In Part 1, we’ve discussed the basic understanding and the reason behind blockchain. We ended up with the elements and components of blockchain like:
- Ditriputed Ledger
- Smart Contract
- Nodes
- Blocks
- Hash
- Nonce
We will discuss every element separately.
1- Distriputed ledger
Distriputed Ledger Technology, or (DLT), is a technology of infrastructures and protocols that allows simultaneous access, validation, and record updating in an immutable manner across a network that’s spread across multiple entities or locations.
DLT is widely known as blockchain technology. It provided the major idea behind “Decentralization”, which is the key feature of blockchain network.
DLT eliminates the need of “centralization”, or the need of central entity to record and verify any transaction. DLT stores every transaction in a form of “key”, or in our case: “HASH” – which we will talk about later – and distributed across all members of the chain.
DLT as a function is not new. Usually you already do something like that on a daily basis. This is if you already have distributed locations and replicate your data across them, specially if all those locations are connected to the central system that keeps updating all other locations periodically.
DLT has a great potential in many applications, specially for governments. Like tax collection, passport/ID issuance, and land registry. It can be also used in voting systems.
2- Smart Contract
Smart contracts are digital contracts, which are stored in the blocchain. Smart contract issues when certain predetermined condition or terms are met.
Just like regular contract, but they are programmed and automatically generating when certain condition happen. They can also automate a workflow, triggering the next action when conditions are met.
3- Nodes
We can consider blockchain nodes as stakeholders or trusted members. They come with their devices – or servers – that are authorized to keep track of the distributed ledger and serve as communication hubs for various network tasks.
We can consider a node as a server – physical or virtual – that is located at every member in the blockchain network. This server stores the transaction as stated in the distributed ledger. But this is not the only function of the node, nodes also confirm the legality of each subsequent batch of network transactions, known as blocks. In addition, allocating a unique identifier to each node in the network helps to distinguish a node from other nodes in the network easily.
There are
two types – Full Node and Partial Node.
- Full Node
It maintains a full copy of all the transactions. It has the capacity to validate, accept and reject the transactions. - Partial Node
It is also called a Lightweight Node because it doesn’t maintain the whole copy of the blockchain ledger. It maintains only the hash value of the transaction. The whole transaction is accessed using this hash value only. These nodes have low storage and low computational power.
Too much information in one blog? Let’s continue with the rest of the elements in part 3.
Former Nuclear Engineer | University Lecturer | Technology Advisor | Digital Transformation evangelist | FinTech | Blockchain | Podcaster | vExpert ⭐️⭐️⭐️⭐️ | VeeamVanguard ⭐️⭐️ | Nutanix SME | MBA | AWS ABW Grant’23
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