AKTU MCA I FCET NOTES UNIT IV
Unit IV
Block chain: Introduction, overview, features, limitations and application areas ,fundamentals of Block Chain.
Crypto currencies: Introduction , Applications and use cases,
A hash function is a mathematical function that converts a numerical input value into another compressed numerical value. The input to the hash function is of arbitrary length but output is always of fixed length.
1 Fixed Length Output
2 Unique pair of input text and output digest
3 Hashing is a unidirectional process.
What is Blockchain?
A blockchain is a decentralized, distributed, and oftentimes public, digital ledger consisting of records called blocks that are used to record transactions across many computers so that any involved block cannot be altered retroactively, without the alteration of all subsequent blocks. This allows the participants to verify and audit transactions independently and relatively inexpensively A blockchain database is managed autonomously using a peer-to-peer network and a distributed timestamping server. They are authenticated by mass collaboration powered by collective self-interests
Blockchain can be defined as a chain of blocks that contains information. The technique is intended to timestamp digital documents so that it's not possible to backdate them or temper them. The purpose of blockchain is to solve the double records problem without the need of a central server.
The blockchain is used for the secure transfer of items like money, property, contracts, etc. without requiring a third-party intermediary like bank or government. Once a data is recorded inside a blockchain, it is very difficult to change it.
The blockchain is a software protocol (like SMTP is for email). However, Blockchains could not be run without the Internet. It is also called meta-technology as it affects other technologies. It is comprised of several pieces: a database, software application, some connected computers, etc.
Sometimes the term used for Bitcoin Blockchain or The Ethereum Blockchain and sometimes it's other virtual currencies or digital tokens. However, most of them are talking about the distributed ledgers.
Blockchain Architecture
Now in this Blockchain Technology tutorial, let's study the Blockchain architecture by understanding its various components:
What is a Block?
A Blockchain is a chain of blocks which contain information. The data which is stored inside a block depends on the type of blockchain.
For Example, A Bitcoin Block contains information about the Sender, Receiver, number of bitcoins to be transferred.
Bitcoin Block
The first block in the chain is called the Genesis block. Each new block in the chain is linked to the previous block.
Understanding SHA256 - Hash
A block also has a hash. A can be understood as a fingerprint which is unique to each block. It identifies a block and all of its contents, and it's always unique, just like a fingerprint. So once a block is created, any change inside the block will cause the hash to change.
Therefore, the hash is very useful when you want to detect changes to intersections. If the fingerprint of a block changes, it does not remain the same block.
Each Block has
- Data
- Hash
- Hash of the previous block
How Blockchain Transaction Works?
Step 1) Some person requests a transaction. The transaction could be involved cryptocurrency, contracts, records or other information.
Step 2) The requested transaction is broadcasted to a P2P network with the help of nodes.
Step 3) The network of nodes validates the transaction and the user's status with the help of known algorithms.
Step 4) Once the transaction is complete the new block is then added to the existing blockchain. In such a way that is permanent and unalterable.
Why do we need Blockchain?
Here, are some reasons why Blockchain technology has become so popular.
Time reduction: In the financial industry, blockchain can play a vital role by allowing the quicker settlement of trades as it does not need a lengthy process of verification, settlement, and clearance because a single version of agreed-upon data of the share ledger is available between all stack holders.
Reliability: Blockchain certifies and verifies the identities of the interested parties. This removes double records, reducing rates and accelerates transactions.
Unchangeable transactions: By registering transactions in chronological order, Blockchain certifies the unalterability, of all operations which means when any new block has been added to the chain of ledgers, it cannot be removed or modified.
Fraud prevention: The concepts of shared information and consensus prevent possible losses due to fraud or embezzlement. In logistics-based industries, blockchain as a monitoring mechanism act to reduce costs.
Security: Attacking a traditional database is the bringing down of a specific target. With the help of Distributed Ledger Technology, each party holds a copy of the original chain, so the system remains operative, even the large number of other nodes fall.
Transparency: Changes to public blockchains are publicly viewable to everyone. This offers greater transparency, and all transactions are immutable.
Collaboration – Allows parties to transact directly with each other without the need for mediating third parties.
Decentralized: There are standards rules on how every node exchanges the blockchain information. This method ensures that all transactions are validated, and all valid transactions are added one by one.
What Is a Cryptocurrency?
A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.
KEY TAKEAWAYS
- A cryptocurrency is a new form of digital asset based on a network that is distributed across a large number of computers. This decentralized structure allows them to exist outside the control of governments and central authorities.
- The word “cryptocurrency” is derived from the encryption techniques which are used to secure the network.
- Blockchains, which are organizational methods for ensuring the integrity of transactional data, is an essential component of many cryptocurrencies.
