Blockchain Tutorial

Blockchain Tutorial provides basic and advanced concepts of blockchain. Blockchain is

a constantly growing ledger that keeps a permanent record of all the transactions that have
taken place in a secure, chronological, and immutable way. It can be used for the secure
transfer of money, property, contracts, etc. without requiring a third-party intermediary such as
bank or government. Blockchain is a software protocol, but it could not be run without the
Internet (like SMTP is for email).

What is Blockchain?

A blockchain is a constantly growing ledger which keeps a permanent record of all the
transactions that have taken place in a secure, chronological, and immutable way.
Let's breakdown the definition,
o Ledger: It is a file that is constantly growing.
o Permanent: It means once the transaction goes inside a blockchain, you can put up it
permanently in the ledger.
o Secure: Blockchain placed information in a secure way. It uses very advanced
cryptography to make sure that the information is locked inside the blockchain.
o Chronological: Chronological means every transaction happens after the previous one.
o Immutable: It means as you build all the transaction onto the blockchain, this ledger can
never be changed.

A blockchain is a chain of blocks which contain information. Each block records all of the recent
transactions, and once completed goes into the blockchain as a permanent database. Each time
a block gets completed, a new block is generated.

Note: A blockchain can be used for the secure transfer of money, property, contracts,
etc. without requiring a third-party intermediary like bank or government. Blockchain is a
software protocol, but it could not be run without the Internet (like SMTP used in email).
Who uses the blockchain?
Blockchain technology can be integrated into multiple areas. The primary use of blockchains is
as a distributed ledger for cryptocurrencies. It shows great promise across a wide range of
business applications like Banking, Finance, Government, Healthcare, Insurance, Media and
Entertainment, Retail, etc.
Need of Blockchain

Blockchain technology has become popular because of the following.

o Time reduction: In the financial industry, blockchain can allow the quicker settlement
of trades. It does not take a lengthy process for verification, settlement, and clearance. It
is because of a single version of agreed-upon data available between all stakeholders.
o Unchangeable transactions: Blockchain register transactions in a chronological order
which certifies the unalterability of all operations, means when a new block is added to
the chain of ledgers, it cannot be removed or modified.
o Reliability: Blockchain certifies and verifies the identities of each interested parties.
This removes double records, reducing rates and accelerates transactions.
o Security: Blockchain uses very advanced cryptography to make sure that the
information is locked inside the blockchain. It uses Distributed Ledger Technology
where each party holds a copy of the original chain, so the system remains operative,
even the large number of other nodes fall.
o Collaboration: It allows each party to transact directly with each other without
requiring a third-party intermediary.
o Decentralized: It is decentralized because there is no central authority supervising
anything. There are standards rules on how every node exchanges the blockchain
information. This method ensures that all transactions are validated, and all valid
transactions are added one by one.

History of Blockchain
The blockchain technology was described in 1991 by the research scientist Stuart
Haber and W. Scott Stornetta. They wanted to introduce a computationally practical
solution for time-stamping digital documents so that they could not be backdated or
tampered. They develop a system using the concept of cryptographically secured chain of
blocks to store the time-stamped documents.
o In 1992, Merkle Trees were incorporated into the design, which makes blockchain more
efficient by allowing several documents to be collected into one block. Merkle Trees are
used to create a 'secured chain of blocks.' It stored a series of data records, and each data
records connected to the one before it. The newest record in this chain contains the
history of the entire chain. However, this technology went unused, and the patent lapsed
in 2004.
 o In 2004, computer scientist and cryptographic activist Hal Finney introduced a system
called Reusable Proof Of Work(RPoW) as a prototype for digital cash. It was a
significant early step in the history of cryptocurrencies. The RPoW system worked by
receiving a non-exchangeable or a non-fungible Hashcash based proof of work token in
return, created an RSA-signed token that further could be transferred from person to
person.
o RPoW solved the double-spending problem by keeping the ownership of tokens
registered on a trusted server. This server was designed to allow users throughout the
world to verify its correctness and integrity in real-time.

o Further, in 2008, Satoshi Nakamoto conceptualized the theory of distributed

blockchains. He improves the design in a unique way to add blocks to the initial chain
without requiring them to be signed by trusted parties. The modified trees would
contain a secure history of data exchanges. It utilizes a peer-to-peer network for
timestamping and verifying each exchange. It could be managed autonomously without
requiring a central authority. These improvements were so beneficial that makes
blockchains as the backbone of cryptocurrencies. Today, the design serves as the public
ledger for all transactions in the cryptocurrency space.
o The evolution of blockchains has been steady and promising. The words block and chain
were used separately in Satoshi Nakamoto's original paper but were eventually
popularized as a single word, the Blockchain, by 2016. In recent time, the file size of
cryptocurrency blockchain containing records of all transactions occurred on the
network has grown from 20 GB to 100 GB.

What is Bitcoin?

Satoshi Nakamoto introduced the bitcoin in the year 2008. Bitcoin is a

cryptocurrency(virtual currency), or a digital currency that uses rules of cryptography for
regulation and generation of units of currency. A Bitcoin fell under the scope
of cryptocurrency and became the first and most valuable among them. It is commonly
called decentralized digital currency.

A bitcoin is a type of digital assets which can be bought, sold, and transfer between the two
parties securely over the internet. Bitcoin can be used to store values much like fine gold, silver,
and some other type of investments. We can also use bitcoin to buy products and services as
well as make payments and exchange values electronically.
A bitcoin is different from other traditional currencies such as Dollar, Pound, and Euro, which
can also be used to buy things and exchange values electronically. There are no physical coins
for bitcoins or paper bills. When you send bitcoin to someone or used bitcoin to buy anything,
you don?t need to use a bank, a credit card, or any other third-party. Instead, you can simply
send bitcoin directly to another party over the internet with securely and almost instantly.

How Bitcoin Works?

When you send an email to another person, you just type an email address and can
communicate directly to that person. It is the same thing when you send an instant message.
This type of communication between two parties is commonly known as Peer-to-Peer
communication.

Whenever you want to transfer money to someone over the internet, you need to use a service
of third-party such as banks, a credit card, a PayPal, or some other type of money transfer
services. The reason for using third-party is to ensure that you are transferring that money. In
other words, you need to be able to verify that both parties have done what they need to do in
real exchange.

For example, Suppose you click on a photo that you want to send it to another person, so you
can simply attach that photo to an email, type the receiver email address and send it. The other
person will receive the photo, and you think it would end, but it is not. Now, we have two copies
of photo, one is a simple email, and another is an original file which is still on my computer.
Here, we send the copy of the file of the photo, not the original file. This issue is commonly
known as the double-spend problem.

