"Everything will be tokenized and connected by
a blockchain one day."
-- Fred Ehrsam co-founder of the cryptocurrency exchange Coinbase
and the venture investment firm Paradigm.
What is the Blockchain?
Simply put, a blockchain is a special kind of
database. According to cigionline.org, the term blockchain
refers to the whole network of distributed ledger technologies.
According to Oxford Dictionaries, a ledger is “a book or other
collection of financial accounts of a particular type.” It
can be a computer file that records transactions. A ledger
is actually the foundation of accounting and is as old as
writing and money.
Now imagine a whole suite of incorruptible digital
ledgers of economic transactions that can be programmed to
record and track not only financial transactions but also
virtually everything of value. The blockchain can track things
like medical records, land titles, and even voting. It’s a
shared, distributed, and immutable ledger that records the
history of transactions starting with transaction number one.
It establishes trust, accountability, and transparency.
Blockchain stores information in batches called
blocks. These blocks are linked together in a sequential way
to form a continuous line. A chain of blocks. A blockchain.
Each block is like a page of a ledger or a record book.
As you can see in the figure, each block mainly has three
elements:
Data: The type of data
depends on what the blockchain is being used for. In Bitcoin,
for example, a block’s data contains the details about
the transaction including sender, receiver, number of
coins, and so on.
Hash: No, I’m not talking
about that kind of hash. A hash in blockchain is something
like a fingerprint or signature. It identifies a block
and all its content, and it’s always unique.
Hash of previous block:
This piece is precisely what makes a blockchain! Because
each block carries the information of the previous block,
the chain becomes very secure.
Three main elements of a block:
Data
Hash
Hash of previous block
Here’s an example of how a bunch of blocks come together
in a blockchain. Say you have three blocks.
Block 1 contains this stuff:
Data: 10 Bitcoins from Fred to Jack
Hash (simplified): 12A
Previous hash (simplified): 000
Block 2 contains this stuff:
Data: 5 Bitcoins from Jack to Mary
Hash (simplified): 3B4
Previous hash: 12A
Block 3 contains this stuff:
Data: 4 Bitcoins from Mary to Sally
Hash (simplified): C74
Previous hash: 3B4
As you can see in the following figure, each
block has its own hash and a hash of the previous block. So,
block 3 points to block 2, and block 2 points to block 1.
(Note: The first block is a bit special because
it can’t point to a previous block. This block is the genesis
block.)
Simplified Version of How a Blockchain Works
The hashes and the data are unique to each block,
but they can still be tampered with. The following section
lays out some ways blockchains secure themselves.
How Does a Blockchain Secure Itself?
Interfering with a block on the blockchain is
almost impossible to do. The first way a blockchain secures
itself is by hashing. Tampering with a block within a blockchain
causes the hash of the block to change. That change makes
the following block, which originally pointed to the first
block’s hash, invalid. In fact, changing a single block makes
all the following blocks invalid. This setup gives the blockchain
a level of security.
On top of the hashes, blockchains have additional
security steps including things like proof-of-work and peer-to-peer
distribution. A proof-of-work (PoW) is a mechanism that slows
down the creation of the blocks. In Bitcoin’s case, for example,
it takes about ten minutes to calculate the required PoW and
add a new block to the chain. This timeline makes tampering
with a block super difficult because if you interfere with
one block, you need to interfere with all the following blocks.
A blockchain like Bitcoin contains hundreds of thousands of
blocks, so successfully manipulating it can take over ten
years!
A third way blockchains secure themselves is
by being distributed. Blockchains don’t use a central entity
to manage the chain. Instead, they use a peer-to-peer (P2P)
network. In public blockchains like Bitcoin, everyone is allowed
to join. Each member of the network is called a validator
or a node. When someone joins the network, they get the full
copy of the blockchain. This way, the node can verify that
everything is still in order.
Here’s what happens when someone creates a new
block in the network:
The new block is sent to everyone in the
network.
Each node then verifies the block and
makes sure it hasn’t been tampered with.
If everything checks out, each node adds
this new block to their own blockchain.
All the nodes in this process create a consensus.
