Basic blockchain

Individual working as a group across the globe on the blockchain. Each with computer plugin into the blockchain.

The Inner Workings of Blockchain

Embracing Decentralization for Power Distribution Across Nodes by Melvin Hoyk.

Individual working as a group across the globe on the blockchain. Each with computer plugin into the blockchain.

Blockchain technology, with its promise of decentralisation, transparency, and security, has revolutionised numerous sectors, from finance and healthcare to the supply chain and education. But how does blockchain work, and what makes it so different from the traditional internet infrastructure? Let’s explore these questions and more.


Centralised Vs. Decentralised Networks
The traditional internet infrastructure operates on a centralised model. Information flows through servers owned by Internet Service Providers (ISPs), tech giants like Google or Amazon, or other third parties. While effective, this system presents potential vulnerabilities, such as single points of failure or misuse of data.

       Unlike traditional systems, blockchain operates on a decentralised model where control isn’t held by a single entity. Instead, the network is maintained by numerous nodes, or computers, participating globally. This means anyone, anywhere with an internet connection can join the network. Consequently, blockchain and its associated cryptocurrencies are not restricted to the rules or economy of any one country. Even if one nation imposes limitations, the activities can continue in other parts of the world. In essence, blockchain is a global, democratised system of digital trust.


The Role of Nodes in a Blockchain Network
Nodes are the lifeline of a blockchain network. Each one holds a copy of the entire blockchain, including all transactions ever made. They follow a consensus protocol to agree on the contents of the blockchain, ensuring no single party can manipulate the data.

       Nodes have a crucial role in the functioning of the blockchain network. They validate transactions and record them onto the blockchain. When a new block is added, all nodes must agree on the validity of the transactions it contains.
       Importantly, a node must be online to perform its functions. If a node goes offline, it will not be able to validate and propagate transactions. However because there are numerous nodes in a network, the system can withstand several nodes going offline without compromising the operation or security of the blockchain.


Who Runs the Nodes?

An assortment of participants run nodes:

    1. Individual enthusiasts who support the technology or philosophy of decentralisation.
    2. Miners and stakers who validate transactions and create new blocks in return for rewards.
    3. Businesses and service providers offering blockchain-related services need up-to-date blockchain data.
    4. Developers and researchers who conduct tests, develop blockchain software, or perform data analysis.
    5. Non-profit foundations and consortiums run nodes to support the network.
    In this decentralised network, each participant has their reasons and benefits for running nodes, reinforcing the network’s resilience and security.


Blockchain and Node.js: A Clarification
One common point of confusion is the difference between blockchain nodes and Node.js. Blockchain nodes are computers maintaining the network, while Node.js is a JavaScript runtime environment used for developing server-side applications. The term “node” in both instances refers to their function as a network node, albeit in entirely different contexts.

Interior of a huge library setup as blockchain metaphor.

The Blockchain Public Library Metaphor

    1. Blockchain as a Library: Imagine the blockchain as a public library that exists everywhere in the world, with many branches spread across a network of computers. 🏛️
    2. Blocks as Books: Each book (block) contains a list of transactions, like a historical record. These books are written in ink – entries are permanent and unalterable. 📚
    3. Nodes as Librarians: Our library wouldn’t function without librarians. Similarly, nodes in the blockchain maintain the system. They have a copy of the entire library (blockchain) and follow the network’s rules. Librarians (nodes) validate new entries (transactions) and add them to new books (blocks). 📖
    4. Chain of Books: The books are arranged chronologically, forming a chain, and each new book added makes the previous ones more secure. 🔗
    5. Immutable Rules: The library has strict rules for borrowing and returning books – these reflect the unchangeable nature of blockchain transactions. 📖

Our public library metaphor simplifies the core features of blockchain technology: decentralisation, immutability, security, and transparency. Think of the blockchain library as always open 24/7, ensuring efficient transactions, with librarians (miners) maintaining order.


Conclusion
Blockchain technology has significantly transformed our perception of secure, transparent, and decentralised transactions. By understanding its inner workings, we can better appreciate its potential and applications. Whether it’s individuals with an interest in decentralisation, businesses leveraging the technology, or developers exploring new possibilities, everyone contributes to maintaining the robust and secure functioning of the blockchain network.
Blockchain technology, while complex, operates on the principles of transparency, security, and decentralisation, making it a revolutionary force in today’s digital world.

Image: a group of people forming a society forming a governance in blockchain called DAO (Decentralised Autonomous Organisation)

Societal Revolution Through Blockchain Empowerment

In our previous piece, “Blockchain Unchained: A Beginner’s Guide”, we dove into the technical aspects of blockchain technology. We deciphered how this revolutionary technology maintains a public ledger of transactions, secured through cryptographic methods, providing an immutable and transparent record. For this article, we are going to shift our lens. We’ll look at how blockchain technology is doing more than just powering cryptocurrencies; it’s reshaping society and empowering individuals and communities.


Blockchain Reshaping Society
Blockchain is more than just a buzzword; it’s a tool that’s restructuring society as we know it. This technology allows for decentralisation and transparency in operations, disrupting traditional systems. For instance, in supply chain management, blockchain can track the journey of a product from the manufacturer to the customer, ensuring transparency and reducing fraud. In healthcare, it can create a secure, unchangeable record of a patient’s history, improving diagnostics and treatment. Furthermore, the incorporation of blockchain into voting systems and Decentralised Autonomous Organizations (DAOs) can lead to tamper-proof, transparent, and more accessible elections, reshaping governance on a global scale. DAOs, which are blockchain-based organizations controlled by their members, offer an exciting example of how this technology can democratise decision-making processes.”


Empowering Individuals and Communities
Beyond revolutionising sectors, blockchain is also about shifting power dynamics. By enabling peer-to-peer interactions, it reduces reliance on centralised institutions, thus giving individuals and communities more control. It facilitates direct transactions between parties anywhere in the world, making cross-border payments swift, secure, and cost-effective. This is particularly valuable for unbanked communities, who gain access to financial services without the need for traditional banks. Blockchain is not just a technological innovation; it’s a tool for economic empowerment and equality.


Looking Ahead
The full potential of blockchain technology is yet to be realised. It’s a rapidly evolving field that promises to bring transformative changes to our society. By understanding its impact and possibilities, we can be better prepared for this future. In the coming era, blockchain could become as integral to our daily lives as the internet is today.


Blockchain technology is much more than a digital ledger for cryptocurrencies. It’s a revolutionary system that can bring about profound changes in various sectors of society, enhancing transparency and empowering individuals and communities. As we continue to explore the potential of this technology, it becomes clear that blockchain’s decentralising influence is set to reshape the contours of our society in unprecedented ways.
      Remember, these shifts won’t happen overnight, and every transformative technology has its share of challenges. As we journey into the future, understanding, adapting, and innovating will be key to navigating the exciting realm of blockchain. – written by Melvin Hoyk.