What are the Key Concepts of Blockchain Development?

Blockchain technology has gained massive momentum in the financial sector, healthcare, automobile, retail, manufacturing, and many more. While learning to implement blockchain in businesses, it is essential to understand the fundamental concepts. This article aims to help you know some of the basic concepts of developing apps and business solutions using blockchain technology.

Fundamentals of Blockchain Development

  • Blockchain
    The blockchain is an unalterable chain of blocks. Each block consists of data that is validated equally across all nodes. Each block comprises its hash value that acts as a unique fingerprint so that data remains tamper-proof. The information stored in the blockchain is irreplaceable and hence a new block is added to the chain in case of updating the information.
  • Decentralized Consensus
    A blockchain is a decentralized system. There is no central authority to monitor the exchange of information. Therefore, the members of blockchain need to follow consensus mechanisms for making decisions.
  • Smart Contracts 
    They are the building blocks of the blockchain. They play a vital role in governing the transactions between two or more participants on a contractual basis. 
  • Mining refers to adding or validating transactions to the distributed ledger. It generates a hash of a block to protect the integrity without a central authority.

Blockchain Consensus Algorithms

It is crucial to know about the different blockchain consensus algorithms while building the dApps, especially selecting the right blockchain platform. Some of the blockchain consensus algorithms are:

Proof of Work

It is used for validating the transactions and adding relevant blocks to the chain of a network. 

Proof of Stake

It is designed to overcome the shortcomings of the proof of work algorithm. In this algorithm, each block gets validated before adding another block to the ledger.

Proof of Elapsed Time (PoET)

PoET is designed for a permissioned blockchain network where permission is required to access the network. The permission networks decide the mining rights or voting principles. As the miner identification is necessary, the algorithm ensures secure login into the system. This algorithm depends on Intel Software Guard Extension” to execute unique codes within the network.

Practical Byzantine Fault Tolerance (PBFT)

PBFT is designed for asynchronous consensus systems. It mainly focuses on state machines and replicates the system. It reduces the possibility of network failure and inefficiency in the functioning of independent nodes.

Blockchain Development Tools

1. Geth

Geth is a command-line interface used to implement the Ethereum node in Go. With Geth, a user can mine tokens, create smart contracts, transfer funds and track the transaction history.

2. Mist

Mist is a tool connected to Geth in the background. It acts as an interface for the wallet and is used for smart contract deployment.

3.Remix

Remix is a designed suite of tools to communicate with the Ethereum platform. It is used for debug transactions saved in the Git repository. REmix IDE enables testing, deploying and debugging of smart contracts.

4.Solc (Solidity Compiler)

Solidity is a loosely-typed language to convert the solidity script into a format readable by the Ethereum Virtual Machine. Solidity compilers are solc and solc-js coded in C++ and use Emscripten to compile solc C++ to Javascript.

5. Blockchain Testnet

Testnet is just like the Ethereum blockchain, allowing developers or users to test the application before deployment.

Top Blockchain Platforms

1. Ethereum

Ethereum is an open-source blockchain-based platform for executing smart contracts on the custom-built blockchain. It uses Ethereum Virtual Machine to offer the run-time environment.

2. Hyperledger Sawtooth

It is an enterprise-oriented blockchain development platform to develop, execute and deploy distributed ledgers to maintain digital records in a decentralized way. It uses the PoET consensus algorithm to integrate with hardware security solutions.

3. Hyperledger Fabric

It is a modular platform designed for permissioned networks. It only enables authorized identities to participate in a blockchain ecosystem.

4.EOS

This blockchain platform is designed to solve issues related to scalability, decentralized storage and hosting services.

5.Hedera Hashgraph

It is a fast and secure platform that does not require computing a heavy proof of work algorithm. With virtual voting consensus, it executes thousands of transactions and verifies one million signatures in a second.

Looking for a blockchain development company for your project connect with LeewayHertz to know more about how we integrate blockchain for business operations across multiple domains.

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