Technology: December 2016

BlockChain is a consensus based secure decentralized public database/ledger which stores information immutably over peer-to-peer network.

It is a decentralized database which stores information in the form of transactions.
It can be private or public
It generally stores data in immutable manner
It is highly secure. It is secure than traditional storage
Data gets stored via consensus based algorithms
Uses Cryptography very heavily. (Cryptography is a method of encrypting a data in such a format so that it cannot be read or understood by someone very easily, until and unless he is the owner or has the key).

BITCOIN is a decentralized virtual cryptocurrency built on top of blockchain. It is a product built on top of BlockChain technology.

Bitcoin is the largest cryptocurrency built on top of Blockchain technology.
Bitcoin removes the dependency on trusted third party to execute the transaction
Transaction gets executed by peers based on consensus based algorithm & recorded in the blocks by the miners
As of Nov 2016 there are 16M bitcoins in circulation & 1bitcoin(BTC) is worth 730 USD
Bitcoins allows you to execute a transaction with out trusting the receiving party within fraction of seconds
Yes. Even cross border transaction can be executed in seconds

BITCOIN is a decentralized virtual cryptocurrency built on top of blockchain

MINING is the process of recording the transactions as a block into the block chain of that currency

The are many ways to get any virtual currency
Simplest way is to buy is using flat currency(ie govt exchange) through exchange
Another way is to earn it through mining by investing computational power into it.
So what will miners do if they mine a particular virtual currency?
Answer is that they are asked to solve a very complex computational problem to identify that next block in the block chain
In return of doing this computation they are rewarded with some virtual coins like bitcoins, Ethereum etc.
Miners use CPU power to identify a nonce (number used only once) through which they can create the digest/signature of the next block n the BlockChain which is less that the recently added block. Miners who do it first announce the answer to entire network & get the reward.

Consensus Algorithm is Computation methodology of resolving conflicts in BlockChain

BlockChain in Real Life is a data structure - Arrangement of data in a computer memory(a structured way of storing data)

More details:

It can be imagined like a book where each page reference to the previous page through a page number one less than the current page number.
Easy to detect if a page has been removed
Easy to arrange the pages & identify suspicious activity. That's why page numbers are important in agreements
What if the content has been altered? It can also be identified as page numbers are produced by crunching the content of the previous page. If any one changes the content of the page then next page number will not match if we try to regenerate it using altered page content

Even More details:

In real Block chain case, each block is built on top of the recent block and use its previous block's content as a signature.
Building a block and adding it in the blockchain is the task of the miner nodes
In a public Block chain it is made computationally difficult to add a block to prevent attacks.
Miners try to guess a number in such a way that if it gets crunched with the most recent block's fingerprint than it will create a new fingerprint which will be less that the last/most recent block in the Blockchain.
It takes time and computational power to add a block in the Blockchain. Hence there is some reward (25 BTC in case of bitcoin block chain)
Private blockchain can choose other methods to add a block as they can trust the miners using a contract etc.

In Summary:

It is a decentralized distributed ledge (data structure) where data is being stored inside blocks in form of transactions.
Remove the dependency on the trusted third party for recording the data in Blocks
In Public blockchain, more complex algorithm require to avoid the malicious activities
Since each block is built on top of previous block immutablitiy has been achieved
Very difficult to fake a block and very very easy to detect the fake block
This all exits in memory of the computers
Every participant of the block chain contain the almost same copy of the block chain

Priave and Public Blockchain

Public Blockchain

Anyone can read/write without explicit authorization
More complex rules for better security
Complex consensus algorithm
Computationally expensive to mine & add a block
No one owns it
Computational power is distributed globally
example: Bitcoin block chain, Ethreum Blockchain etc

Private Blockchain

Only authorized nodes can read/write the transaction data
Private, hence security can be implemented easily
One authorized node can be the arbitrator for any dispute
Easy or computatinally less expensive to add a block
One or more private entities own the block chain
eg: RecordsKeeper blockchain, Icici bank's blockchain etc

When to use a blockchain

When you want to store something immutably
When things keep adding but older one do not change

eg: Court Judgements, Health records

When you want to decentralize the control

eg: identity management system

Proof of ownership.

When you want to prove that you are the owner of the digital document

proof of existence systems like Block.ai

Why Block chain is considered more secure:

Nodes follow longest chain rule
Computationally expensive
Decentralized in nature

How Blockchain can be attacked:

51% attack

Often considered as a very large flaw in public BlockChain like bitcoins blockchain
Let's say if a single entity contributed the majority of the network's mining hashrate, then they would have power to manipulate the public ledger
It is theoretically possible because Blockchain is publically open

Eclipse attack

Cripple a node in such a way that it can not talk to other nodes in the network
In that case less percentage owner of the network hashrate can launch the attack
eg: 3 nodes with 30%, 30% & 40% network hashrate power
If node 2 is crippled in such a way that it cannot talk to node1 then node 3 can control the Blockchains public ledger

Can I setup my own blockchain

There are many ways to setup your own block chain
Private blockchain will be fully owned by you. You will be responsible for its security
You need to take care of miners. You setup your own miners
Multichain

Multichain is the most easy way to setup a private blockchain
It is opensource and founded by Mr. Gideon Greenspan
RecordsKeeper is the official partner of Multichain.

OpenChain

It is open source distributed ledger technology. It is suited for organizations wishing to issue and manage digital assets in a robust, secure and scalable way.

Anyone can spin up a new Openchain instance within seconds
Adiministrator defines the rules
Every transaction on the ledger is digitally signed, like with Bitcoin.

Ethereum

One can setup a private blockchain in Ethereum using Geth

Bitcoin Core

If you are a tech savvy you can also fork the bitcoin repository and setup your own blockchain
It will be complex

RecordKeeper and summary:

Record keeper is a record keeping solution for individuals and businesses
Records or documents stored in recordskeeper are immutable
Records remain highly structured without explicit structure
Highly private using PKI infrastructure
Available in SaaS and onpremise implementation

Use Cases:

Managing and structuring corporate records through automation
Health record management for health care industry
Invoice & receipt management system for supply-chain, logistic & E-com industry
KYC solutions for banks
Archiving solutions for large enterprises
Proof of ownership, creation and existence

Technology

Sunday, 25 December 2016

MultiChain

BlockChain

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