The double-spend problem provides a challenge to determine whether a transaction is real or

not. How you can send a bitcoin to someone over the internet without needing a bank or some
other institution to certify the transfer took place. The answer arises in a global network of
thousands of computers called a Bitcoin Network and a special type of decentralized laser
technology called blockchain.

In Bitcoin, all the information related to the transaction is captured securely by using maths,
protected cryptographically, and the data is stored and verified across the entire network of
computers. In other words, instead of having a centralized database of the third-party such as
banks to certify the transaction took place. Bitcoin uses blockchain technology across a
decentralized network of computers to securely verify, confirm and record each transaction.
Since data is stored in a decentralized manner across a wide network, there is no single point of
failure. This makes blockchain more secure and less prone to fraud, tampering or general
system failure than keeping them in a single centralized location.
Blockchain Version

The brief description of the evolution of blockchain technology and its versioning from 1.0 to
3.0 are explained below.

Blockchain 1.0: Currency

The idea of creating money through solving computational puzzles was first introduced
in 2005 by Hal Finney, who created the first concept for cryptocurrencies (The
implementation of distributed ledger technology). This ledger allows financial transactions
based on blockchain technology or DLT to be executed with Bitcoin. Bitcoin is the most
prominent example in this segment. It is being used as cash for the Internet and seen as the
enabler of an Internet of Money.

Blockchain 2.0: Smart Contracts

The main issues that came with Bitcoin are wasteful mining and lack of network scalability. To
overcome these issues, this version extends the concept of Bitcoin beyond currency. The new
key concepts are Smart Contracts. It is small computer programs that "live" in the blockchain.
They are free computer programs which executed automatically and checked conditions which
are defined earlier like facilitation, verification or enforcement. The big advantage of this
technology that blockchain offers, making it impossible to tamper or hack Smart Contracts. A
most prominent example is the Ethereum Blockchain, which provides a platform where the
developer community can build distributed applications for the Blockchain network.
Quickly, the blockchain 2.0 version is successfully processing a high number of daily
transactions on a public network, where millions were raised through ICO (Initial Coin
Offerings), and the market cap increased rapidly.

Blockchain 3.0: DApps

DApps is also known as a decentralized application. It uses decentralized storage and

communication. Its backend code is running on a decentralized peer-to-peer network. A DApp
can have frontend code hosted on decentralized storages such as Ethereum Swarm and user
interfaces written in any language that can make a call to its backend like a traditional Apps.
Blockchain and cryptocurrencies are two terms often used interchangeably. However, there is a
big difference between the two. Cryptocurrencies are digital currencies that use blockchain as a
ledger for storing records of crypto transactions. However, blockchains have many uses beyond
cryptocurrencies, including storing and accessing medical data, supply chain and logistics
information, and financial records.
What is Blockchain?

A blockchain is a collection of records or an electronic database, like a spreadsheet. A

blockchain holds larger amounts of information, such as cryptocurrency transaction records,
stored in “blocks” or groups, unlike a regular spreadsheet.
These blocks are distributed across multiple computers or a “distributed ledger.” Once each
block reaches its storage limit, it is “chained” to a block filled previously, and a new block comes
into use.

What is Cryptocurrency?

Cryptocurrency is digital money with market value like other currencies. Cryptocurrencies can
also be used as a store of value like gold. The first cryptocurrency was Bitcoin which pioneered
blockchain technology.
Subsequently, other cryptocurrencies, such as Ether, came up with their own blockchains
(known as Ethereum).

Similarities Between Blockchain and Cryptocurrency

Intangible
Both blockchain and cryptocurrencies are intangible. Cryptocurrencies are intangible digital
tokens, which you cannot hold physically like the US dollar or the Indian rupee. The blockchains
used for storing cryptocurrencies do not exist in a single place or one physical data centre.

Advanced
Both blockchain and cryptocurrencies are technological advancements. Blockchain is the
underlying technology behind cryptocurrencies. Blockchain is much more advanced and secure
than traditional databases. Cryptocurrencies are technologically advanced than physical or
paper-based currencies.

Interdependent
Blockchain came into existence to record transactions of bitcoin, the world’s first
cryptocurrency. All major cryptocurrencies have blockchains for recording transactions. If
someone buys a new bitcoin, it is recorded in a bitcoin blockchain.

Differences Between Blockchain and Cryptocurrency

Inherent Nature
Blockchain is a storage technology used for saving data on decentralized
networks. Cryptocurrency is a medium of exchange like the US dollar. A blockchain can be used
for storing different types of information beyond cryptocurrency transaction records.

Monetary Value
All cryptocurrencies have a monetary value. You must have heard of Bitcoin hitting a high of
65,000 dollars (around 48 lac rupees) or Ether reaching 4,000 dollars (about 3 lac rupees). A
blockchain does not have any monetary value.

Usage
Blockchain technology has uses beyond cryptocurrencies. Blockchain can be used for recording
transactions in banking, healthcare, supply chain, and retail. Cryptocurrency is digital money,
which can be used for buying goods and services and for investment.
Mobility
Blockchain technology is decentralized and distributed all over the world. There is no single
location where all records of a blockchain are stored. Cryptocurrencies, although held in
blockchains, can be accessed via mobile wallets. If you have a bitcoin wallet, you can use it
anywhere for transacting with parties accepting bitcoins.

Transparency
Blockchain, being a public ledger, is highly transparent. Anyone can join a blockchain network
and view the information available. On the other hand, cryptocurrencies offer anonymity. So,
while anyone can see the source/destination of a bitcoin transaction, no one can know who is
behind the transaction.
What Is Distributed Ledger Technology (DLT)?

Distributed ledger technology (DLT) is the technological infrastructure and protocols that
allow simultaneous access, validation, and record updating across a networked database. DLT
is the technology blockchains are created from, and the infrastructure allows users to view any
changes and who made them, reduces the need to audit data, ensures data is reliable, and only
provides access to those that need it.

KEY TAKEAWAYS
 Distributed ledgers are maintained by a network of nodes, each of which has a copy of
the ledger, validates the information, and helps reach a consensus about its accuracy.
 Distributed ledgers have been around for decades but have become more well-known,
researched, used, and developed since Bitcoin was introduced.
 Distributed ledgers can be used in nearly every industry where data is collected and
used.
 All blockchains are distributed ledgers, but not all distributed ledgers are blockchains.
 Though DLT enhances accountability, security, and accessibility, it is still complex,
difficult to scale, and not subject to strong regulation.

