24 Nov Analyzing blockchain and its features
One of the most basic characteristics of a Blockchain network is its type. There are two types of networks, depending on the action permission users have.
Initially, some networks operate without permission (permissionless) and with permission (permissioned). An easy and quick way to understand the immediate difference between them is to think of a simple example, the difference in usage between two types of internet networks (business-home).
Permissionless Blockchains are like the internet we have at home and have freedom of movement, while permissioned Blockchains are like the internet a business has, where there are restrictions on what its users are allowed to do.
Licensed networks, therefore, have restrictions on users’ freedom of movement. Particularly:
1. Permissionless – Public: Blockchain networks that operate without permission have a decentralized digital public ledger that is open to any user (miners, developers, network users) to move as they wish, without needing the permission of someone central authority.
This particular type of blockchain is usually open-source and free for anyone to download and participate in. Due to their nature, anyone can view the history of all network transactions as well as proceed to issue blocks at will.
In specific networks, as access is free, there is a possibility that attempts will be made to alter the transactions already carried out so that specific users can benefit. To prevent such a scenario, various consensus protocols have been created, which between users create rules for the operation of the network.
2. Permissioned – Private: In the networks that operate with permission, for the participation of users it is necessary to provide permission from some central authority, centralized or decentralized.
Since it is a closed type network there is the possibility to rights are given to the user for the actions he can take. That is if he himself can see the transactions that have been made, create new blocks, or both. As with permissionless networks, consensus protocols are used.
However, in this particular case, the protocols are differentiated and require much less computing power for their execution. The ideal use of this type of Blockchain is for businesses that manage sensitive data and don’t want it to be available to third parties.
Finally, even in this particular type of network, although there is relative trust between users, malicious attempts may be made to tamper with data. However, since it is a network with all its users registered, revoking rights and detecting such attempts is a quick and easy process.
Key features of Blockchain
Four main characteristics differentiate Blockchain from others hitherto known peer-to-peer networks.
1. Decentralization: In the hitherto known transaction systems, for the realization of each transaction, needs approval from some central authority (e.g. in the case of a bank, from the central server) to perform this action. It has resulted in higher operating costs and a proportional increase in size computing power that the system needs to have. In Blockchain the existence of a central principle is not necessary.
2. Durability: In such a network it is almost impossible to delete or modify transactions. Due to the way the blocks are structured and the features that have, invalid registrations – transactions detected are rejected by the network.
3. Anonymity: Each user of a blockchain is assigned a random address, which uses himself to carry out the transactions. To obtain one
address no personal data of the user such as name, surname, telephone, address, etc. only his email address, thus achieving anonymity.
4. Auditability: Blockchain stores data about the user taking based on the Unspent Transaction Output (UTXO) model. The specific model used by various platforms such as Bitcoin is the set of non of spent coins remaining in the user’s account. An example of the use of such a similar model in the everyday world is the accounting balance which has a bank account. Any movement that takes place should it is directly related, through data, to the previous one. When it takes place transaction is to be validated a process is followed in which, it is recorded in the network and the status of the balance to be used for the current transaction changes from available to unavailable.
Decentralized ledger
A key feature of this technology that is often mentioned is that it is a decentralized ledger also known as a decentralized ledger or DLT. Similar to the other books of ownership, which exist for many years and refer to the owner of goods, so also in Blockchain is a decentralized ledger that acts as a record for the recording of any movement, e.g. transaction, mining of a new block, etc., which takes place within its network and on the other hand, it shows the owner of each asset.
This particular file can be available to all participants if it is public while it can it is private when specific users have access to specific data of its file. The file is saved and shared among many network users. In this, only valid and confirmed transactions are recorded. Maintaining such a file ensures immutability, historicity, transparency of movements and because of it sharing, and data retention security.
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