Blockchain Ecosystem

Blockchain ecosystem is a network of participants that share nodes for common business purpose and process. Each block of the blockchain contains about 1 MB of data. This block stores the information chronologically until its 1 MB data capacity is occupied, and then the second block repeats the same process. All these blocks join in a sequence, and to do this, each block gets a unique hash that exactly matches the string of data in that block. If anything inside a block changes, even to a little extent, the block gets a new hash.In a blockchain, this hash is created by a cryptographic hash function. A cryptographic hash function is a complex algorithm that takes any string of input and turns it into a 64‐digit string of output. A hash is not always qualified. A block on the blockchain will only be accepted if its hash starts with at least ten consecutive zeros. A small, specific piece of data is added to each block called a “nonce.” The process of repeatedly altering and hashing a block's data to find a suitable hash is called “mining,” and this is what miners do. Miners spend a lot of electricity in the form of computational power by constantly changing the block structure (nonce) and hashing it until a qualified signature (output) is found. The more computational power they have, the faster they can hash different block compositions to find a qualified hash.Blockchain is typically classified into public, private and consortium blockchains. A public blockchain is a permissionless blockchain in which any user, whoever wishes to transact with the network, can participate and write on the blockchain. Private blockchains only allow nodes coming from a specific organization to participate in the consensus process. These are also called permissioned blockchains. A consortium blockchain is a semi‐private system in which a group of like‐minded companies leverage cross‐company solutions to improve workflow, accountability, and transparency.All participants in the blockchain network reach a consensus regarding the current state of the distributed ledger. In order to add a new block to the chain, a node has to perform a computation task, known as “Proof of Work.” Several consensus algorithms viz. PoS, PBFT, DPoS, Peercoin, Ripple, Tendermint, etc. have been discussed in detail.