First of all I would like to apologize for not writing for 2 weeks. As promised earlier this week I will focus on important terminologies related to the blockchains concept and try to clearly distinguish the roles of the actors who utilize the blockchains.
Components in a blockchain
Credits : MLSDEV
Node : Simply a member in the blockchain network. More precisely a node is the user or computer within the blockchain architecture . The important fact to note here is that each node has an independent copy of the whole blockchain ledger.
Ledger : As we have seen about Ledgers already lemme precisely say that they are immutable and distributed historical record of the transaction made in the blockchain.
Peer Network : As we barely knew that all the transactions in a blockchain happen only between two individual parties ( persons ideally) we could easily understand that these peer networks are nothing but the network interface that helps in storing,updating and maintaining the ledger.
Wallet : Please this is not your amazon wallet where you can easily transfer money to your friends. It is slightly different from our regular wallets that it stores our credentials instead of money. Authenticity and authority are the most important concerns with the blockchain network and hence for those purposes asymmetric cryptography is utilized in blockchains.By the principles of asymmetric cryptography, a public key which can be utilized by anyone for viewing puposes and private key only by the owner for authorized access to the transactional account. So simply this wallet caches these kind of user credentials.
Events : Blockchain events are notifications about the updates and actions that happen on the blockchain to the network.
Consensus : Consensus precisely is a general agreement among the group of users utilizing a common platform. Generally in any centralized data management system the CRUD operations are handled by a single central authority who is responsible for all those actions. Since blockchains are distributed and decentralized there is no such single authority who performs those manipulations. Each and every user does their own transactions and there should be any general agreement to preserve the harmony in the system. This mechanism is generally called as the consensus mechanism.
Transactions : Before we learn about mining in blockchains lets inchoate to understand what are blockchain transactions. Any atomic event that happens with due concern to the underlying protocol in a blockchain is stored as record (simply like a record that we store in our databases). Since they are the fundamental units they are also called as blocks. These blocks are chained in such a way that all the transactions happened are stored in a chronological order and some say that this is why the name blockchain came into existence.
Miners: In public blockchains such as Bitcoin and ethereum that operate as decentralized,self regulated systems can scale globally without any central authority. But in these type of blockchains there are actually people who validate and verify each and every transactions. These people are called as cryptographic miners or miners simply and this process is called as mining. On an average each block is mined every 10 minutes once. This validation happens through the miner trying to solve a very hard cryptographic hash which is the hash of the block that is to be validated. The miner has to spend time and huge amount of computing resources to find the hash. This solved hash of the block is called as the proof of work (PoW). These miners also recieve rewards as they validate these transactions(blocks). There are two common types of rewards that a miner can get. They are new blockchain units or transaction fees(in ethereum gas or ethers). These ethers are required to carry out any new transaction in the concerned blockchain.
Having learnt some essential and fundamental components of the blockchain we dive into a discussion of what are the roles assumed by the people utilizing the blockchains.
Actors in Blockchain
Credits : medium.com
There are five different actors commonly associated with blockchains. They are
- End user
Architect : For a blockchain solution to be functional it first needs to exist. A blockchain architect is a person who actually designs the blockchain solution with all the underlying protocols that form the core of the blockchain network. It can be an individual or a group of people who design the blockchain. But they should have a fundamental understanding about the business analysis and Technical Project Management. They should coordinate with the blockchain engineers and the techincal leads in implementing the design. A good blockchain architect is one who designs the blockchain in such a way that it applies to all the use cases with respect to the business problem that is being considered.
Operator : Once the blockchain solution is desinged and built, an operator can join to create the peer network. The role of the operator is to set up and maintain peers within the network.
Regulator : Many businesses operate under regulations regarding how their data should be stored and proceesed. The regulators are the people who have greater visibility into the historical ledger due to their role within the organization.
End User : The End User is the consumer of the services that are built around the blockchain as core. This invoolves using software that uses the blockchain as a backend storage solution. End Users rarely interact with the blockchain.
Public and Private blockchains
Credits : 101blockchains
Based on the availability to the end users blockchains can be categorized into public and private blockchains. A public blockchain is really a permissionless blockchain. Anyone can participate in a public blockchain meaning that they can read and write to a public blockchain. These public blockchains are very secured since data can't be changed once validated on the blockchain by the miner. Whereas private blockchains are permissioned blockchains. They possess certain restrictions to the operability of the blockchain meaning who can read or write to the blockchain is predetermined.
Bitcoin, Ethereum, Litecoin are examples of public blockchains.
When anonymity is an important concern public blockchains could be an evident solution since we see cryptocurrencies like Bitcoins are based on public permissionless blockchains. Also we dont categorize people in public blockchains since its also a concern to opt public blockchains as a solution.
Hyperledger , Hashgraph ,Ripple are examples of private blockchains.
When there is no anonymity required and we want to sort users into groups and identify them then permissioned or private blockchains could be the solution that we are looking forward to. Any authentication service such as Google OAuth, Facebook auth etc., can be plugged into these private blockchains for permitting the users. So as we look into industrial requirements right from Supply chain management to voting management systems we want to identify each and every individual separately. This is where private blockchains come into play. Private blockchains are faster than the public blockchains in transaction processing since we have very few nodes in private blockchains as compared to their public counterparts. In order to identify which blockchains ( private or public ) should be used for a scenario the following things should be of concern to the architect trying to implement the blockchain based solution.
- Governance : How does the oversight of the application occur ?
- Integration : What kind of blockchain provision can be integrated to the existing application in use ?
- Smart Contract Functionality : Is there any requirement for a smart contract ?
- Cryptocurrency Requirement : Is there a need for cryptocurrency based transaction ? Generally enterprises doesnt prefer this.
- Consensus Algorithm : What kind of consensus protocol is promised in the QoS terms ?
- Costing Model : What is the cost concern of the party trying to apply blockchain based solution ?
Next week we will try to focus more on cryptography and consensus in the blockchain. Subscribe to TechCacheScience for more interesting updates on this weekly series on blockchains.