They agree about which blocks are valid and which ones aren’t.
The other nodes in the network reject blocks that are tampered
with.
So, to successfully mess with a block on a blockchain,
you’d need to tamper with all the blocks on the chain, redo
the proof-of-work for each block, and take control of the
peer-to-peer network!
Blockchains are also constantly evolving. One
of the most recent developments in the cryptocurrency ecosystem
is the addition of something called a smart contract. A smart
contract is a digital computer program stored inside a blockchain.
It can directly control the transfer of cryptocurrencies or
other digital assets based on certain conditions.
Why Is Blockchain Revolutionary?
Here are three main reasons blockchain is different
from other kinds of database and tracking systems already
in use.
Blockchain May Eliminate Data Tampering Because of the Way
It Tracks and Stores Data
If you make a change to the information recorded
in one particular block of a blockchain, you don’t rewrite
it. Instead the change is stored in a new block. Therefore,
you can’t rewrite history — no one can — because that new
block shows the change as well as the date and the time of
the change. This approach is actually based on a century-old
method of the general financial ledger.
Suppose that Joe and his cousin Matt have a
dispute over who owns the furniture shop they’ve been comanaging
for years. Because the blockchain technology uses the ledger
method, the ledger should have an entry showing that P.J.
first owned the shop in 1947. When P.J. sold the shop to Mary
in 1976, they made a new entry in the ledger, and so on. Every
change of ownership of this shop is represented by a new entry
in the ledger, right up until Matt bought it from his uncle
in 2009. By going through the history in the ledger, Matt
can show that he is in fact the current owner.
Now, here’s how blockchain would approach this
dispute differently than the age-old ledger method. The traditional
ledger method uses a book, or a database file stored in a
single (centralized) system. However, blockchain was designed
to be decentralized and distributed across a large network
of computers. This decentralizing of information reduces the
ability for data tampering.
Blockchain Creates Trust In the Data
The unique way blockchain works creates trust
in the data. I get more into the specifics earlier in this
chapter, but here’s a simplified version to show you why.
Before a block can be added to the chain, a few things have
to happen:
A cryptographic puzzle must be solved
to create the new block.
The computer that solves the puzzle shares
the solution with all the other computers in the network.
Finally, all the computers involved in
the network verify the proof-of-work. If 51 percent of
the network testifies that the PoW was correct, the new
block is added to the chain.
The combination of these complex math puzzles
and verification by many computers ensures that users can
trust each and every block on the chain. Heck, one of the
main reasons I’m a big supporter of cryptocurrencies is that
I trust in the blockchain technology so much. Because the
network does the trust-building for you, you now have the
opportunity to interact with your data in real time.
Centralized Third Parties Aren’t Necessary
In my previous example of the dispute between
Joe and Matt, each of the cousins may have hired a lawyer
or a trusted centralized third party to go through the ledger
and the documentation of the shop ownership. They trust the
lawyers to keep the financial information and the documentation
confidential. The third-party lawyers try to build trust between
their clients and verify that Matt is indeed the rightful
owner of the shop.
The problem with centralized third parties and
intermediaries such as lawyers and banks is that they add
an extra step to resolving the dispute, resulting in spending
more time and money.
If Matt’s ownership information had been stored
in a blockchain, he would’ve been able to cut out the centralized
middleman, his lawyer. That’s because all blocks added to
the chain would’ve been verified to be true and couldn’t be
tampered with. In other words, the blockchain network and
the miners are now the third party, which makes the process
faster and more affordable. So, Matt could simply show Joe
his ownership information secured on the blockchain. He would
save a ton of money and time by cutting out the centralized
middleman.
This type of trusted, peer-to-peer interaction
with data can revolutionize the way people access, verify,
and transact with one another. And because blockchain is a
type of technology and not a single network, it can be implemented
in many different ways.
Source
How Are Blockchains Used?
As we now know, blocks on Bitcoin’s blockchain
store transactional data. Today, tens of thousands of other
cryptocurrencies run on a blockchain. But it turns out that
blockchain can be a reliable way to store other types of data
as well. Some companies experimenting with blockchain include
Walmart, Pfizer, AIG, Siemens, and Unilever, among others.
