Blockchain in 2 minutes | Karthikeyan Veeran: Recent Episodes
Karthikeyan Veeran
Hi, I am Karthikeyan Veeran. I am a Blockchain Expert. I am also an Executive coach. I solve complicated problems that others can't. In the past, My work has generated businesses, like yours, many millions of dollars of value. ✅ Intelligent automation and RPA. ✅ Data analytics and AI. ✅ Technology strategy and digital transformation. ✅ Fixing broken projects, programs or businesses. ✅ Executive coaching and mentoring.
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What is mean by DAO? The DAO stands for Decentralized Autonomous Organization. It is an organization that is both autonomous and decentralized. It is represented by rules encoded as a computer program that is transparent, controlled by shareholders, and not influenced by the central government.
A DAO can be seen as the most complex form of a smart contract. A smart contract is a computer program that autonomously exists on the Internet, but at the same time, it needs people to perform a task that it can't do by itself.
A DAO's financial transaction record and program rules are maintained on a blockchain. Since DAO runs on a blockchain, and it's running on a distributed network, you can have multiple combinations of different parties exchanging value and reaching agreements. It means that, to a Decentralized Autonomous Organization, it doesn't matter if you are a human being or you're a robot. You can actually have devices communicating with devices, or devices communicating with people, or people communicating with people. To DAO, it makes no difference because as long as it's programmed into the collection of smart contracts, the whole thing can run automatically and immutable.
Storing Data in a Blockchain
A blockchain handles data differently than a traditional database. One of the biggest differences is that a blockchain does not support CRUD operations. The only database operations are Write, which is the same as Create, followed by populating data before writing, and Read. After data has been placed in a block and added to the blockchain, that data cannot change. A blockchain does not have Update and
Delete operations.
The other big difference between blockchain data storage and databases is their location. A complete copy of the blockchain is stored on every full blockchain node. Much of the difficulty in maintaining a blockchain network is ensuring that all blockchain nodes store the same data. Each blockchain implementation has strict rules for maintaining a synchronized blockchain across the network, and those rules make detecting differences between nodes easy (and quick).
This distributed storage property of a blockchain makes it extremely resilient, because the failure of any node or nodes will have a negligible effect on the rest of the blockchain network. Blockchain storage was never designed for high-performance situations. The storage method does support fast traversals through the block tree, but accessing individual data items within blocks takes some time. Remember that blocks can contain data in different formats, which must be filtered for searching.
Making blocks immutable
The reason why so much effort is put into ensuring consensus is that after a block is added to the blockchain, it never changes. Well, that’s the goal. Technically, it is possible to change blockchain data, but it is very, very hard to do and very easy for anyone to detect the change. Using POW consensus protocol, the level of effort alone makes changing blocks pretty close to impossible.
Let’s understand why.
So, Before you add a block to the blockchain, you must calculate a cryptographic hash of the previous block. That is the link to the previous block and the guarantee that it will never change. When you calculate the hash value of the previous block, that block’s header (which is part of the data used to calculate the hash value) includes the hash of its predecessor block. So if anyone ever changes any block, all blocks in the blockchain after that one are invalid. They’re invalid because the hash values for all subsequent blocks don’t match up.
It is easy to validate a blockchain. All you have to do is step through the blockchain, block by block, and make sure that the hash value stored in each block is the correct hash of the previous block header. As long as all the hashes match, the blockchain is valid. That’s why blockchains are called immutable. You can change blockchain data, but doing so immediately invalidates that copy of the blockchain.
Proof of Stake: The Proof of Stake (PoS) consensus protocol will likely replace Proof of Work. The developers of Ethereum already have plans to move to this protocol. The Proof of Stake protocol provides a similar level of consistency as the current Proof of Work protocol without using so much computing power (and wasting energy). Each node that wants to compete to add a new block locks some of its cryptocurrency and submits it as a bet. The “winning” node that gets to add the new block to the blockchain is chosen based on the size of the bet and other criteria intended to randomize the selection. The random part of the selection criteria keeps the richest node from always adding new blocks.
In the case of PoS algorithm, a set of nodes decide to stake their own cryptocurrencies for the transaction validation. They are called 'stakers.' In proof of stake, the creator of a new block is chosen in a deterministic way, depending on its wealth, also defined as stake. It does not give any block reward, so miners take the transaction fees only. Proof-of-Stake can be several thousand times more cost-effective as compared to proof of work.
Proof of Work:
Proof of Work (PoW) use lots of energy and is the most popular consensus protocol used today, and is used by both bitcoin and Ethereum. Proof of Work means that some nodes compete to try to be the first to solve a mathematical puzzle. The puzzle is to find a random value to combine with a block’s header, such that the hash of the combined data matches a pattern. Solving the puzzle is hard, but verifying the solution to the puzzle is easy. The first node to solve the puzzle receives a reward for doing the work, and gets to add the new block to the blockchain. The block, along with the value the winning node found to solve the puzzle, is sent to all nodes. Each node quickly verifies the block and then adds it to their local blockchain. Although Proof of Work is the most popular consensus protocol and works well, it takes enormous computing power to complete. That means Proof of Work requires computers to use lots of energy, which produces a lot of heat.