- Many experts believe that blockchain and related technology will disrupt many industries, including finance and law.
- Cryptocurrencies face criticism for a number of reasons, including their use for illegal activities, exchange rate volatility, and vulnerabilities of the infrastructure underlying them. However, they also have been praised for their portability, divisibility, inflation resistance, and transparency.
Understanding Cryptocurrencies
Cryptocurrencies are systems that allow for the secure payments online which are denominated in terms of virtual "tokens," which are represented by ledger entries internal to the system. "Crypto" refers to the various encryption algorithms and cryptographic techniques that safeguard these entries, such as elliptical curve encryption, public-private key pairs, and hashing functions.
Types of Cryptocurrency
The first blockchain-based cryptocurrency was Bitcoin, which still remains the most popular and most valuable. Today, there are thousands of alternate cryptocurrencies with various functions and specifications. Some of these are clones or forks of Bitcoin, while others are new currencies that were built from scratch.
Bitcoin was launched in 2009 by an individual or group known by the pseudonym "Satoshi Nakamoto."1 As of Nov. 2019, there were over 18 million bitcoins in circulation with a total market value of around $146 billion.2
Some of the competing cryptocurrencies spawned by Bitcoin’s success, known as "altcoins," include Litecoin, Peercoin, and Namecoin, as well as Ethereum, Cardano, and EOS. Today, the aggregate value of all the cryptocurrencies in existence is around $214 billion—Bitcoin currently represents more than 68% of the total value.
Advantages and Disadvantages of Cryptocurrency
Advantages
Cryptocurrencies hold the promise of making it easier to transfer funds directly between two parties, without the need for a trusted third party like a bank or credit card company. These transfers are instead secured by the use of public keys and private keys and different forms of incentive systems, like Proof of Work or Proof of Stake.
In modern cryptocurrency systems, a user's "wallet," or account address, has a public key, while the private key is known only to the owner and is used to sign transactions. Fund transfers are completed with minimal processing fees, allowing users to avoid the steep fees charged by banks and financial institutions for wire transfers.
Disadvantages
The semi-anonymous nature of cryptocurrency transactions makes them well-suited for a host of illegal activities, such as money laundering and tax evasion. However, cryptocurrency advocates often highly value their anonymity, citing benefits of privacy like protection for whistleblowers or activists living under repressive governments. Some cryptocurrencies are more private than others.
Bitcoin, for instance, is a relatively poor choice for conducting illegal business online, since the forensic analysis of the Bitcoin blockchain has helped authorities to arrest and prosecute criminals. More privacy-oriented coins do exist, however, such as Dash, Monero, or ZCash, which are far more difficult to trace.
other useful link
BlockChain Explain
Features of block chain
Blockchain is a distributed digital ledger technology that allows secure, transparent, and tamper-proof recording of transactions and data. Some of the key features of blockchain include:
Decentralization: Blockchain is a decentralized system, meaning there is no central authority controlling it. It is distributed across a network of nodes, and each node has a copy of the ledger.
Immutability: Once a transaction is recorded on the blockchain, it cannot be altered or deleted. This makes blockchain a highly secure and tamper-proof technology.
Transparency: All the transactions on the blockchain are transparent and visible to all the nodes in the network. This allows for greater accountability and reduces the risk of fraud.
Security: Blockchain uses cryptographic algorithms to ensure the security of data and transactions. This makes it highly resistant to hacking and other malicious activities.
Smart Contracts: Blockchain supports the creation and execution of smart contracts, which are self-executing contracts with the terms of the agreement directly written into lines of code.
Speed: Blockchain transactions can be processed quickly, especially compared to traditional banking and financial systems.
Cost-effectiveness: Blockchain eliminates the need for intermediaries such as banks, lawyers, and other third-party service providers, which can reduce costs and increase efficiency.
Privacy: While blockchain transactions are transparent, the identity of the parties involved can be kept private through the use of cryptographic techniques.
Limitations of Block chain
Blockchain is a powerful technology that has revolutionized various industries, but it also has some limitations. Some of the limitations of blockchain are:
Scalability: Blockchain technology can be slow and inefficient, especially when it comes to processing a large number of transactions. As the size of the blockchain grows, it can become challenging to maintain a decentralized network of nodes, which can cause delays in transaction processing.
Energy Consumption: One of the significant concerns with blockchain is the high energy consumption required for mining and validating transactions. The proof-of-work consensus mechanism used in many blockchain networks requires significant computational power, which consumes a considerable amount of energy.
Lack of Governance: Blockchain is a decentralized technology that operates without a centralized authority. While this is one of its strengths, it can also be a weakness as it can be challenging to make changes or upgrades to the network without consensus from all nodes. This can result in slow decision-making and can limit the ability to adapt to changing circumstances.