For example, IBM has created its Food Trust blockchain to
trace the journey that food products take to get to their
locations. Why do this? The food industry has seen countless
outbreaks of E. coli, salmonella, and listeria; in some cases,
hazardous materials were accidentally introduced to foods.
In the past, it has taken weeks to find the source of these
outbreaks or the cause of sickness from what people are eating.
Using blockchain allows brands to track a food product’s route
from its origin, through each stop it makes, to delivery.
Not only that, but these companies can also now see everything
else it may have come in contact with, allowing the identification
of the problem to occur far sooner—potentially saving lives.
This is one example of blockchain in practice, but many other
forms of blockchain implementation exist or are being experimented
with.
Blockchain can be used to immutably record any
number of data points. The data can be transactions, votes
in an election, product inventories, state identifications,
deeds to homes, and much more. Currently, tens of thousands
of projects are looking to implement blockchains in various
ways to help society other than just recording transactions—for
example, as a way to vote securely in democratic elections.
The nature of blockchain's immutability means that fraudulent
voting would become far more difficult. For example, a voting
system could work such that each country's citizens would
be issued a single cryptocurrency or token. Each candidate
could then be given a specific wallet address, and the voters
would send their token or crypto to the address of whichever
candidate they wish to vote for. The transparent and traceable
nature of blockchain would eliminate the need for human vote
counting and the ability of bad actors to tamper with physical
ballots.
Healthcare
Healthcare providers can leverage blockchain to store their
patients’ medical records securely. When a medical record
is generated and signed, it can be written into the blockchain,
which provides patients with proof and confidence that the
record cannot be changed. These personal health records could
be encoded and stored on the blockchain with a private key
so that they are only accessible to specific individuals,
thereby ensuring privacy.
Property Records
If you have ever spent time in your local Recorder’s Office,
you will know that recording property rights is both burdensome
and inefficient. Today, a physical deed must be delivered
to a government employee at the local recording office, where
it is manually entered into the county’s central database
and public index. In the case of a property dispute, claims
to the property must be reconciled with the public index.
This process is not just costly and time-consuming, it is
also prone to human error, where each inaccuracy makes tracking
property ownership less efficient. Blockchain has the potential
to eliminate the need for scanning documents and tracking
down physical files in a local recording office. If property
ownership is stored and verified on the blockchain, owners
can trust that their deed is accurate and permanently recorded.
Proving property ownership can be nearly impossible in war-torn
countries or areas with little to no government or financial
infrastructure and no Recorder’s Office. If a group of people
living in such an area can leverage blockchain, then transparent
and clear timelines of property ownership could be maintained.
Smart Contracts
A smart contract is computer code that can be built into the
blockchain to facilitate transactions. It operates under a
set of conditions to which users agree. When those conditions
are met, the smart contract conducts the transaction for the
users.
Supply Chains
As in the IBM Food Trust example, suppliers can use blockchain
to record the origins of materials that they have purchased.
This would allow companies to verify the authenticity of not
only their products but also common labels such as “Organic,”
“Local,” and “Fair Trade.” As reported by Forbes,
the food industry is increasingly adopting the use of blockchain
to track the path and safety of food throughout the farm-to-user
journey.
Voting
As mentioned above, blockchain could facilitate a modern voting
system. Voting with blockchain carries the potential to eliminate
election fraud and boost voter turnout, as was tested in the
November 2018 midterm elections in West Virginia. Using blockchain
in this way would make votes nearly impossible to tamper with.
The blockchain protocol would also maintain transparency in
the electoral process, reducing the personnel needed to conduct
an election and providing officials with nearly instant results.
This would eliminate the need for recounts or any real concern
that fraud might threaten the election.
Source
Gnodi Blockchain
Gnodi Blockchain
The Gnodi Blockchain features a robust and scalable architecture
that ensures security, efficiency, and flexibility. The blockchain
structure divides into two primary layers: Layer One Validators
and Layer Two Delphi Nodes. Each layer plays a crucial role
in maintaining the network’s functionality, security, and
overall performance.
