Adopting Blockchain Technology (Mint)

Mains Paper 3: Science and Tech
Prelims level: Core Components of Blockchain Architecture
Mains level: Highlights the Core Components of Blockchain Architecture

Context:

• Blockchain is a foundational technology or a platform that allows designing a secure way to record transactions and circulate it among signatories, or any kind of target group with an Internet connection.
• It's a distributed ledger technology that stores information across multiple systems in a secured manner to enable peer-to-peer transactions based on a trustworthy source. At its core, it is an extremely democratic ledger that cannot be arbitrarily manipulated and easily shareable.

Core Components of Blockchain Architecture:

• Node - user or computer within the blockchain architecture (each has an independent copy of the whole blockchain ledger).
• Transaction - smallest building block of a blockchain system (records, information, etc.) that serves as the purpose of blockchain.
• Block - a data structure used for keeping a set of transactions which is distributed to all nodes in the network.
• Chain - a sequence of blocks in a specific order.
• Miners - specific nodes which perform the block verification process before adding anything to the blockchain structure.
• Consensus (consensus protocol) - a set of rules and arrangements to carry out Blockchain operations.

How Does Blockchain Work?

• Every block in a blockchain is a record of transactions and the more of the latter, the longer the chain.
• There is minimal identifying information and every block is linked to a unique ‘digital signature’ of the transacting participants. Every block is distinguished from another through a unique code which is a string of numbers.
• When a debit or credit card is used to make a transaction, VISA or Mastercard employ their technology to verify the bank account, connect with banks and process a transaction.
• In blockchain applications, this verifying role is outsourced to several computers on a network where each has the exact same copy of the block.

Conclusion:

• These computers verify the genuineness of transaction by solving mathematical problems that can only be done in brute-force, energy intensive ways that require a lot of computational power, and therefore electricity.

  Online Coaching for UPSC PRE Exam

  General Studies Pre. Cum Mains Study Materials

Prelims Questions:

Q.1) With reference to the COVID-19, consider the following statements:
1. The World Health Organization (WHO) gave an official name for the illness caused by the new Ebola virus: COVID-19.
2. Under international guidelines, the WHO had to find a name that did not refer to a geographical location, an animal, an individual or group of people, and which is also pronounceable and related to the disease.

Which of the statements given above are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) None of the above

Ans: B
Mains Questions:
Q.1) Describe the core components of the Blockchain Architecture. How Does Blockchain Work?