Living in the 21st century, we are all well versed with terms like bitcoins and cryptocurrency. If you are working in the banking or investing sector. Blockchain is your newest and friendliest technology launched in the market.
A blockchain network is basically a technical network that is providing ledger and smart contract (chaincode) services to the applications. Primarily, these smart contracts are used to generate transactions which are subsequently distributed among every peer node in the network where they are unalterably recorded on their copy of the ledger. The users of applications must be end users using client applications.
Generally, most organizations come together as a consortium to establish the network and their permissions are determined by a set of policies that they agreed to while the original consortium was established.
Blockchain underpins thousands of applications and networks that have some utility and are able to provide value in various industries like fashion, finance and gaming.
With the help of the decentralized nature of blockchain networks industries like cryptocurrency and decentralized finance come into action.
Blockchain networks are driven by aligned system incentives.a blockchain with proper functioning requires a community of users, node operators, developers and miners who work in a mutually beneficial network.
The roots of the blockchain network can be traced back to cryptographers from the early 1980’s. Although the modern blockchain network began with Bitcoin, digital payments began in January 2009 by Santoshi Nakamoto.
Bitcoin is the largest cryptocurrency with the help of market capitalization and well known usage of blockchain technology.
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Types of Blockchain Networks
Blockchain network broadly are classified into 4 types and they are:
Types of Blockchain Networks
Public Blockchain: Public Blockchain network is accessible to the public without any limitations of validation and participants. As it does not have any central authority an individual is unable to manipulate the network tha stores unchangeable data.
They are sourced by crypto economics which includes economic incentives and cryptographic verification using mechanisms such as Bitcoin and Ethereum. They are considered to be ‘fully decentralized.
- Used by a number of entities as no third party verification is required.
- Public Blockchain provides protection to applications from developers, as there are certain things that have no access to the developers as well.
Private Blockchain: It is a restrictive network, only authorised people have access to it. The authorisers have the power to choose entities and blockchain developers and they are granted permission during the development phase.
After the launch of the network, the whole sole responsibility lies with the administrator to allow new access or revoke existing users. Private companies use it in order to store sensitive data.
- The company running can easily change the rules of the blockchain,modify banners, and revert transactions.
- Validators are known beforehand only thus the risk of minor collusion does not apply
- Provide greater level of privacy as read permissions are restricted.
Consortium Blockchain: It is a process where the consensus process is controlled by a pre- selected set of nodes.a semi- decentralised network where multiple entities operate.
Under this network several entities have a network to view and share information. Banks, large organisations, and government institutes use consortium blockchain to carry out daily transactions.
- Reduces transaction cost and data redundancies
- Replaces legacy systems, simplifying document handling and getting rid of semi manual compliance mechanisms.
Hybrid Blockchain: It is a network that possesses properties of both private and public blockchain networks. It provides versatile nodes wherein the individual can set preferences to share or discrete data.
The architecture can be differentiated by the fact that they are not open to everyone but still offers blockchain facilities like integrity, privacy, transparency and security.
- Hybrid blockchain is flexible in nature, in a way that one can alter the level of transparency, decentralization and security requirements
- It is a budget friendly network as it reduces the cost of the transaction process.
Uses of Blockchain Network
Now that we have understood about the basics of blockchain, there are several applications of this network as listed below:
Blockchain technology is like a light in the dark in the healthcare section of the society. It can be used to fill the gaps in the existing systems that further leads to thefts, sharing of unwanted information and corruption.
Some of the major impacts on the Healthcare sector are:
Safer Electronic Records: According to HIPAA, there were 642 healthcare data breaches of 500 or more records in 2020. Johns Hopkins University reported that the 3rd leading cause of death in the US was medical errors.
Blockchain Technology serves the best solution for such problems as it enables safer and more accurate information and healthcare records. Blockchain can be linked to existing electronic health records and act as an overarching single-view of the patient’s file.
Transparency in Supply Chain: With the increase in awareness and need the healthcare sector also needs to maintain authenticity of medications. Blockchain technology known for it tracking changes enables it to meet the standardization and removal of unwanted products.
Authentication for Staff Credentials: Along with authenticating medications, patient records, manufactures. Blockchain Technology also helps in verifying staff identities This enables both hospital and patients to maintain privacy of records and data.
Remote Monitoring IoT Security: With the advancement in technology there are various devices like smartwatches, ECG sensors and pulse oximeters etc available at an affordable rate. This allows greater insight into a patient’s health profile and provides more information for the doctors to act upon.
Whereas the security of this data is imperative too. The more the number of devices are involved the more you are prone to vulnerabilities. However Blockchain Technology specializes in maintaining confidentiality.
Guardtime, a company that specializes in cybersecurity uses cryptography and blockchain to assign every data with a stamp. It allows tracking of the origin of the assigned data asset.
Real estate is a huge industry involving a lot of tedious procedures like ownership processing, loans, registrations etc. a blockchain network provides a transparent and authentic platform by providing transparency, removing intermediaries,adding vertificability and reducing costs.
It provides a medium that is feasible for both buyer and seller. It also removes any middle man termed as intermediaries or brokers resulting in saving brokerage fees as well. The properties can also be registered digitally adding verifiability to the property including its owner.
So if you are in the process of buying a new property through a platform or marketplace powered by a blockchain platform then select the property and buy it without much thought.
Banking and Finance
Decentralized Finance(DeFi) is the core of the banking and financing industry. It is an open source of movement to change how financial applications function on decentralised architecture.
At the core level there is no centralization present which rules out the main problem of fund misuse. Ethereum is the key blockchain platform used in the decentralized finance system.
Blockchain networks can also be used to establish an end to end user friendly banking system by redefining the baking process and making it more technologically systemised.
Transfer of assets or value is another crucial task wherein blockchain can be used to simplify the process without the need for a centralized entity.
The last industry where blockchain can be used is the media industry. It is one of those sectors which are constantly developing based on the social- economical region. With free media comes tons of problems like IP infringement, centralized content, and monetization issues.
In the media, a decentralised method based on blockchain technology is groundbreaking since it solves the majority of the difficulties. The content producer can publish their work on a decentralised platform with no restrictions on distribution.
Furthermore, there is no charge for sharing their work on the internet. Finally, each piece of content includes codes that can be exploited to detect IP violation.
As a result, if someone commits an IP infringement, the system will be able to recognise it and take appropriate action based on the smart contract definitions.
Spotify is attempting to improve the user-creator interaction by utilising blockchain technology.
(Suggested Read – Centralized and Decentralized Cryptocurrency Exchanges)
Blockchain network is a decentralized ledger technology that records any digital asset or transactions without involving any third party in the procedure. The key aspect on which a business functions is information, the faster and more accurate the information is the better it is.
Blockchain serves as the best medium in doing so; it’s quicker, authentic and is shared through an immutable ledger that can be accessed only by permissioned network members. This technology enables cryptocurrencies (digital currencies secured by cryptography) like Bitcoin to work easily.
Each blockchain network is unique and different in it’s on ways. The type of network to be used completely depends on the individual and according to the needs of the organisation.
Find more: Blockchain network – Krypto-NFTs