Layer One: Validators
Layer One of the Gnodi Blockchain consists of validators that
operate using a Proof-of-Stake (PoS) consensus mechanism.
These validators secure the network and validate transactions.
1. Proof-of-Stake (PoS) Mechanism:
The Gnodi Blockchain employs a Proof-of-Stake consensus mechanism
that relies on validators staking the Gnodi Staking Token
(GST) as collateral. This process incentivizes validators
to act honestly and secure the network, as they have a financial
stake in the system.
Validators create new blocks and validate transactions
based on the amount of GST they stake. The more tokens staked,
the higher the likelihood of being chosen as a validator,
ensuring a decentralized and secure network.
Roles and Responsibilities:
Transaction Validation:
Validators verify the accuracy and legitimacy of transactions,
ensuring all comply with the network’s rules and record
correctly on the blockchain.
Block Creation: Selected
validators create new blocks and add them to the blockchain
by grouping validated transactions, signing them with
their cryptographic key, and broadcasting them to the
network.
Security and Consensus:
Validators maintain the network’s security and achieve
consensus by voting on the validity of blocks proposed
by others, ensuring the blockchain’s integrity and continuity.
Layer Two: Delphi Nodes
Layer Two of the Gnodi Blockchain comprises Delphi Nodes,
which perform three key functions essential to the network’s
operation and utility. These nodes enhance the blockchain’s
functionality by providing services to Oracle applications
and ensuring the accurate distribution of the Gnodi native
utility token.
Authentication and Validation for Delphi
Apps:
Delphi Nodes authenticate and validate interactions with Delphi
applications—third-party services that leverage the Gnodi
Blockchain for various use cases, such as data sharing and
digital identity management.
They ensure that only authorized applications
can access the blockchain and that all interactions remain
secure and compliant with network standards, protecting the
network from unauthorized access and potential breaches.
Daily Distribution of Gnodi Utility
Token:
One critical function of Delphi Nodes involves managing the
daily distribution of the Gnodi utility token. This mechanism
rewards participants for their contributions to the network
and ensures equitable token allocation.
Delphi Nodes calculate distribution amounts
based on predefined criteria and distribute tokens to eligible
participants, ensuring fair and transparent allocation that
incentivizes active participation and engagement within the
community.
Validation of the Proof-of-Impact Protocol:
The Proof-of-Impact protocol uniquely validates user data
and behavior to determine their contribution to the network.
Delphi Nodes validate this data and ensure its accuracy.
The protocol assesses various metrics, including
user activity, contributions to Delphi applications, and overall
network impact. Delphi Nodes validate the data based on this
assessment and contribute to the daily distribution of Gnodi
tokens, ensuring merit-based allocation that rewards meaningful
contributions.
Integration and Coordination
Integration and coordination between Layer One Validators
and Layer Two Delphi Nodes ensure the seamless operation of
the Gnodi Blockchain. These layers collaborate to provide
a secure, scalable, and efficient network that meets the diverse
needs of its community.
Inter-Layer Communication:
Validators and Delphi Nodes communicate through established
protocols to ensure the integrity and continuity of the blockchain.
Validators provide foundational security and consensus, while
Delphi Nodes enhance the network’s utility and functionality.
This inter-layer communication synchronizes
all parts of the network, enabling efficient and effective
operations.
Collaborative Governance:
Both Layer One Validators and Layer Two Delphi Nodes participate
in the governance of the Gnodi Blockchain. They collaborate
on decision-making processes, proposal reviews, and the implementation
of network upgrades and changes.
This collaborative approach ensures governance
decisions reflect the interests and expertise of all stakeholders,
promoting a more equitable and inclusive governance framework.
Conclusion
The Gnodi Blockchain serves as a decentralized ecosystem that
empowers individuals and communities to participate in a secure
and transparent network. Its governance structure, layered
architecture, and commitment to principles of autonomy, equity,
transparency, and innovation provide the foundation for a
thriving digital community. Through continuous improvement,
collaboration, and innovation, the Gnodi Blockchain aims to
redefine the landscape of decentralized technologies and foster
a vibrant, equitable digital economy.
