Fundamentals of Blockchain Technology

Blockchain technology is famous for its building blocks When blockchain technology was introduced in 2007 by Satoshi Nakamoto, it had basic building blocks for its first use case as cryptocurrency, i.e.

  1. Decentralization: No control by Central entity.
  2. Distributed Ledger: Increase redundancy and decrease ambiguity of the data.
  3. Consensus Mechanism: Maximize the participation in decision-making.
  4. Immutability: No data manipulation and deletion.
  5. Privacy: Increase the privacy by enforcing the hashing and cryptography techniques.
  6. Transparent: Accessibility to all makes it transparent.

Smart Contracts were introduced later on by Ethereum to automate its operation and working.

Difference between Various Blockchain Protocols

The blockchain protocol is a set of rules and standards that define the structure and operations of the network on the principles of decentralization, immutability, and peer-to-peer communication.

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Fundamentals of Blockchain Technology

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Difference Between Various Types of Blockchain Protocols

Public Private Parameter Bitcoin Ethereum Hyperledger Fabric Corda Consensus Proof of Work (PoW) currently uses Proof of work but is transitioning to Proof of Stake (PoS) Practical Byzantine Fault Tolerance (PBFT) Practical Byzantine Fault Tolerance (PBFT) Security High security due to the extensive computational work required for mining PoW provides security, and PoS is designed to be more energy-efficient. As it is a Permissioned ; So emphasis on privacy. Permissioned and focuses on the privacy of transactions. Transparency Public and transparent ledger. Public and transparent Generally private but can be configured for transparency. Shared only among relevant parties; supports private transactions. Throughput/Scalability Limited transaction throughput (around 7 transactions per second) leading to scalability challenges. Ethereum 2.0 aims to improve scalability with features like shard chains and PoS. Suitable for enterprise use with modular architecture and support for private channels. Designed for high-throughput financial transactions and allows for scaling...

Conclusion

In this article we analyzed the characteristics of some prominent blockchain protocols that cover aspects such as consensus mechanisms, security, transparency, throughput & scalability. We covered why blockchain protocol seems to be important for the real world use case....