History of Distributed Ledgers

Distributed computing is not new—businesses and governments have been using the concept
for several decades. In the 1990s, it became possible for multiple computers and users in
different locations to solve problems and return the solutions to a central location. 1

Advances in data science, computing, software, hardware, and other technologies have made
ledgers much more capable. Improved connectivity through intranet and internet protocols
allowed for much more data to be collected, analyzed, and used. However, because there can
now be many users with access to data, it is necessary to have someone verify the changes.

Computer and data scientists developed programs that reduced the need for auditing data.
These programs used automation and data encryption techniques to verify database
transactions or changes in a database's state. This is called consensus—the act of automated
majority agreement on transaction validity, where a transaction is simply a change made to a
database's state.

Distributed ledgers evolved into scalable and programmable platforms, as seen in Ethereum
and HyperLedger Fabric, where solutions can be created to use a database, or ledger, for
everything from tokenizing physical assets to streamlining manufacturing and other business
processes.

How Distributed Ledger Technology Works

DLTs allow information to be stored securely and accurately using cryptography. The data can
be accessed using "keys" and cryptographic signatures. Once the information is stored, it can
become an immutable database; the rules of the network, written into the coding of the
database programming, govern the ledger.

If something is immutable, it is unable to be changed. Distributed ledgers are only immutable if

they are programmed to be that way. Blockchains are always immutable because they are
decentralized public ledgers
Because they are decentralized, private, and encrypted, distributed ledgers are less prone
to cybercrime, as all the copies stored across the network needs to be attacked simultaneously
for the attack to be successful. Additionally, the peer-to-peer sharing and updating of records
make the whole process much faster, more effective, and cheaper.

Every device on a distributed ledger network stores a copy of the ledger. These devices are
called nodes—a network can have any number of nodes. Any changes to the ledger, such as
moving data from one block to another, are recorded across all nodes. Because each node has a
copy of the ledger, each one publishes its version with the latest transactions.

If the network reaches a consensus about the validity of the latest ledger, the transactions are
finalized, encrypted, and used as a basis for the following transactions. This is how blockchains
develop—each block contains encrypted information about the proceeding block, which makes
them impossible to change.

Distributed Ledger Technology Consensus Mechanisms

A central facet of DLT is how transactions are "approved". Without a universally-agreed

system of how items are accepted within the DLT, users of the DLT would be unable to
universally agree on how items to include and what items should be excluded.
This process of reviewing transactions is called a consensus mechanism, and a DLT may
leverage any of the following processes. Note that consensus mechanisms are constantly
evolving, and only several of the more common approaches are listed below.
 Proof of Work (PoW): In PoW, miners compete to solve complex mathematical
problems to validate transactions and create new blocks. This type of consensus
mechanism requires computational power, making it a less environmentally friendly
method. The notion of PoW is miners must financially invest and commit resources to
approving transactions, so they are incentivized to be "good actors".
 Proof of Stake (PoS): In PoS, validators hold a stake in the network and are chosen to
validate transactions based on the amount of the stake they hold. Seen as a more
environmentally-friendly option, PoS is at greater risk of a 51% attack (when one party
can hold a majority of tokens of a network to push through transactions at their will).
 Delegated Proof of Stake (DPoS): DPoS is a variant of proof of stake where the
network selects a limited number of validators to validate transactions. This variation
reduces the computational resources required to secure the network. In many ways, a
DPoS system is seen as a more democratic means of selecting approvers and offers
better scalability.
 Byzantine Fault Tolerance (BFT): In BFT, validators agree on a consensus value based
on a voting system. This mechanism strives to avoid the Byzantine Generals Problem
which describes a game theory problem where decentralized parties must arrive at a
consensus by leveraging a trusted central party.

Types of Distributed Ledger Technology

The Distributed Ledgers can be categorized into three categories:

1. Permissioned DLT: Nodes have to take permission from a central authority to access or
make any changes in the network. Mostly these types of permissions include identity
verification.
2. Permissionless DLT: There is no central authority to validate transactions, rather existing
nodes are collectively responsible for validating the transactions. Various consensus
mechanisms are used to validate transactions based on predefined algorithms. In the case of
bitcoin proof of work consensus mechanism is used.
3. Hybrid DLT: It is combined with both permissionless and permissioned DLTs and can
benefit from both of them.

Below are some of the types of DLT:

1. Blockchain: In this type of DLT, transactions are stored in the form chain of blocks and each
block produces a unique hash that can be used as proof of valid transactions. Each node has
a copy of the ledger which makes it more transparent.
2. Directed Acyclic Graphs (DAG): This uses a different data structure to organize the data
that brings more consensus. In this type of DLT, validation of transactions mostly requires
the majority of support from the nodes in the network. Every node on the network has to
provide proof of transactions on the ledger and then can initiate transactions. In this nodes
have to verify at least two of the previous transactions on the ledger to confirm their
transaction.
3. Hashgraph: In this type of DLT, records are stored in the form of a directed acyclic graph. It
uses a different consensus mechanism, using virtual voting as the form consensus
mechanism for gaining network consensus. Hence nodes do not have to validate each
transaction on the network.
4. Holochain: Holochain is termed as the next level of blockchain by some people because it is
much more decentralized than blockchain. It is a type of DLT that simply proposes that each
node will run on a chain of its own. Therefore nodes or miners have the freedom to operate
autonomously. It basically moves to the agent-centric structure. Here agent means
computer, node, miner,etc.
5. Tempo or Radix: Tempo uses the method of making a partition of the ledger this is termed
sharding and then all the events that happened in the network are ordered properly.
Basically, transactions are added to the ledger on basis of the order of events than the
timestamp.

Uses of Distributed Ledger Technology

Because of all these benefits of distributed ledger technology and this technology has the
potential to revolutionize many sectors like Financial, energy, healthcare, governance, supply
chain management, real estate, cloud computing, etc.

