Blockchain
Blockchain is a continuous and sequential chain of blocks built according to certain rules. Each of them contains information. Blockchain is a special case of a distributed registry, where data is grouped and organized into blocks, and blocks are connected and protected by cryptographic methods. That is why it can exist without a central authority or a management server.
The term «blockchain» appeared and became widely used thanks to the Bitcoin network, but it is possible to trace a number of other areas and discoveries to see the background of its origin: information theory, networks, games, distributed databases, the Internet and its development as such.
In essence, the blockchain is an ever-growing array of records. You can only add data to it — you cannot delete or change information stored in previous blocks.
Blockchain is a decentralized technology that provides a secure and transparent process for recording and storing information on the Internet. The technology is based on block chains that contain data and are stored in a distributed network of computers called nodes. Each block contains a set of records about tokens or transactions that are added to the chain sequentially and cannot be changed or deleted without the consent of the majority of network participants.
A promising concept of the Internet of the future, Web 3.0, is being implemented on the basis of blockchains.
Characteristics of the blockchain
The main characteristics of the blockchain are transparency, security and decentralization.
- Transparency means that all network participants can see all transactions and records in the blockchain.
- Data security is ensured by the cryptography mechanism. The information in the blocks cannot be changed or forged unnoticed by network participants, and a number of mechanisms ensure the recovery of corrupted records.
- Decentralization means that the blockchain works without central management and control, each node has equal rights and participates in the process of confirming and recording new blocks.
Blockchain architecture
The architecture of the blockchain is the specifics of the structure of a particular blockchain, which may be different. If we draw a parallel with the usual chain, then the key factors will be the material of manufacture, the size of the links, the method of coupling — all this may be different and will determine the characteristics and applications of this blockchain.
In the blockchain architecture, key characteristics can be identified: the consensus algorithm, block size, network bandwidth and economic incentives for participants to maintain network operability.
Block
Main article: Block
A «block» is a special structure — a link in a chain in which anything can be recorded, and usually this is the history of transactions (transactions between network participants).
The block chain makes the blockchain unique and different from any other type of information storage and transmission. Copies of the entire block chain or part of it are simultaneously stored on multiple computers and synchronized according to the formal rules of each particular blockchain. According to certain algorithms that are embedded in the architecture of a particular blockchain, each block «clings» to the previous one. Each subsequent block is linked to the previous hash function of the block, which makes it impossible to add or change data in old blocks.
Block in DecimalChain
In the Decimal network, the block contains user transactions and DEL issues, validator signatures, commissions, hash of the current and previous block, and other service information. In the Decimal blockchain, blocks are generated approximately every 5.5-6 seconds. The block contains from 0 to 10,000 transactions weighing approximately 180 bytes each. The reward for the block occurs according to the emission model: at the start, this is 50 DEL per block, then there is an increase every 432,000 blocks (~ 30 calendar days).
Consensus
Main article: Consensus
Consensus is a way to come to an agreement. In cryptocurrencies, it is the achievement of the consent of all independent nodes of the network.
«Consensus algorithm» is a set of principles, that is, certain mathematical rules and functions that make it possible to reach an agreement between all participants and ensure the operability of the network. At the moment, there are several different methods of reaching consensus.
The most common consensus algorithms are «PoW» (Proof of Work), «PoS» (Proof of Stake) and their various hybrids and variations.
DecimalChain uses the consensus algorithm Delegated-Proof-of-Stake (DPoS).
Where is the blockchain stored?
Physically, the blockchain is stored by many independent and unknowing people (network nodes) who store a complete copy of this blockchain on their own server and constantly synchronize the current state of the chain with each other.
In most structures, for example, such as banks, data is stored on one or more servers. In blockchains, all information is distributed between all network participants in a decentralized manner (public blockchain) or centrally (private blockchain).
In the first case, all information about all transactions is stored in the public domain — anyone can become a member of the network. In a private blockchain, only part of the information remains open for public access, and it is possible to become a member of the network either if a number of conditions are met, or it is impossible in principle.
In both cases, each node stores continuously updated identical information about the entire chain, starting with of the first block.
What problems does blockchain solve
Reliable storage of information
Issue. In the client-server architecture, nodes are not equal. Servers store information and control access to it, and clients send requests to servers and receive it. To disable the entire system, it is enough to make an attack on the server.
Solution. Blockchain is a peer-to-peer network where data is not stored in one place, but distributed among all participants. To hack such a system, you will need to disable at least half of all nodes, which is almost impossible.
Quick exchange of data
Issue. The transmission of information on the network is a long chain of actions, and in order for a message to reach the recipient, it must pass through many intermediate servers, which may be overloaded or simply disconnected. Because of this, the exchange of information can take a long time.
Solution. In the blockchain, data is transmitted directly. Peer-to-peer architecture allows you to quickly exchange information regardless of the location of users. Blockchain is always available, has no limited hours of operation and does not go offline on a schedule.
Absence of an intermediary
Issue. When servers transmit information, they also check its correctness. The presence of an intermediary is often necessary, but always increases the cost of making a transaction.
Solution. Thanks to the consensus algorithm, you can do without an intermediary. Since the data is distributed among all participants, any of them can check and confirm a new transaction. These users are called miners. The competition between them is high, which allows you to keep commissions at a low level.
High level of trust in the network
Issue. When there are no intermediaries in the transaction, any participant can deceive another. Therefore, in any peer-to-peer networks, there is distrust between the participants.
Solution. In the blockchain, the problem is solved with the help of algorithms by which blocks are created. The network does not allow changes that most users disagree with. Thus, attackers cannot change or delete information.
Public history of changes
Issue. The information may change over time, but when it happens frequently and quickly, it becomes difficult to overwrite the data. In addition, often the change history itself is also fundamentally important so that it is easy and safe to work with this information.
Solution. Any change of information in the blockchain is a transaction. Transactions are recorded in blocks, and blocks are connected in a chain that cannot be changed due to the connection with hashes. Thus, each participant of the network has access to the entire transaction history, up to the first one. At any time, you can check whether there was a transaction between two participants.
Conclusion
Every blockchain is a distributed registry, but not every distributed registry is a blockchain. It implies decentralization and agreement between nodes. In addition, in the blockchain, data is organized into blocks and it is only allowed to add new data. Distributed registries in general and blockchain in particular represent a conceptual breakthrough in data management that has already found application in every branch of the economy.
Examples of blockchains
One of the most well-known blockchain implementations is the Bitcoin cryptocurrency. The Bitcoin blockchain is used to record and confirm all transactions of this cryptocurrency.
The development of the Bitcoin idea was Ethereum, a decentralized platform based on blockchain technology that allows you to create and run smart contracts, as well as develop and distribute decentralized applications (dApps). The main difference between Ethereum and Bitcoin is that Ethereum is not only a digital currency, but also provides opportunities for developing and working with smart contracts and decentralized applications.
DecimalChain is a new stage in the development of the idea of blockchain. It differs from Ethereum in that it does not require specific knowledge and professional skills to work with smart contracts, dApps and cryptocurrencies. Being a kind of "constructor", DecimalChain provides ordinary users who are not too deeply familiar with the cryptosphere with the tools to create all this in the Cosmos ecosystem.
Blockchain has a wide range of applications and can be used in various fields such as finance, supply chain, healthcare and public administration. Due to its characteristics, blockchain can increase efficiency, improve the security and stability of systems, as well as eliminate the need for trust in centralized instances.