Friday, 22 September 2017

Warning! Technical jargon... Part 1

Nah... Its really not that complicated, well maybe.

So as part of our R&D exercise, we developed the Kryptosys Demo Framework to showcase our work on Blockchain technology. It's an ever expanding project for now and will continue to grow as we build more and more solutions.

You can register for a free account here: Kryptosys Demo Framework Sign Up

Anyways, lets dive deeper into the Blockchain. This is how it looks like, well at least in our Bitcoin implementation.

Yah its just a file, with a hash number, a header, some contents in the form of in/out ledgers and digital signatures. A bunch of these files make up a block and a bunch of blocks make up the Blockchain and is distributed across a peer-to-peer network. (Of course I'm oversimplifying this... there are a lot of other things going on such as compression, more cryptography etc.)

Have you ever downloaded something via a Torrent before? I'm asking because I don't know and have never done it... Now this 'Torrent' is an example of a peer-to-peer network, albeit to 'share' files. The files that you are trying to access exists in multiple other's computers which allows you to download them faster and more efficiently.

In Bitcoin's implementation, the Blockchain is a ledger of transactions across a peer-to-peer network, distributed and replicated every 10 minutes or so. The same methodology and protocol applies across multiple Blockchain implementations with some variations. 

Wait a minute... you mean there are multiple Blockchain implementations? 

Yes, there are many people building different Blockchain frameworks, with varying successes... Think about it as multiple car makers with different types of engines. The engines run on the same internal combustion technology (i.e. the Blockchain protocol) but they are built a bit differently, therefore some engines may be more powerful or more efficient than others.

3 key concepts you need to understand about the Blockchain are consensus, decentralized and trustless.

Consensus :
The network needs to agree with what is being put in before it is replicated and distributed, transactions are put into the network via an extensive Proof of Work (PoW) algorithm. This PoW requires an entity to perform a set of actions or calculations to prove that the transaction is valid before being committed to the chain. In a cryptocurrency implementation, the entities performing the PoW are rewarded with a small transaction fee. This process is often termed as 'mining'.

There is no single 'database' which stores the Blockchain, it is distributed across a peer network which performs various actions and calculations to maintain it, and because it is replicated across millions of computers and devices across the world, there is no single point of failure.

As committing transactions to the chain are autonomous; it does not require a central authority (such as a bank) to verify or approve any transactions, therefore it cannot be controlled or 'owned' by a single entity.

So as it stands today, being a consensus, trustless and decentralized protocol enables people to trust to it to run a ledger of over USD 100 Billion.

Hey, don't take my word for it. Take a look at the latest numbers here:

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