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Each block in a blockchain consists of a block header and a

block body. Block header consists of the block version,

Merkle tree root hash, timestamp, n Bits, Nonce and Parent

block hash.

Transaction counter

and

transactions

are including in the block body. Block size and size of each

transaction determines a block’s maximum number

of transactions.

For validating

a transaction,blockchain uses asymmetric cryptography me

chanism.

Blockchain client that implement in smartphone can easily

verify

their

transaction

using Simple

Payment

Verification[SPV][1]. This lightweight client need only to

download the header of the blocks for verification of

transaction.

Characteristics of Blockchain

The main characteristics[2] of Blockchain are

Decentralization: In Blockchain there is no need for the third

party like centralized transaction system. So, it reduces the

cost

and

effort,

and

gives

better

performance. Consensus algorithms are uses in blockchain

for maintaining data consistency in distributed networks.

Persistency: If a node validates a transaction and put it in a

blockchain it is not possible to delete or rollback.

Honest miners never add invalid transaction in the block

and they quickly find out such false nodes.

Pseudonymity :For hiding personal information some of

them uses a nickname or false name or other entity name

for

establishing

relationship

with others.

This helps anonymity in some level of privacy, but it is not

fully anonymous.

Cryptographic hash function: Hash function takes any size

of input and give fixed length of output. It is

efficiently computable, irreversible,

collision resistance,

hiding and puzzle friendly.

Cryptographic guarantees: In Blockchain,

End users are signed all transaction. This transaction is

verified

by

user’s public key.

This signing guarantees the integrity, non- reputation and

authenticity.

Transparency: After verification of each transaction with

timestamp it includes in the distributed ledger.

Once transaction is recorded, it can verify any node and

data recorded in it and no one cannot delete or alter

the records.

Types of Blockchain

The types of blockchain are available in the market

are Permissioned(Private), Permissionless

(Public) and

consortium blockchain.

Permissionless(public) Blockchain

If anyone can read blockchain content or add nodes, this

type of blockchain is called public blockchain[1]. Bitcoin is

the publicly available blockchain and anyone can freely

download it and do mining problem. Ethereum

is another digital currency also permission less blockchain

and anyone can add smart contract to this network.

Permissioned (Private) Blockchain

In private blockchain, all users cannot freely join the network,

view the transaction history or issue their own transactions.

Centralized organizations are preferred this blockchain due

to the power of their own network for their own operations

within their network. In the private blockchain[1], only

authorized person has the permission to validating

transaction, issuing transaction, reading transaction history

or executing smart contract.

Governance, transparency, anonymity and

varying

decentralization are the features of the permissioned

blockchain. Blockstack and Multichain are examples of the

private blockchain.

Consortium Blockchain

Consortium

blockchain[1]

is

semi-decentralized,

controlled by group of authorized persons with permission

other

than

single

entity

and

consensus

process is handle a group

of pre-approved nodes

in

the network. Hyperledger, Corda an

d Quorum

are example

of this network.

Using Anchoring in Blockchain technology block hashes of

private chain can write to public chain. This can help to

verify the transaction include in the ledger are validated and

it also strengthen the immutability.

Consensus Algorithms in Blockchain

Blockchain technology is distributed and there is no single

point of failure due to all nodes in the network have a copy

of blockchain structure. In this distributed nature, nodes

reach the agreement between each other by obtained by

use

of consensus

algorithm[1].

Proof of Work(PoW) is a trustless and distributed

consensus algorithm use in Bitcoin network and miners

need to solve cryptographic puzzles for getting rewards and

add new node in the blockchain. Proof

Delegated Stake(DPoS),

Proof-of-Burn(PoB),Proof-of-Capacity(PoC),

Proof-of-Activity(PoA) etc. are other important consensus

algorithms uses in cryptocurrency.