Blockchain design: Everything you need to know
Blockchain as a concept was developed in 1991 but found its application in 2009. Today it is onset to become one of the most sought technology for data security. Legacy data management systems are vulnerable to attacks- they are penetrable, modifiable, or worse- destroyable. No matter how strong a vault we build to secure our money, it’s only as good as its password — which nowadays can be guessed in seconds by any supercomputer.
To do away with this problem, Blockchain technology eliminated the need for a password- the data is out in the open for everyone to see and manipulate. However, the unauthorized modifications do not stick as the design of the Blockchain network enables it to correct itself automatically and restore to its original state.
In this article, I will discuss how Blockchain architecture has evolved between the years and became more secure. Blockchain is a broad concept so, I have broken its architecture, internal functions, and application into three parts. I recommend reading all the pieces of this series to not be left half-baked:
- Internal security functions of Blockchain.
- Blockchain applications: Bitcoin and CryptoArt explained. Coming soon
What is Blockchain technology?
Blockchain technology is a glorified record-keeping system. In 1991 at first, it had a feature to timestamp any changes to the recorded data. In 1992 it was imagined with hash algorithms as a more sophisticated way of timestamping data. In 2008 it was put to use with one new feature — decentralized network.
A decentralized network or simple to say “a network not under one roof” allows data to be stored globally on thousands of distributed servers — while letting anyone on the network see everyone else’s entries in near real-time.
This feature enabled the Blockchain network to store the same copy of data on multiple servers/computers distributed across the world. In the case of the hacking attack- the forced changes have to be done in at least 50% of the computers in the Blockchain network for them to stick, otherwise, the network will revert and restore to its original form.
Two forms of Blockchain network: Public and Private
Public blockchains are competitive. Hardware required in Blockchain is expensive. And only 1 peer gets rewarded (cryptocurrency) for adding a transaction to the data block successfully. Thus entry barrier is heavy capital and operational cost.
Blockchain Architecture: Data Blocks
A Blockchain is a growing list of records, called blocks or data blocks, that are linked using a digital address. Each block containing the address of the previous one.
Simply put, imagine a powerful computer with high speed and processing power. This computer runs only one application called Blockchain. Inside Blockchain, there are data blocks. Data blocks are like logical partitions inside a computer’s disk space. It is similar to logical partitions created in a computer’s hard disk to run multiple operating systems.
All data blocks are immutable and linearly arranged such that every data block points to its former data block by sharing a live copy of its address. Block address is dependent on its content; any modification in the content will change the Block’s address and make subsequent blocks invalid or orphan.
Blockchain Architecture: Network arrangement
Imagine the above computer is in a decentralized (not under one roof), peer-to-peer (P2P) network with other computers of similar computing strength. Decentralized network topologies protect peers from becoming a target of common calamity or physical hacks.
In a peer-to-peer type of network, all connected peers are equally privileged, equipotent participants in the application.
All the computers of this P2P network are connected purposefully via the same Blockchain application and they all have inherited the same data block map, storing the same information in the same order. When all put together what you have imagined is a ready-to-go Blockchain network.
Since all computers/peers in the Blockchain network are identical in every way, even if one of the peers is hacked and data stored is manipulated. The still secured peers reform the impacted peer to its original form by studying themselves.
Example of how does the Blockchain network secures data?
Hosting a Blockchain application requires expensive hardware. Internal functions of Blockchain are complex and need high-speed computers to deliver expected results. Some companies host independent Blockchain networks and lease space in them as a service.
Dapper Labs, a Blockchain network host, is trending these days for inventing NFT (non-fungible tokens) and using them to sell Cryptoart.
Case: IBM hosts one of the most secured private Blockchain networks. Bank ANZ wants to use IBM’s facility to record their transactions of high-value.
Context: transaction of value $10000 or above will be added to IBM’s Blockchain network only when requested by ANZ-approved officials. To serve the purpose ANZ will generate a digital private and public key pair.
Before writing the transaction details ( Name of sender, recipient, Amount) into the data block — ANZ will use its private key (a unique combination of any number of integers known only to ANZ) to encrypt a copy of the transaction.
The encrypted transaction is now called a signature. It is just a unique combination of integers. Depending on the input — the length of the signature will vary.
A request is passed to IBM’s Blockchain network to add this signature and transaction record to the data block. Peers in the network use the public key (a publicly-known pair of ANZ’s private key) to verify the signature and transaction record — whether or not the data was signed by the valid private key and for the attached transaction data. Once 50% of the peers in the Blockchain network successfully verified. All the peers begin adding data to the block.
To know about internal functions involved in adding data to a data block you can read the next part of this article: what keeps a Blockchain secure?
Added record is accessible to read by anyone but editing is resisted.
The importance of Public and Private keys in keeping Blockchain secure and resist mutation is better understood when in action. In the following video, I have used visual aids to mimic the behavior of Blockchain components and Keys pair.