Beyond Bitcoin: The Power of Blockchain Technology Explained

In the current working domain, there are three prominent types of blockchain that are presented below:

• Public Blockchain: These are open and permissionless blockchains where anyone can participate, validate transactions and contribute to the consensus process. Examples of this technology are Bitcoin and Ethereum. Public blockchains offer high transparency and decentralization.

• Private Blockchain: Private blockchains are permissioned networks where access and participation are restricted to specific entities or individuals. These blockchains are often used within organizations or consortia and offer more control over privacy, scalability and transaction throughput. Example of these blockchains are Walmart, FedEx.

• Consortium Blockchain: Consortium blockchains are a hybrid between public and private blockchains. They are governed by a group of preselected entities or organizations typically in specific industry or sector. Consortium blockchains provide a balance between decentralization and control, allowing multiple organizations to collaborate and share a distributes ledger while maintaining certain levels of privacy and security.

Within the realm of blockchain technology, the underlying structure commonly encompasses a comprehensive framework consisting of six discernible layers. These layers encompass the Data layer, Network layer, Excitation layer, Smart Contract Layer, Consensus layer, and Application layer.

1. Application layer encompasses the diverse range of use cases and applications of blockchain technology, such as cryptocurrency, supply chain management, smart voting systems, and smart grids, among others.

2. Smart Contract layer is responsible for executing self-executing contracts or agreements stored on the blockchain. Smart contracts define the rules and conditions for transactions and automate their execution once those conditions are met. This layer is particularly prominent in platforms like Ethereum, where smart contracts are a fundamental part of the blockchain's functionality.

3. Excitation layer assumes responsibility for managing the runtime settings of a blockchain network, encompassing the mechanisms for issuing and allowing transactions. Additionally, this layer deals with the platform components such as programming languages, virtual machines, and smart contracts that enable the execution of various tasks within applications.

4. Consensus layer stands as a pivotal component within the blockchain architecture, as it directly influences the performance of specific applications. Various consensus algorithms, including but not limited to Proof of Work (PoW), Proof of Authority (PoA), Proof of Stake (PoS), and Proof of Elapsed Time (PoET), are executed within this layer in accordance with the requirements of users.

5. Network layer governs decentralized communication and oversees the management of Internet Protocol (IP). Its primary function lies in facilitating data communications among nodes within the network.

6. Data layer assumes responsibility for managing the overall structure of a blockchain network through the utilization of fundamental components such as data blocks, chain structures, timestamps, hash functions, Merkle trees, and public-key encryption.

Blockchain technology has gained recognition for its potential application across multiple sectors. One of the most well-known use case is in the financial industry where it enables secure and efficient peer-to-peer transactions eliminating the need for intermediaries such as Banks.

Another domain where blockchain technology can deliver substantial advantages is supply chain management. By enabling transparency and traceability across entire supply chain, blockchain ensures the authenticity of products and mitigates the risk of counterfeiting, this capability fosters trust and accountability among stakeholders, bolstering the efficacy and integrity of supply chain operations.

Furthermore, blockchain technology holds immense potential to transform various sectors including healthcare, intellectual property, voting system, Internet of Things (IoT) and other more. By leveraging blockchain, these sectors can benefit from enhanced security, transparency and efficiency, leading to significant advancements and improvements in their respective fields.