Tag: Nodes

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Crypto Guides

Decentralized File Sharing – An Efficient Approach To File Transfers?

Introduction

Introduction

Introduction

An efficient file storage method, decentralized file-sharing uses multiple nodes to store files instead of using a single centralized server. With the growing complexities on the internet due to the increasing rate of web data and files communicating through HTTP, it has become highly essential to use an efficient method to store data. When the online traffic is increased, the volume of information to be transferred mounts up automatically. As a result, if we want to transfer large files, we will need more bandwidth.

What Are The Issues And How Decentralized File Sharing Helps?

Addressing all these issues, decentralized file sharing emerged as a robust solution. Torrenting was the best solution for sharing available to the general public. It is used to transfer larger audio or video files over the internet without getting hampered by the challenges of HTTP. However, there were some drawbacks to the file-sharing protocols wherein the volunteers can restrict the services and disable the nodes that can limit the transfer.

With the help of blockchain technology, the decentralized file-sharing networks can be made robust. With this file-sharing network, users are provided with incentives for their contribution. This helps in ensuring that there are enough nodes to fuel the network.

The Potentials of MultiChain File Sharing

Multichain refers to an open-source structure, which enables users to deploy private blockchain for any enterprise. MultiChain supports Mac, Linux, and Window servers and offers a streamlined API as well as Command Line Interface.

This framework addresses the issues of privacy, openness, and mining through integrated user permission management. MultiChain is essentially a permission-based private blockchain that allows nodes to join and form a network. By enabling teams to create a well-integrated and secure network, MultiChain facilitates an efficient way of file-sharing.

Security Levels of Blockchain File Sharing

In the blockchain, we get enhanced security in file sharing. This technology offers multiple levels of security, including:

  • AES key encryption with RSA enables file access to merely by the receiver. Even if the files are accessible at all blocks, only specific receivers will have access to the file.
  • Files of equal size are divided and encoded through Hex encoding, which proves to be a potential way of sending files in the streams (blocks).
  • This is the most vital, powerful, and the highest level of security. Blockchain network offers the highest level of security by ensuring the fact that a file transfer occurs when all the nodes approve it within the network.
  • All nodes can certainly see when a transaction is happening between the senders and receivers without interfering with the process. The security level offers a guarantee that merely legitimate files can be transferred via the network.

The Bottom Line

By harnessing the full potentials of decentralized file sharing, we can enjoy stress-less and efficient file transferring that is not dependent on the nodes. Blockchain technology is an emerging technology that can make the file sharing process streamlined and more efficient. The above mentioned were some key highlights of decentralized file-sharing that we need to understand.

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Crypto Guides

A Simple Guide To Cryptocurrency Fork & Its Types

Introduction

Introduction

Introduction

We have discussed many topics concerning cryptocurrencies in our previous guides. Some of them are basic, and some belong to the intermediate and advanced category. If you have been following us, you would have realized that we have chronologically structured this Crypto Guide series. Because we want you to get a clear understanding of the entire crypto market from a very basic level. Since we have completed most of the basic concepts, let’s go a bit deeper to understand more complex aspects of this space. In our article today, let’s understand the concept of Forking in cryptocurrencies.

What is a cryptocurrency fork?

You must be aware of the software updates that we keep receiving in our smartphones. These software updates typically fix the reported bugs in the existing software version or may add many other features to it to make it more secure and robust. This applies the same for cryptocurrency networks as well. Every network needs an update, and that update is known as ‘Forks.’

However, this is only one of the reasons why Forking is done. There is another crucial reason behind every blockchain Fork that has happened until now. Before understanding that, let’s understand what a Protocol is. It is essentially a set of rules that must be followed by all the existing nodes in a crypto network. Some of the rules in a protocol include Block Size, Rewards, etc. Now, let’s see the actual purpose of a Fork.

The Purpose?

When a significant part of the existing stakeholders like Miners, Developers, etc. do not agree with the updated protocols, the need for the fork arises. In simple words, when a set of important individuals in the network are not ready to follow the newly updated rules, the entire network is forked, and the process is known as Forking. Once the fork is done, a part of the network follows the new rules, and the other set follows the previously existing rules. Now, let’s understand the different types of Forks that occur in a blockchain.

Types of Forks

There are two types of Forks in the world of cryptocurrencies – Hard Fork & Soft Fork.

🍴 Hard Fork

This kind of fork results in the permanent splitting between the existing blockchain. Meaning, the network is completely divided into two and results in two different cryptocurrencies altogether. In a Hard Fork, the old nodes that resist upgrading won’t be able to process the new transactions or add new blocks to the blockchain.