1. Banking: In the banking sector right now transfer of money can be both expensive and
time-consuming. Also sending money overseas becomes even more complex due to
exchange rates and other hidden fees included. Here DLT can provide a decentralized secure
network that will help to reduce the time, complexity, and costs required to transfer money.
This decentralized network will eliminate the need for third parties which makes this
system more complex and time-consuming.
2. Cyber Security: Nowadays cyber security has been emerging as a big threat to
governments, enterprises, and individual people also. So it is essential to find an effective
solution to secure our data and privacy against unauthorized access. In DLT, all information
is authorized and securely encrypted by various cryptographic algorithms. This provides a
transparent and secure environment and none of the data can be tempered by any entity.
3. Supply chain management: Supply chain is one of the complex structures itself. In this
structure, it is hard to trace where the fault happened. So here Distributed ledger
technology comes into the picture, Using DLT, you can easily trace the supply chain from the
 beginning to the end and can easily find out where a mistake or fault has happened. All the
data added to the DLT is validated and permanent and can not be altered. This transparency
of data enables us to trace from the beginning to the end of the ledger.
4. Healthcare: Distributed Ledger eliminates central authority and ensures rapid access to
secured and untempered data. Here important medical can be stored securely and no one
can change this data, even if someone tries to change it will be reflected everyone
immediately. DLT can be used in the insurance sector to trace false claims because of its
decentralized system.
5. Governance: DLT can be used in the government system to make it transparent among
citizens. Many governments have adopted blockchain in the governance system because of
the robustness of this system. It can be used as a voting system too. The traditional voting
system has many flaws and sometimes it is found that there are many false voting and illegal
activities that happen during voting. Online voting systems can be used to vote and with
security and fake votes can be easily checked. everyone will have their own identity. So that
any person sitting anywhere in the world can cast his vote.

How are Blockchain And Distributed Ledger Different?

In general blockchain and Distributed Ledger Technology are considered as same, but there are
some differences between these two technologies. Blockchain can be classified as a type of
Distributed Ledger Technology. We can say that Blockchain is a type of DLT, but every
Distributed Ledger can not be called a blockchain.
Blockchain is the parent technology of DLT. But the idea behind them is the same. Blockchain
technology has the potential to solve many problems in the banking and financial industry.
Here, blockchain is the advanced version of Distributed Ledger Technology with many useful
functionalities. Developers have many other variants of DLTs in the technology world. However,
they do not have the many real-life implementations and applications that blockchain has been
able to do.

Basis Distributed Ledger Blockchain Technology

Block In DLT, blocks can be organized in In Blockchain, blocks are added in the
Structure different forms. form of a chain.

It is more scalable because it does not

It is a subset of DLT, the power of the
need the power of a work consensus
work consensus mechanism adds more
Power of mechanism for the validation of each
functionalities and security.
Work transaction.

It does not require any tokens or In it, tokens must be considered while
Tokens digital currency. working with Blockchain.

Sequence It does not require any specific All blocks are arranged in a particular
Basis Distributed Ledger Blockchain Technology

sequence of data. series.

Trust among participating nodes is less

Trust among participating nodes is than DLT. Decision-making powers can
high. be on one hand because everyone can
Trustability mine.

Advantages of Using Distributed Ledger Technology In Blockchain

1. Security: All records of every transaction are securely encrypted. Once the transaction is
validated, it is completely secure and no one can update or change it. It is a permanent
process.
2. Decentralization: All network members or nodes have a copy of the ledger for complete
transparency. A decentralized private distributed network improves the reliability of the
system and gives assurance of continuous operations without any interruption. It gives
control of information and data in the hand of the user.
3. Anonymity: The identity of each participant is anonymous and does not possibly reveal
their identity.
4. Immutable: Any validated transactions can not be changed as they are irreversible.
5. Transparency: Distributed technologies offer a high level of transparency. Which is
necessary for the sectors like finance, medical science, banking, etc.
6. Speed: Distributed Ledger Technology can handle large transactions faster than traditional
methods.
7. Smart Contracts: Distributed Ledger Technology supports smart contracts which are self-
executing contracts with the terms of the agreement between buyer and seller being
directly written into lines of code. Smart contracts reduce the need for intermediaries and
offer transparency and automation in the execution of the contract terms.
8. Lower Costs: Distributed Ledger Technology eliminates intermediaries and reduces the
costs associated with intermediaries, which makes the system more cost-effective.
9. Improved Efficiency: Distributed Ledger Technology reduces the time and costs associated
with traditional transaction methods. It offers faster settlement times, reduced paperwork,
and increased efficiency.
10. Auditing: Distributed Ledger Technology makes auditing easier as every transaction is
recorded and the ledger cannot be altered. This improves the transparency and accuracy of
financial audits.
11. Resilience: Distributed Ledger Technology is more resilient than traditional databases as it
is spread across multiple nodes. This means that even if one node goes down, the network
can still function as the rest of the nodes can continue to validate transactions.
12. Traceability: Distributed Ledger Technology offers complete traceability of assets, from
their creation to their current ownership. This improves accountability and reduces the
risks of fraud and theft.
Disadvantages Of Distributed Ledger Technology

1. 51% Attack: The 51% attack is a bit concerning part of this distributed ledger technology
that is to be checked routinely.
2. Costs of Transaction: The connected nodes are expected to validate the transaction of a
given Distributed Ledger Technology which gives high transaction cost as the other nodes
are paid incentives to validate the transaction.
3. Slow Transaction Speed: The major disadvantage of this DLT is the slow speed of
transactions as multiple nodes are attached to this network and it takes time to validate the
transaction by all the other nodes.
4. Scalability Issues: Due to low speed and high transaction costs DLT faces very difficulties
to expand on a large scale.
5. Lack of Regulation: As DLT is a decentralized technology, it operates outside the control of
any centralized authority which can lead to a lack of regulation, making it difficult to hold
accountable any wrongdoings or fraudulent activities on the network.
6. Energy Consumption: Distributed Ledger Technology requires a significant amount of
energy to maintain the network and validate transactions, especially in the case of Proof of
Work consensus mechanisms, which can lead to a negative impact on the environment.
7. Complexity: Implementing and managing Distributed Ledger Technology can be complex
and requires a high level of technical expertise, which can be a barrier to entry for many
organizations and individuals.
8. Privacy Concerns: While the anonymity of participants on the network is considered an
advantage, it can also be a disadvantage as it can lead to privacy concerns and illicit
activities on the network.
9. Lack of Interoperability: Different Distributed Ledger Technologies may use different
protocols, which can lead to interoperability issues, making it difficult for different networks
to communicate and transact with each other.