Security: While blockchain technology is considered to be highly secure due to its distributed and immutable nature, it is not entirely immune to security breaches. In some cases, hackers have been able to exploit vulnerabilities in the system to steal cryptocurrency or disrupt the network.
Adoption: Despite the potential benefits of blockchain, adoption remains a significant challenge. The technology is still in its early stages, and many businesses and individuals are not yet familiar with its capabilities or benefits. Additionally, there are regulatory challenges that can make it difficult to implement blockchain-based solutions in certain industries.
Application areas and fundamentals of block chain
Blockchain is a distributed ledger technology that allows for secure and transparent transactions without the need for intermediaries. The fundamental components of a blockchain include blocks, which contain data and a unique cryptographic hash, and a consensus mechanism that ensures that all participants in the network agree on the state of the ledger.
Here are some application areas of blockchain technology:
Cryptocurrencies: Blockchain is the underlying technology behind cryptocurrencies like Bitcoin, Ethereum, and others. It allows for secure and transparent transactions without the need for intermediaries like banks or financial institutions.
Supply chain management: Blockchain can be used to track and trace products as they move through the supply chain. This can help to ensure the authenticity and provenance of products, and prevent fraud and counterfeiting.
Identity verification: Blockchain can be used to create secure and decentralized identity verification systems that allow individuals to prove their identity without the need for a central authority.
Voting systems: Blockchain can be used to create secure and transparent voting systems that prevent tampering and ensure the integrity of elections.
Smart contracts: Blockchain can be used to create self-executing smart contracts that automatically execute when certain conditions are met. This can be used in a variety of industries, including finance, insurance, and real estate.
The fundamental principles of block chain technology include:
Decentralization: Block chain is a decentralized technology, meaning that it does not rely on a central authority to manage the ledger. Instead, the ledger is distributed across a network of computers, and all participants have a copy of the ledger.
Security: Block chain is a secure technology, thanks to the use of cryptographic algorithms to secure the ledger. Each block in the chain is linked to the previous block, making it virtually impossible to tamper with the data.
Transparency: Blockchain is a transparent technology, meaning that all participants in the network can see the transactions on the ledger. This helps to prevent fraud and increases accountability.
Immutability: Once a block is added to the blockchain, it cannot be altered or deleted. This makes the blockchain a permanent and tamper-proof record of transactions.
Crypto Use-Cases.
Application and use-cases of cryptocurrency
Cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Some of the most popular cryptocurrencies include Bitcoin, Ethereum, Litecoin, and Ripple.
There are many potential applications and use-cases for cryptocurrency, including:
Online Payments: Cryptocurrencies can be used to make online purchases and payments, as they provide a secure and efficient way to transfer funds without the need for intermediaries like banks or credit card companies.
International Money Transfers: Cryptocurrencies can be used to send money across borders without the need for expensive wire transfers or currency conversions. This is especially useful for people who live in countries with strict capital controls or high remittance fees.
Investment: Cryptocurrencies can be used as a speculative investment, as their value can fluctuate significantly over time. Investors can buy and hold cryptocurrencies in the hopes of selling them for a profit later on.
Decentralized Finance: Cryptocurrencies can be used as part of a decentralized finance (DeFi) ecosystem, which allows users to access financial services without the need for traditional banks or financial institutions.
Smart Contracts: Some cryptocurrencies, such as Ethereum, allow for the creation of smart contracts, which are self-executing contracts with the terms of the agreement directly written into lines of code. This can be used for a variety of applications, including digital identity verification, voting systems, and supply chain management.
Gaming: Cryptocurrencies can be used as in-game currencies in online games, allowing for seamless and secure transactions between players.
Overall, cryptocurrency has the potential to revolutionize the way we think about money, finance, and online transactions. As the technology continues to evolve, it is likely that we will see many more innovative use-cases for cryptocurrencies in the years to come.
Cloud Computing
What is cloud computing, in simple terms?
Cloud computing is the delivery of on-demand computing services -- from applications to storage and processing power -- typically over the internet and on a pay-as-you-go basis.
How does cloud computing work?
Rather than owning their own computing infrastructure or data centers, companies can rent access to anything from applications to storage from a cloud service provider.
One benefit of using cloud computing services is that firms can avoid the upfront cost and complexity of owning and maintaining their own IT infrastructure, and instead simply pay for what they use, when they use it.
In turn, providers of cloud computing services can benefit from significant economies of scale by delivering the same services to a wide range of customers.
What cloud computing services are available?
Cloud computing services cover a vast range of options now, from the basics of storage, networking, and processing power through to natural language processing and artificial intelligence as well as standard office applications. Pretty much any service that doesn't require you to be physically close to the computer hardware that you are using can now be delivered via the cloud.
