74

Blockchain Technology

5.1  INTRODUCTION TO BLOCKCHAIN TECHNOLOGY

Blockchain is adistributed ledger technology (DLT) that uses the decentralization

method andstores the history of all digital assets​.whi​ch cannot be altered. With the

usage of cryptographic hashing, the blockchain ensures transparent and secure digi­

tal transactions. For example, consider the Google Docs concept, where the docu­

ment can be shared with anyone or to any group but cannot be altered without proper

permission from the owner (Benbunan-Fich et​.a​l, 2020). The document can be

shared withanyone, and those users can access it with limited access only. Hence, the

document is distributed rather than transferred or copied. This distribution is called

adecentralized chain, which is used in blockchain technology(Ameyaw et​.a​l, 2020).

In this model,access to the document can be given to many users at the same time,

and no one needs to wait for others to perform the process. But, all the modifications

that are made in the document by different users are recorded and transparent to all

users. Not exactly likeGoogle Docs, blockchain works in a more complex way, with

three critical ideas:

1. Distributed digital assets,which reduces the copying and transferring

process.

2. The decentralized access to assets,which allows real-time full access to the

asset.

3. Integrity preservation of all the documents through a transparent ledger,

thereby creatingtrust over the assets.

With these three categories, blockchain is considered a revolutionary as well as

promising technology that reduces risk by avoiding fraudulent activities over the

assets. It also ensures transparency of assets with a scalable architecture.

5.1.1  Components of Blockchain

As per the technological review by the Massachusetts Institute of Technology (MIT),

the point of people using blockchain technology is that they don’t need to trust any­

one and the valuable data can be shared in a secure way,i.e., tamperproof.

Blockchain includes six important components:

1. Node –The computer or the user that is present in the blockchain frame­

work. Each node has a separate ledger copy.

2. Transaction –This is the lowestcomponent of the records and other informa­

tion of theblockchain.

3. Block –This is the component or the data structure where the transac­

tion data of all the nodes that exist in the network is captured. When a

block is created,a 32-bit whole number called a nonce will be generated

randomly,thereby generating the header of the block.

4. Chain –This is the sequence of all the blocks in a specific order.

5. Miners –The precise nodes that are used toaccomplish the authentica­

tionof blocks before implementing the modification in the blockchain.They