Future of Distributed Ledger Technology

1. Experts in this area promote DLT as a solution for many problems that are present on the
internet and will drastically be able to solve all these problems. Distributed Ledger
Technology is termed the “Internet of Value”. Transactions and processes will occur in real-
time with the help of the internet.
2. Distributed Ledger Technology has the potential to impact problems in financial or banking,
cyber security, healthcare, government, data security, etc. sectors with effective solutions.
3. Enterprises and visionaries are now faced with the challenge of establishing networks of
entities that together can take advantage of DLT to radically change how they share and
keep records, and innovate where DLT can enable entirely new processes and business
models.
Big Picture: Industry Analysis

Introduction

Before launching a business venture with your capital, or someone else’s, it is a good idea to
analyze the overall attractiveness of the industry. An industry analysis makes no reference to
your particular company. In other words, how likely to succeed would any new company be in
this industry? Are there parts of the industry that are more attractive than others?

Loan officers or investors especially, are going to want to see an analysis of the industry. One
thing they will look for is growth potential. If you can show that the industry is rapidly growing,
you may get funding. From an investor’s point of view, they might simply want to have a dog in
the race—even if your company is not necessarily the best dog overall—it may still be the best
dog on hand.

One can establish growth potential by showing trends over time. For apps this would include
showing growth in sales of apps and the platforms on which the apps run—iPhone, iPod, iPad.

If your app duplicates functionality found in another device, a turn by turn GPS for example,
then you could show growth in the GPS industry. You might also want to show growth of
competing platforms and apps such as the Droid. However, you should be honest and
straightforward about your statistics. Investors are smart and can see through hype and
deception.

This chapter will also look at two tools used to perform industry analyses—S.W.O.T. and
Michael Porter’s five forces model.

Where Are We in the Life Cycle?

Many information systems projects are conceived of in a life cycle that progresses in stages
from analysis to implementation. The diagram below shows the stages that we touch in the
current chapter:

Industry Analysis - SWOT and Porter’s

The content of an industry analysis depends on the purpose of the report. There is no one size
fits all. However, if the business is seeking funds, investors will at a minimum want to see two
things:

 Industry analysis: An analysis of the industry in which the company operates. What are
the opportunities and threats inherent in the industry?
 Company analysis: An analysis of the competitive position of the company within that
industry. What are the strengths and weaknesses of the company?

There are a number of analysis techniques designed to get at both the industry and company
analysis. We will look at just two:

The first is very popular in the marketing discipline. It is an analysis of strengths, weaknesses,
opportunities, and threats (S.W.O.T.) analysis developed by Albert Humphrey in the 1960s. The
strengths and weaknesses compose the company analysis, whereas opportunities and threats
compose the industry analysis. Using terms from the SDLC, you can consider the strengths and
weaknesses as describing the current state of the company. The proposed future state of the
company will be planned taking into account the opportunities and threats. It is conventional to
show a S.W.O.T. analysis in a four cell grid.

Another very popular analysis tool is Michael Porter’s five forces model. (Porter, M.E. (2008)
The Five Competitive Forces That Shape Strategy, Harvard business Review, January 2008).
Porter analyzes an industry by looking at how hard it is to get in the industry (barriers to
entry), stay in the industry (threat of substitutes), and the bargaining position of suppliers to
and buyers of industry products and services. This helps identify the attractiveness of the
industry. You might think of Porter as helping to direct our focus to where the opportunities
and threats might be found. The fifth force is the competitive position of industry rivals—their
strengths and weaknesses.

An analysis of the iPhone app industry using S.W.O.T. analysis (above) and Porter’s five forces
model (below). Both models overlap in their analyses.
For example, with respect to your iPhone app, you might argue that barriers to entry are very
low. There are thousands of iPhone developers and it cost relatively little to develop an iPhone
app. The threat of substitutes includes the competing Droid and other smart phones and apps.

Suppliers to your industry include Apple, which supplies the iTunes store for distribution and
the developers. Apple’s bargaining power is very high since you must list your app on their
store and pay their commission. However, the bargaining power of developers is relatively low
since they compete in an open auction for your business.

The bargaining power of buyers is very strong since they can purchase from you or any of your
competitors. The only thing that makes this industry attractive is that it is growing at such a
phenomenal rate that there are business opportunities even for weak players. As the industry
matures, the weaker players will probably get squeezed out.

What is the size of the blockchain industry?

around USD 4.8 billion

Associate Researcher at Custom Market Insights™

The blockchain technology market size was estimated to be around USD 4.8 billion in 2021 and
is expected to reach USD 69 billion by 2030, with a CAGR of roughly 68% between 2022 and
2030.1
Who are the players in the blockchain market?

Which are the leading vendors in the Blockchain Technology Market? A major share of the
blockchain market has been accounted by IBM (US), AWS (US), Oracle (US), Huawei (China),
Accenture (Ireland). These companies are the leaders in the blockchain market, recognized as
star players.

What is the growth rate of the blockchain industry?

The Global Blockchain Software Market is expected to expand at a booming CAGR

of 107.5% during 2024-2031.12 Jan 2024
What is the structure of blockchain technology?
There are three key components to blockchain technology: The distributed ledger, the
consensus mechanism, and the smart contracts. The distributed ledger is a database that is
spread across a network of computers. The consensus mechanism is what allows the network
of computers to agree on the state of the ledger.18 Oct 2023
Platforms

1. Ethereum

Introduced in 2013, Ethereum is one of the oldest and most established blockchain platforms. It
provides a truly decentralized blockchain that is comparable to the Bitcoin blockchain network.
Manders said its key strength is that it enables true decentralization with support for smart
contracts. Its key weaknesses include slow processing times and higher transaction processing
costs compared to other platforms. Besides its role as a blockchain platform that underpins
enterprise applications, it has its own cryptocurrency called Ether.

The Ethereum platform has seen widespread adoption by technologists who

build decentralized applications, or dApps, on the Ethereum network. For example, there are
numerous platforms and exchanges for non-fungible tokens (NFTs) -- a type of digital asset that
can be exchanged on a blockchain. It has a mature ecosystem of tools for writing smart
contracts using the Solidity programming environment, which runs on the Ethereum Virtual
Machine. However, alternative blockchain networks can process transactions much faster at
potentially lower cost than Ethereum, though many observers expect this to change after
Ethereum adopts a more efficient security mechanism.

It also has an active developer community orchestrated by the Enterprise Ethereum Alliance,
which has more than 250 members, including Intel, JPMorgan and Microsoft.

The Ethereum community migrated from a proof of work (PoW) consensus mechanism to proof
of stake (PoS), which is more energy-friendly. The migration required an elaborate process to
spin up a separate, new type of blockchain called a Beacon Chain that has been merged into the
existing main Ethereum blockchain. The Ethereum Foundation estimated this reduces energy
use by 99.95% compared to the older approach.