For instance, let’s say after the upgrade, the new block size is changed from 4 MB to 8 MB. If the new node, which is upgraded, processes a block of 6MB, the old nodes consider them as incompatible and reject the block altogether. Each of these blockchains will have a separate community, and developers altogether. One important thing to remember is that all the transactions for the parent blockchain are copied to both of the newly formed ones. That is, if you were a part of a cryptocurrency’s original blockchain, you would be getting cryptos of newly formed ones as well.

To explain this, we would like to take one best example of a hard fork which is the Bitcoin and Bitcoin Cash. Since Bitcoin is the original blockchain, and the hard fork occurred, if you were holding 10 Bitcoins, once the fork is done, you will be receiving ten coins of Bitcoin cash as well.

🍴 Soft Fork

Unlike hard fork, the old nodes that aren’t updated with the new rules can still process the new transactions and add new blocks to the network. Hence there is no need for dividing the entire network into two different networks. The older nodes can upgrade to the new ones whenever they want to, or they can remain the same way. Also, the transaction history will remain intact until the time of the fork.

The only rule here is that the old nodes must not violate the new rules after the soft fork is done. For instance, let’s say a soft fork is done in a blockchain, and the block size is decreased from 8MB to 4 MB. The older nodes can process new transactions and add newer blocks to the network, which are only of size less than 4 MB. If the older nodes try to add a block that is of 6MB, the new nodes will reject it as the updated rules aren’t followed.

That’s about Forking and types of forks in the world of cryptos. These forks are and will continue to be an integral part of the crypto space as the adoption is increasing with time.

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Crypto Guides

How Does A Cryptocurrency Work? (Example – Bitcoin)

In the previous articles, we have learned the definition, properties, and purpose of cryptocurrency. But it is vital for us to know how cryptocurrencies work. In this article, let us

In the previous articles, we have learned the definition, properties, and purpose of cryptocurrency. But it is vital for us to know how cryptocurrencies work. In this article, let us

In the previous articles, we have learned the definition, properties, and purpose of cryptocurrency. But it is vital for us to know how cryptocurrencies work. In this article, let us find out that by taking the example of Bitcoin.

Below are some of the important terminologies you should know before going further.

Peer to Peer Network (P2P) – The networks where computational devices are joined together with the internet instead of using a central server are called peer to peer networks. Hence there is less chance of a network failure than the standard server model to form a network.

Miners – Miners are the participants in the network who validate transactions. Thus, the creation of new Bitcoins is often referred to as the mining of bitcoins.

Nodes – The individual computational devices in the network are called nodes. The nodes are joined to form a P2P network.

Consensus algorithms – To validate the transactions, the miners in the network should agree whether a transaction is valid or not. The blockchain network uses consensus algorithms to get this job done.

How does the Bitcoin network work?

The blockchain network is set up in a peer to peer way, enabling decentralization of the network effectively, removing the server model. Bitcoin network bundles a certain number of transactions into a block, and these blocks are linked using cryptographic hashing techniques. The miner should validate these blocks for the authenticity of the transactions. To confirm them, the system proposes a challenge to the miners, and the first miner to solve the problem, propagates the message throughout the network. The solution to the challenge is called ‘nonce.’ The complexity of finding this nonce increase as the number of blocks keeps increasing in the system. The other miners validate and approve the transactions if the transactions are not fraudulent.

Bitcoin as reward

The miner who achieves the solution first gets rewarded in the network in the form of Bitcoins. This is how and why the Bitcoins are generated in the network. The miners should be rewarded to keep them motivated and committed to the network. Without miners, the network wouldn’t be sustainable.

To transact Bitcoins in the network, users must pay transaction fees as well. These transaction fees are also in Bitcoin. Hence these transaction fees and Bitcoins generated are paid as a reward to the miners for validating the transactions.

POW as a consensus algorithm

Bitcoin uses Proof of Work (POW) as a consensus algorithm. POW proposes a challenge to the network, which is to be solved to validate the transactions. But why is it necessary? Because POW discourages denial of service. Below are the steps involved in POW in general.

  • The service requester requests service from the service provider.
  • The service provider gives a challenge that should be a bit complex for the service requester to resolve but easy enough for the service provider to check.
  • The service provider proposes this challenge to avoid the exploitation of the service from the service requester.

The exact same concept is used in the Bitcoin network, as well. The miner must expend a considerable amount of computational energy and electricity to solve the challenge. Because by doing this, he/she will not validate fraudulent transactions to be accurate. If they do validate fake transactions, they will lose all the time and computational power they spent and also the chance of gaining a reward. POW is the most efficient consensus algorithm so far, and it makes the Bitcoin network efficient.

We hope you understood the working of Bitcoin. Cryptocurrencies other than Bitcoin with different blockchains and consensus work in a different way. You will know about each of them in the upcoming articles. Let us know if you have any questions in the comments below. Cheers!