Blockchain

Definition of Blockchain Technology

Blockchain, also known as Distributed Ledger Technology (DLT), is basically a secure chain of digital records (Blocks) that exist on multiple computers simultaneously, that are linked using cryptography.

“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” (Don Tapscott, 2017).

Blocks

A block represents the ‘present’ and contains information about its past and future. Each time a block is completed it becomes part of the past and gives way to a new block in the blockchain. The whole system works in a constant cycle and data gets permanently stored. Each block comprises records of some or all recent transactions.

Decentralization

Blockchain does not store any of its information in a central location. Instead, the blockchain is copied and spread across a network of computers.
The peer-to-peer network of nodes constantly, creating and validating Blocks, ensures decentralization and eliminates the single-point-of-failure issue in current centralized systems. This innovative protocol makes it virtually impossible for a hacker to alter the transaction data.

Blockchains are hence not controlled by a central authority, but by the entire network of participants, who establish the rules for participation themselves and can elect to evolve the system according to consensus; this makes them censorship-resistant and inherently more elastic than most other decision-making mechanisms for large groups of people.

Cryptography

Blockchain technology makes use of cryptography in multiple different ways – for wallets, transactions, security, and privacy-preserving protocols.

Public-key cryptography (also called asymmetric cryptography) is a cryptographic system that uses a pair of keys – a public key and a private key. The public key may be widely distributed, but the private key is meant to be known only by its owner. Keys are always created in a pair – every public key must have a corresponding private key.

Public-key cryptography is most often used for encrypting messages between two people or two computers in a secure way. Anyone can use someone’s public key to encrypt a message, but once encrypted, the only way to decrypt that message is by using the corresponding private key.

Hashing

Blockchains function based on the verification of a hash and digital signatures. Hashing is the process that blockchains utilize to confirm its state. Each transaction requires one or more digital signatures. Signatures ensure that the transaction is only made by the owner of the address. And that it is received by the correct recipient.

Presently SHA-256 is the most secure hashing function. This function expresses the possible combinations or values that results from the given input data. SHA stands for Secure Hashing Function, and 256 expresses the numerical quantity of the fixed bit length. This means that the target is correct 256 bit, and as mentioned, Bitcoin uses a 65-hexadecimal hash value.

Using the SHA-256 function makes it (nearly) impossible to duplicate a hash because there are just too many combinations to try and process. Therefore, this requires a significant amount of computational work; really significant.

Consensus Algorithms

Blockchain consensus models are methods to create equality and fairness in the online world. There are a lot of different Blockchain protocols out there each with its unique features. The difference between them lies in their architecture to reach an agreement among its participants. The architecture is cleverly designed, and consensus algorithms are at the core of this architecture.

The most commonly used consensus models are Proof-of-work, Proof-of-Stake, Delegated Proof-of-Stake, Delegated Byzantine Fault Tolerance etc.

Smart Contracts

“A smart contract is a mechanism involving digital assets and two or more parties, where some or all of the parties put assets in, and assets are automatically redistributed among those parties according to a formula based on certain data that is not known at the time the contract is initiated.” – Vitalik Buterin (Creator of Ethereum)

In simple terms, smart contracts are self-executing, written into code, and built as complex if-then statements – they will only be fulfilled if the established conditions are met. Ultimately, smart contracts remove the need for a third party, meaning participants entering into the agreement can transact directly with each other.

public blockchains

ethereum-png2
icon-logo2
eos-logo2

VS

private blockchains

hyperledger-lgo
corda-logo
quorum-lgo

The Blockchain Trilemma

  • Scalability
  • Security
  • Decentralization

This chart refers to the tradeoffs that crypto projects must make when deciding how to optimize the underlying architecture of their own blockchain.

Specific features of a blockchain

Here is a list of features that most of the commonly used public blockchain protocols provide :

  • Immutability
  • Peer-to-peer digital transactions
  • Cryptographically secured
  • Trustless System based on code
  • Decentralized
  • High transparency
  • Opt-in privacy features
  • Process automization through Smart Contracts
Atlas Digital Consulting Logo

Atlas Digital Consulting has a team of highly skilled blockchain developers and consultants who are dedicated to building applied blockchain solutions for enterprise clients.

We can help you unlock the full potential of Blockchain Technology by evaluating, testing and implementing tailor-made solutions that provide the best value to your company’s unique business model.

Contact Us

The future of blockchain technologyOur vision and analysis

Use cases

Analyzing and identifying the use cases of blockchain technology makes the future of certain industries look very promising. It is just a matter of time until governments and the mainstream corporate world starts discovering the true benefits of using blockchain technology. Here are a few examples to showcase where businesses can boost productivity and make operations more efficient by leveraging Distributed Ledger Technology.

  • Bank the unbanked
  • Unbank the banked
  • Cheap and fast peer-to-peer cross border transactions
  • No double-spend issue
  • Trustless system
  • Non-fungible-Tokens (NFTs)
  • Seamless and secure transfer of ownership
  • Transaction and trading of unique digital Items
  • Build decentralized Gaming Ecosystems
  • Self-sovereign identity
  • Full ownership of data
  • No single-point-of-failure issue
  • Convenience and enhance user-experience
  • Asset tokenization
  • Efficient, transparent and seamless transfer of land titles
  • Enables fractional ownership
  • Traceability and process control
  • Asset digitization
  • Full Transperancy
  • Immutability
  • Verification of authenticity of goods
  • Cheaper and more secure way to store files and data
  • Tokenization of assets
  • Seemless transfer of digital ownership
  • Fractional ownership (low minimum investment)
  • Verification to avoid counterfeit drugs
  • Patients medical history on the go
  • End-to-end traceability, transparency and efficiency of the food supply chain.
  • Verification of authenticity of offical documents and certificates
  • Protects from copyright infringement, patents and original idea theft

Enterprise Adoption

The number of large corporations adopting blockchain is constantly increasing. More and more money is invested in R&D, project pilots and high-profile proof-of-concepts (PoCs). There are plenty of companies that are already using private enterprise blockchains such as Quora, Hyperledger and Corda. However the full potential of blockchain technology you can only achieve by being able to interact with public blockchains as well.

Potential

In our opinion this technology has the power to shape the future of many industries that currently exist. Just like every other technological innovation it won’t disrupt industries entirely, but will enhance productivity, increase efficiency and alter the way how we work today completely, just like the internet did in the early 90’s.

Our Services

Digital Transformation Consulting

Tailor-made strategies and technical solutions to prepare your business for the digital transformation.

read more
Technology Consulting

Take your business to the next level of productivity. We help you steer your transformation by implementing the most innovative technology.

read more
Digital Marketing & Business Development

We are a full service technlogy consultancy – with profound expertise in digital marketing and business development.

read more
Payment Processor Advisory & Implementation

We can help you identify, evaluate and implement the payment processor solution which suits best your clients and your business needs.

read more

Related News

Blockchain Events

If you are looking for a blockchain consultant

This website uses cookies and asks your personal data to enhance your browsing experience.