockchain system, we get faster, smooth and securable transactions due to consensus algorithm. So, we can say that with compare to traditional banking system, blockchain is too fast.
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