Consensus algorithm The first rule blockchain nodes must agree to is how to allow new blocks to be added to the blockchain. Because no node has more authority than any other node, the nodes use consensus to agree to add new blocks. Consensus in this sense simply means that when enough nodes agree to take some action, that the action is approved and agreed upon by all nodes. Most consensus strategies use simple majorities to succeed. So, as long as more than half of nodes agree to take some action, the action is approved
The consensus algorithm is the method of gaining consensus on a change of data over the system or distributed network. Consensus algorithms are heavily used in blockchains as they enable the network of unknown nodes to reach consensus on the data that is being stored or shared through the blockchain.
Types of consensus algorithms? There are many types of consensus algorithms or techniques available. The most popular consensus algorithm is:
- Proof-of-Work(PoW)
- Proof-of-Stake(PoS)
- Delegated Proof-of-Stake(DPoS)
- Proof-of-Authority(PoA)
- Proof-of-Elapsed Time(PoET)
- Byzantine Fault Tolerance
Benefits of Blockchain that you know?
Settlement in real-time: In the financial industry, blockchain can allowing the quicker settlement of trades. It does not take a lengthy process for verification, settlement, and clearance because a single version of agreed-upon data is available between all stack holders.
Cost-saving: Blockchain allows peer-to-peer transactions to be completed without the need for a third party such as a bank which reduced overhead costs for exchanging assets.
Security and Resilience: Blockchain uses very advanced cryptography to make sure that the information which is going to lock inside the blockchain is secure against hacking attacks and fraud. 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.
Immutability: A blockchain register transactions in chronological order, which mean every transaction happens after the previous one. The chronological order certifies the un-alterability of all operations in the blockchain. It means when a new block is added to the chain of ledgers, it cannot be removed or modified.
User Pseudonymity: It is a state where the user has a consistent identifier which is not the real name of the user. The real identities are only available to administrators. It allows users to communicate with others in a generally anonymous way. It helps to maintain user privacy and enables free transactions without any security worries. In the blockchain, your pseudonym is the address to which you receive Bitcoin. Every transaction which involves that address is stored permanently in the blockchain. If your address is linked to your identity, every transaction will be linked to you. It is always good to every time use a new address for each transaction to avoid the transactions being linked to a common owner.
Different types of Blockchains? Blockchains are of three types:
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Public
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Private
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Consortium or Federated
There are mainly three types of Blockchains introduced to the world.
- Public Blockchain
A Public blockchain is a kind of blockchain which is "for the people, by the people, and of the people." There is no in-charge it means anyone can read, write, and audit the blockchain. It is an open-source, distributed, and decentralizes public ledger so anyone can review anything on a public blockchain. They are considered to be Permissionless blockchain.
- Private Blockchain
A Private blockchain is a private property of an individual or an organization. It is controlled by a single organization that determines who can read it, submit the transaction to it, and who can participate in the consensus process. They are considered to be permissioned blockchain.
- Consortium Blockchain or Federated Blockchain
In this blockchain, the consensus process is controlled by a pre-selected group, i.e., group of companies or representative individuals. These pre-selected group is coming together and making decisions for the best benefit of the whole network. Such groups are also called consortiums or a federation that's why the name consortium or federated blockchain.
What is Blockchain? A Blockchain is a constantly growing ledger(file) 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 like bank or government.
Blockchain is the backbone of the most famous cryptocurrency named Bitcoin. It is a peer to peer electronic cash system and a decentralized network which allows users to make transactions directly without the involvement of third-party to manage the exchange of funds.
Where is a blockchain stored?
The blockchain can be either stored as a flat file or as a database.
Principle on which blockchain technology is based on? It enables the information to be distributed among the users without being copied.
I am Karthikeyan Veeran, I help global firms digitally transform using Blockchain, Intelligent Automation, Data analytics, Artificial Intelligence, setting up Centre of Excellence and application of Project management Strategy. This improves their operational efficiency, reduces their costs and improves their profitability | So, you can Ask me how | Other ways to help understanding | In all my episodes, I impart digital transformation technologies in a simplified & in a plain English. And I’m sure you will definitely gain knowledge from my podcast.
Well, I welcome you to my Podcast that’s 1 minute blockchain .
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Karthikeyan Veeran
Welcome to my Podcast on Automation Landscape !
I'm passionate about Automation and I speak all about it in a simplified way to make anyone understand it from a non-background to COE level.
All the episodes are having a blend of my rich experiences and knowledge in this space. You can reach me in my email id for any important things: mydearkarthikeyan@gmail.com
All my episodes are recorded in High Definition and processed in Dolby for the better-quality listening over the phone or in the large speakers. My Podcast is available in many distributions like, Spotify | Google Podcast | Apple Podcast Connect
Do follow my Podcast and stay updated in the Automation Space.
Happy Listening, Happy Automation,
Karthikeyan Veeran