The community was previously considering sharding, which involved splitting up the Ethereum
blockchain to expand the capacity to store data, scale throughput and cut network fees.
However, new techniques for combining transactions to be processed together, called layer 2
rollups, evolved faster than expected, and sharding was dropped from the roadmap. Now the
community is focusing on a simpler approach, called Proto-Danksharding, which streamlines
layer 2 rollups. The goal is to eventually support up to 100,000 transactions per second using
this new approach.
There are many things to consider when choosing a blockchain platform, including
performance and cost.

2. IBM Blockchain

IBM Blockchain is a private, decentralized blockchain network that has been the most
successful with enterprise clients who are less risk-averse, Manders said. He has seen the
biggest opportunities in using it to link into enterprise cloud and legacy technologies more
seamlessly than is possible in other decentralized networks.

The IBM Blockchain developer tool was designed to be flexible, functional and customizable.
IBM has also invested in creating a user-friendly interface to simplify critical tasks, such as
setting up, testing and rapidly deploying smart contracts.

Rakesh Mohan, IBM director of development, blockchain, said the company has seen significant
progress in financial services and banking, as well as supply chain.

Some examples of successful blockchain apps include IBM Food Trust, which has completed
more than 18 million transactions representing more than 17,000 products, and Blockchain
Community Initiative in Thailand, which supports services such as payment obligations and
enterprise auctions for 22 Thai banks.

IBM Blockchain Transparent Supply is designed to help enterprises improve traceability in

supply chain management. Top features support quality assurance for validating the
provenance of materials, improved forecasting and tools to reduce the cost of dispute
resolution, product recalls and document sharing. Various tools help manufacturing, retail,
pharmaceutical and consumer goods companies jump-start their blockchain rollout.

3. Hyperledger Fabric

Hyperledger Fabric is a set of tools for creating blockchain applications. Championed by the
Linux Foundation, it was built from the ground up with enterprise distributed ledger uses in
mind. It has a rich ecosystem of components that can be plugged into a modular architecture. It
works well in closed blockchain deployments, which can improve security and speed. It also
supports an open smart contract model that can support various data models, such as account
and unspent transaction output (UTXO) models.
Hyperledger Fabric can also improve data privacy by isolating transactions in channels or
enabling the sharing of private data on a need-to-know basis in private data collections. It also
enables high-speed transactions with low latency of finality and confirmation, according to its
proponents. It is supported by leading cloud providers including Amazon Web Services, IBM,
Google, Microsoft Azure and Oracle.

Arnaud Le Hors, senior technical staff member of blockchain, edge computing and web open
technologies at IBM, said the latest developments add support for an organization to join a
channel without copying the whole history of the ledger. This enables a quicker startup process
with less storage required. There is an active and diverse community around Hyperledger
Fabric that is working on adding more features related to consensus algorithms, additional
privacy options for GDPR compliance and operational improvements.

Key features to consider

Blockchain platforms consist of a wide range of components, which enables enterprises to

select the appropriate components for different kinds of capabilities, said Chris Georgen,
founder and managing director at Topl, which built a blockchain for sustainability.

Georgen recommended examining four features when evaluating platforms:

1. Whether a platform is open (public) or closed (private) and how that affects speed
and security. Anyone can join a public blockchain, which can make it easier to set up for
small businesses. The downside is open blockchains aren't as fast. Many blockchain
codebases can be modified to be either open or closed.
2. Consensus mechanism, such as PoW, PoS or Byzantine fault tolerance. PoW is the older
mechanism used in Bitcoin and Ethereum. The others are newer and less proven but faster
and more efficient, Georgen said.
3. Ledger technology and how it records transactions. Popular approaches include an
account model and UTXO. An account model records the balance, whereas UTXO is
analogous to cash with serial numbers. The account model is used in Ethereum, Stellar, Tron
and EOSIO. IBM Blockchain, Hyperledger Fabric and Hyperledger Sawtooth use UTXO.
4. Smart contract functions for capturing business logic on the blockchain. Popular
programming languages include Ethereum Solidity, WebAssembly languages and Digital
Asset Modeling Language.
4. Hyperledger Sawtooth

Another open source blockchain initiative hosted by Hyperledger and the Linux Foundation is
Hyperledger Sawtooth. One of its key advantages is that it allows enterprises to choose from
several consensus mechanisms for different use cases. One novel consensus mechanism
called proof of elapsed time can integrate with hardware-based security technologies to enable
"trusted execution environments" of program code to run in secure enclaves, which are
protected areas of computer memory. It also supports practical Byzantine fault tolerance which
can allow nodes to reach consensus if hackers or other bad actors compromise some nodes.
Sawtooth Raft uses a leader-based consensus algorithm that provides crash tolerance for a
private and controlled group of users.

Shawn Amundson, principal consultant at Bitwise IO, said the most common applications are
for developing supply chain systems and customizing Sawtooth for specific purposes, such as
novel consensus algorithms.

A Sawtooth library enables developers of custom distributed ledgers to pick and choose which
pieces of Sawtooth they use in their application. Sawtooth also supports Splinter for
networking, which provides dynamic private circuits (groups of nodes); Hyperledger Transact
for transaction processing to enhance smart contract capabilities; and Augrim for consensus,
which expands the number of supported algorithms.

5. R3 Corda

There is some debate whether R3 Corda is technically a blockchain or an alternative type of

distributed ledger. It uses a novel consensus mechanism in which transactions are
cryptographically linked but does not periodically batch multiple transactions into a block.
Even the official Corda site describes it as "both a blockchain and not a blockchain." One of the
key benefits of this approach is that all transactions are processed in real time, which can
improve performance compared to other types of blockchains.

The R3 consortium has a strong following in the financial industry, since Corda provides an
attractive approach for financial transactions and smart contracts with strong security. Leading
proponents include Bank of America, HSBC, Intel and Microsoft. It supports tools that automate
business logic that can execute across company boundaries. In 2022, the group launched a
technical preview of Corda Payments, which it claimed will simplify the process for building
distributed payment capabilities into apps.
A recent platform update purportedly improves availability and scalability and supports
interoperability with other platforms. One key innovation is a delivery-versus-payment
mechanism designed to improve settlement with other distributed ledger platforms.

Manders said Corda has a strong chance of becoming the de facto network of insurance-related
transaction processing. However, it faces competition from other federated blockchain
networks that can process transactions faster and cheaper.