Infrastructure-as-a-Service
Cloud computing can be broken down into three cloud computing models. Infrastructure-as-a-Service (IaaS) refers to the fundamental building blocks of computing that can be rented: physical or virtual servers, storage and networking. This is attractive to companies that want to build applications from the very ground up and want to control nearly all the elements themselves, but it does require firms to have the technical skills to be able to orchestrate services at that level. Research by Oracle found that two thirds of IaaS users said using online infrastructure makes it easier to innovate, had cut their time to deploy new applications and services and had significantly cut on-going maintenance costs. However, half said IaaS isn't secure enough for most critical data.
popular example Rackspace. Amazon Web Services (AWS) Cisco Metacloud. Microsoft Azure
Platform-as-a-Service
Platform-as-a-Service (PaaS) is the next layer up -- as well as the underlying storage, networking, and virtual servers this will also include the tools and software that developers need to build applications on top of: that could include middleware, database management, operating systems, and development tools.
· Popular examples of PaaS include Quickbase, AWS Elastic Beanstalk, and Boomi.
Insight platforms as a service: What they are and why they matter
Software-as-a-Service
Microsoft 365 (formerly Office 365) for business: Everything you need to know
Microsoft's multitude of Business and Enterprise editions -- licensed as monthly or annual subscriptions -- offer more advanced feature sets than the Home and Personal editions, with collaborative applications and management tools designed for meeting enterprise security and compliance challenges.
Software-as-a-Service (SaaS) is the delivery of applications-as-a-service, probably the version of cloud computing that most people are used to on a day-to-day basis. The underlying hardware and operating system is irrelevant to the end user, who will access the service via a web browser or app; it is often bought on a per-seat or per-user basis.
According to researchers IDC SaaS is -- and will remain -- the dominant cloud computing model in the medium term, accounting for two-thirds of all public cloud spending in 2017, which will only drop slightly to just under 60% in 2021. SaaS spending is made up of applications and system infrastructure software, and IDC said that spending will be dominated by applications purchases, which will make up more than half of all public cloud spending through 2019. Customer relationship management (CRM) applications and enterprise resource management (ERM) applications will account for more than 60% of all cloud applications spending through to 2021. The variety of applications delivered via SaaS is huge, from CRM such as Salesforce through to Microsoft's Office 365.
SaaS is easily the most popular form of cloud computing. Gmail, Slack, and Microsoft Office 365
Nature and benefits of cloud computing
Cloud computing is the delivery of on-demand computing resources over the internet, such as servers, storage, applications, and services. Instead of businesses and individuals having to buy, maintain, and upgrade their own hardware and software, they can access these resources through a cloud provider on a pay-as-you-go basis. The benefits of cloud computing are numerous and include:
Cost Savings: Cloud computing eliminates the need for businesses and individuals to invest in expensive hardware and software, reducing capital expenditure.
Scalability: Cloud computing allows businesses to scale up or down their computing resources as needed, without the need for additional hardware and software.
Reliability: Cloud providers typically offer a high level of uptime and availability, ensuring that resources are always accessible.
Flexibility: Cloud computing allows businesses to access resources from anywhere with an internet connection, making it easy to work remotely and collaborate with others.
Security: Cloud providers often have extensive security measures in place to protect against data breaches and cyber threats.
Disaster Recovery: Cloud computing provides businesses with a reliable backup and recovery solution in case of a disaster or outage.
Overall, cloud computing provides businesses and individuals with a cost-effective, scalable, flexible, and reliable way to access computing resources, without the need for costly hardware and software investments.
Cloud Computing Platforms.
AWS (Amazon Web Services) is a cloud computing platform offered by Amazon. It offers a wide range of services including computing, storage, databases, analytics, machine learning, networking, security, and more. Some popular AWS services include Amazon EC2, Amazon S3, Amazon RDS, and Amazon Lambda.
Google Cloud Platform is a suite of cloud computing services offered by Google. It offers a range of services including compute, storage, databases, analytics, machine learning, networking, and more. Popular Google Cloud Platform services include Google Compute Engine, Google Cloud Storage, and Google BigQuery.
IBM Cloud is a cloud computing platform offered by IBM. It offers a range of services including compute, storage, databases, analytics, machine learning, networking, and more. Popular IBM Cloud services include IBM Watson Studio, IBM Cloud Object Storage, and IBM Cloud Kubernetes Service.
All of these cloud computing platforms offer similar services, but each has its own unique features and strengths. Customers should evaluate the specific needs of their organization to determine which cloud computing platform is best suited for their needs.
posted by Raj @ February 20, 2024
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