6. Tezos

In development since 2014, Tezos is an older platform that supports decentralized applications,
smart contracts and novel financial instruments, such as NFTs, which can be thought of as a
modern variation on trading cards that are tied to digital assets. The platform supports a
dynamically upgradable protocol and modular software clients that enable it to adapt to new
uses. It supports a PoS consensus mechanism that improves efficiency compared to Bitcoin and
the original Ethereum implementation. An on-chain upgrade mechanism allows developers to
add new features without forking, which would require spinning up a new blockchain and
migrating users over. The Tezos community has been upgrading the platform at a rapid clip
with enhancements that improved performance and increased the size limit on smart contracts.
It has also developed tools to help automate the process of weaving NFTs into enterprise supply
chains.

The latest update proposal, called the Oxford protocol, promises several new enhancements.
Adaptive issuance adjusts the creation of new currency in balance with the total supply. An
improved PoS mechanism creates new roles for nodes. The update also reintroduces a new
version of timelocks (which was previously removed), to improve security and smart rollups to
speed up the transaction rate.

7. EOSIO

The EOSIO blockchain platform was first launched as an open source project in 2018. It's
optimized for developing decentralized applications and smart contracts. It uses a complex
consensus mechanism based on PoS that provides better performance than older mechanisms,
such as Ethereum, according to its proponents. It also includes support for a governance feature
for voting on changes to the platform.
Key strengths include fast transactions and advanced account permission features for
deploying applications. Over 400 applications have been developed on the platform, including
identity management, SCM and gaming. The community also provides tools for customizing
blockchain implementations for various decentralized use cases in SCM, healthcare and DeFi.

EOSIO-Taurus, a new blockchain released in June, was forked from the EOSIO codebase and is
designed for enterprise performance on private blockchains. It includes features to handle a
larger volume of transactions more securely and to improve resilience, automatic failover and
disaster recovery. In addition, it could make it easier to connect the blockchain to external
systems. New debugging tools are meant to improve smart contract development.

8. Stellar

Stellar is a newer blockchain platform optimized for various kinds of DeFi applications. It uses
Stellar Consensus Protocol, which purportedly can speed up the time required to process and
finalize transactions on a public blockchain network. It also includes security mechanisms for
shutting out bad or questionable actors in a financial transaction. It has been adopted by
several companies for international trade and exchanging money across borders. Examples of
applications built on the Stellar blockchain include MoneyGram for money transfer, Circle for
payments and treasury infrastructure, and Flutterwave for integrating payment processing into
enterprise applications. The Soroban smart contract platform helps streamline development
of Web 3.0 and DeFi applications on Stellar.

9. ConsenSys Quorum

Quorum is a customized version of Ethereum developed by financial services company

JPMorgan. It takes advantage of the core work on the Ethereum blockchain platform and
repackages it into a hardened environment suitable for banks. It has been optimized to support
high-speed transactions between institutions, such as banks and insurance companies on a
private network.

ConsenSys partnered with Visa to help bridge central bank digital currencies with existing
payment networks and make it easier to create new services. ConsenSys also worked with
Mastercard to improve rollup mechanisms that bundle multiple transactions together to
improve efficiency. Quorum also adds various privacy enhancements to Ethereum to improve
support for regulations such as GDPR in Europe and CCPA in California.
ConsenSys bought the Quorum platform's intellectual property assets from JPMorgan in late
2021 and integrated them into its own work to create the ConsenSys Quorum open source
protocol layer. ConsenSys has positioned the offering as a way for enterprises to accelerate
development of enterprise applications that complement other Ethereum-based tools. The firm
provides development services for the combined platform to enterprise customers, including
JPMorgan and South African Reserve Bank. In July 2022, it launched the Quorum Blockchain
Service on Microsoft Azure as a fully managed service to help simplify enterprise deployments.

The company has developed an extensive ecosystem of supporting tools and services to
enhance Quorum's value. Infura is a suite of blockchain APIs and developer tools. MetaMask is a
crypto wallet and gateway to blockchain apps for end users. MetaMask Institutional helps
improve workflows for compliance, data aggregation, monitoring, reporting and custody for
enterprises. Diligence supports smart contract audit and security services.
Benefits of Blockchain:
 It is safer than any other technology.
 To avoid possible legal issues, a trusted third party has to supervise the transactions and
validate the transactions.
 There’s no one central point of attack.
 Data cannot be changed or manipulated, it’s immutable.

1. Header: It is used to identify the particular block in the entire blockchain. It handles all
blocks in the blockchain. A block header is hashed periodically by miners by changing the
nonce value as part of normal mining activity, also Three sets of block metadata are
contained in the block header.
2. Previous Block Address/ Hash: It is used to connect the i+1 th block to the ith block using
the hash. In short, it is a reference to the hash of the previous (parent) block in the chain.
3. Timestamp: It is a system verify the data into the block and assigns a time or date of
creation for digital documents. The timestamp is a string of characters that uniquely
identifies the document or event and indicates when it was created.
4. Nonce: A nonce number which uses only once. It is a central part of the proof of work in
the block. It is compared to the live target if it is smaller or equal to the current target.
People who mine, test, and eliminate many Nonce per second until they find that Valuable
Nonce is valid.
5. Merkel Root: It is a type of data structure frame of different blocks of data. A Merkle
Tree stores all the transactions in a block by producing a digital fingerprint of the entire
transaction. It allows the users to verify whether a transaction can be included in a block
or not.
Key Characteristics of Blockchain Architecture

 Decentralization: In centralized transaction systems, each transaction needs to be

validated in the central trusted agency (e.g., the central bank), naturally resulting in cost
and the performance jam at the central servers. In contrast to the centralized mode, a
third party is not needed in the blockchain. Consensus algorithms in blockchain are used
to maintain data stability in a decentralized network.
 Persistency: Transactions can be validated quickly and invalid transactions would not be
admitted by persons or miners who mining the crypto. It is not possible to delete or roll
back transactions once they are included in the blockchain network. Invalid transactions
do not carry forward further.
 Anonymity: Each user can interact with the blockchain with a generated address, which
does not disclose the real identity
of the miner. Note that blockchain cannot guarantee perfect privacy preservation due to
the permanent thing.
 Auditability: Blockchain stores data of users based on the Unspent Transaction Output
(UTXO) model.
Every transaction has to refer to some previous unspent transactions. Once the current
transaction is recorded into the
blockchain, the position of those referred unspent transactions switches from unspent to
spent. Due to this process, the transactions can be easily tracked and not harmed between
transactions.
 Transparency: The transparency of blockchain is like cryptocurrency, in bitcoin for
tracking every transaction is done by the address. And for security, it hides the person’s
identity between and after the transaction. All the transactions are made by the owner of
the block associated with the address, this process is transparent and there is no loss for
anyone who is involved in this transaction.
 Cryptography: The blockchain concept is fully based on security and for that, all the
blocks on the blockchain network want to be secure. And for security, it implements
cryptography and secures the data using the cipher text and ciphers.

Types of Blockchain Architecture

1. Public Blockchain:

A public blockchain is a concept where anyone is free to join and take part in the core
activities of the blockchain network. Anyone can read, write, and audit the ongoing activities
on a public blockchain network, which helps to achieve the self-determining, decentralized
nature often authorized when blockchain is discussed. Data on a public blockchain is secure
as it is not possible to modify once they are validated.
The public blockchain is fully decentralized, it has access and control over the ledger, and its
data is not restricted to persons, is always available and the central authority manages all the
blocks in the chain. There is publicly running all operations. Due to no one handling it singly
then there is no need to get permission to access the public blockchain. Anyone can set
his/her own node or block in the network/ chain.
After a node or a block settled in the chain of the blocks, all the blocks are connected like
peer-to-peer connections. If someone tries to attack the block then it forms a copy of that data
and it is accessible only by the original author of the block.
Advantages:
1. A public network operates on an actuate scheme that encourages new persons to join and
keep the network better.
2. There is no agreement in the public blockchain.
3. This means that a public blockchain network is immutable.
4. It has Rapid transactions.
Disadvantages:
1. Public blockchain can be costly in some manner.
2. The person need not give identity, that’s why there is a possibility of corruption of the
block if it is in under attack.
3. Processing speed is sometimes slow.
4. It has Integration issues.

2. Private Blockchain

Miners need permission to access a private blockchain. It works based on permissions and
controls, which give limit participation in the network. Only the entities participating in a
transaction will have knowledge about it and the other stakeholders not able to access it.
By it works on the basis of permissions due to this it is also called a permission-based
blockchain. Private blockchains are not like public blockchains it is managed by the entity that
owns the network. A trusted person is in charge of the running of the blockchain it will
control who can access the private blockchain and also controls the access rights of the
private chain network. There may be a possibility of some restrictions while accessing the
network of the private blockchain.
Advantages:
1. In a private blockchain, users join the network using the invitations and all are verified.
2. Only permitted users/ persons can join the network.
3. Private Blockchain is partially immutable.
Disadvantages:
1. A private blockchain has trust issues, due to exclusive information being difficult to access
it.
2. As the number of participants increases, there is a possibility of an attack on the
registered users.

3. Consortium Blockchain
A consortium blockchain is a concept where it is permissioned by the government and a
group of organizations, not by one person like a private blockchain. Consortium blockchains
are more decentralized than private blockchains, due to being more decentralized it increases
the privacy and security of the blocks. Those like private blockchains connected with
government organizations’ blocks network.
Consortium blockchains is lies between public and private blockchains. They are designed by
organizations and no one person outside of the organizations can gain access. In Consortium
blockchains all companies in between organizations collaborate equally. They do not give
access from outside of the organizations/ consortium network.
Advantages:
1. Consortium blockchain providers will always try to give the fastest output as compared to
public blockchains.
2. It is scalable.
3. A consortium blockchain is low transaction costs.
Disadvantages:
1. A consortium blockchain is unstable in relationships.
2. Consortium blockchain lacks an economic model.
3. It has flexibility issues.

Core Components of Blockchain Architecture

1. Node: Nodes are network participants and their devices permit them to keep track of the
distributed ledger and serve as communication hubs in various network tasks. A block
 broadcasts all the network nodes when a miner looks to add a new block in transactions to
the blockchain.
2. Transactions: A transaction refers to a contract or agreement and transfers of assets
between parties. The asset is typically cash or property. The network of computers in
blockchain stores the transactional data as copy with the storage typically referred to as a
digital ledger.
3. Block: A block in a blockchain network is similar to a link in a chain. In the field of
cryptocurrency, blocks are like records that store transactions like a record book, and
those are encrypted into a hash tree. There are a huge number of transactions occurring
every day in the world. It is important for the users to keep track of those transactions,
and they do it with the help of a block structure. The block structure of the blockchain is
mentioned in the very first diagram in this article.
4. Chain: Chain is the concept where all the blocks are connected with the help of a chain in
the whole blockchain structure in the world. And those blocks are connected with the help
of the previous block hash and it indicates a chaining structure.
5. Miners: Blockchain mining is a process that validates every step in the transactions while
operating all cryptocurrencies. People involved in this mining they called miners.
Blockchain mining is a process to validate each step in the transactions while operating
cryptocurrencies.
6. Consensus: A consensus is a fault-tolerant mechanism that is used in computer and
blockchain systems to achieve the necessary agreement on a single state of the network
among distributed processes or multi-agent systems, such as with cryptocurrencies. It is
useful in record keeping and other things.
There are different kinds of consensus mechanism algorithms, each of which works on
different principles:
 Proof of Work (PoW): Proof of Work required a stakeholder node to prove that the work
is done and submitted by them certifying them to receive the right to add new
transactions in the blockchain.
 Proof of Stake (PoS): The proof of Stake is also a common consensus algorithm that
evolved as a low-cost low-energy-consuming, low-energy-consuming alternative for the
PoW algorithm. For providing the responsibilities the public ledger provides by the virtual
currency token like Bitcoin and Ethereum.
 Proof of Capacity (PoC): Proof of Capacity (PoC) allow sharing of memory space of the
nodes in the blockchain network.
 Proof of Elapsed Time (PoET): It encrypts the passage of time cryptographically to reach
an agreement without expending many resources.

Blockchain Architecture Vs Database

Below are some of the differences between blockchain architecture and database:

Paramete
rs Blockchain Architecture Database

Blockchain is decentralized because there is no

single point of failure and there is no central The database is Centralized.
Control authority to control the blockchain.
Paramete
rs Blockchain Architecture Database

Operation The database has Create, Read,

Blockchain has only an Insert operation.
s Update, and Delete operations.

The database is not fully robust

It is robust technology.
Strength technology.

The database is a fully mutable

Blockchain is immutable technology and we
technology, The data can be
cannot change it back or we cannot go back.
Mutability edited in the database.

Anyone with the right proof of work can write In the database reading and
Rights on the blockchain. writing can do so.

It is faster as compared to
It is slow in speed.
Speed blockchain