What the difference is between private and public Blockchains and more.
If you have been following the technology news, you have likely heard of blockchain, especially as it relates to cryptocurrency. The technology has attracted a lot of attention as a means to secure and process digital transactions in ways that we have not seen before. This has resulted in substantial interest from businesses and governments alike.
But what kind of infrastructure does blockchain run on? How does it work? How does this affect blockchain networks overall? This article explores these questions and more.
Investopedia says an infrastructure is the basic physical and organizational structures (e.g., roads, bridges, airports, and harbors) needed for the operation of a society or enterprise. In relation to computing infrastructure: The basic hardware, software, networks, and storage that run computers or computer-based systems. This would include hardware such as hard drives, motherboards, and processors as well as programs such as operating systems and databases.
Most blockchain-based systems are not dependent on a certain infrastructure. However, there are some ways in which they can be tailored to better suit specific hardware and software. The most notable is Proof-of-Work (PoW) consensus algorithms such as Bitcoin’s SHA256, Ethereum’s Ethash, and Dash’s X11. All of these PoW algorithms require a large amount of computing power to solve mathematical puzzles in order to verify transactions. Rewards are generated for users who contribute that computing power.
Both private and public blockchains run on something called distributed ledgers. It’s a network of computers that holds records in a manner that lets each computer verify any changes made to those records. Distributed ledgers are updated as soon as changes are made. Since every computer maintains its own copy, they don’t require central servers or clearinghouses to run. Distributed ledgers eliminate concerns over centralized storage and any opportunities for single points of failure, making them far more secure than traditional methods like databases.
Private blockchains, or permissioned blockchains, are restricted to an agreed-upon set of participants. These participants are known to each other — whether it’s due to a pre-existing relationship or vetting that occurs before being granted access. Because participants are all known to each other, private blockchains typically take less computing power and resources to run, however, a downside is that these systems are more centralized.
This makes them ideal for testing and small-scale projects! They can even be used in mission-critical systems as long as there’s a small number of users who trust each other. Enterprise blockchains also fall into this category.
Public blockchains like Bitcoin and the Ethereum blockchain run on a large network of computers that anyone can join. There is no centralized authority to confirm transactions, instead, transactions are confirmed by consensus, which means every computer in the network has to agree with each other about what happened. This is a huge advantage for creating systems that are truly decentralized.
Regardless of which type of blockchain you choose, you need to consider two important factors when choosing your infrastructure: consensus and network. When it comes to a consensus, there are two main ways blockchains can verify transactions — Proof of Work (PoW) and Proof of Stake (PoS).
Compared to permissioned/private blockchains, public blockchains, currently aren’t as fast or cheap, however with scaling solutions in the works, these issues may soon be a thing of the past. Public blockchains that use proof-of-work (PoW), proof-of-stake (PoS), or other consensus mechanisms make it very easy to send and receive digital currency. That’s why most tokens/projects are built on top of blockchains like Ethereum and Solana.
The infrastructure for blockchain technology is a bit more technical than most people think. That’s because there are different layers that make up what we commonly call blockchain technology. Each layer serves a specific purpose and must work seamlessly with every other layer to provide a real-world application. To understand what blockchain technology is and how it works, it helps to break it down into its core components. That includes: The Database Layer, The Consensus Layer, The Transaction Layer, and The Application Layer.
Cartesi, The Blockchain OS, is a layer-2 platform for the development and deployment of scalable decentralized applications. The Blockchain OS offers a Linux operating system coupled with a blockchain infrastructure. This allows for DApps to be developed in familiar programming languages like Python without the need to write Solidity code.
If you’re a developer, you can use all the programming languages, tools, libraries, software, and services you are already familiar with. By moving most of the complex logic of their DApps to portable off-chain components, developers are freed from the limitations and idiosyncrasies imposed by blockchains. In this way, Cartesi empowers developers to select the best run-time environment in which to host each part of their DApps.
The Blockchain OS’ infrastructure consists of:
- The Cartesi Machine: the core technology, a virtual machine that allows for verifiable computing using a Linux operating system
- Cartesi Rollups: a full solution for scaling blockchains that uses the Cartesi Machine within an Optimistic Rollups framework
Smart contracts are more than just a new technology; they bring disruption to existing business models, such as supply chains. To see how, take a look at smart contract case studies from around the world. For example, in 2016, The World Bank worked with blockchain startup Energy Web Foundation (EWF) to create carbon credits for off-grid solar energy in Moldova. This further connected citizens to decentralized technologies and reduced reliance on centralized systems that fail to provide consistent support and power.
EWF and The World Bank are currently piloting another solar project in Uganda — one that uses blockchain to track each watt generated. EWF estimates that using a smart metering system can reduce costs associated with installing and maintaining meters by 25 percent. Additionally, such a system could provide highly granular data on power generation, usage, and other statistics. This would be invaluable to regional planners looking to make more informed decisions about resource allocation or incentives for clean energy use.
It’s not enough to just move blockchain platforms onto a cloud computing or virtualized infrastructure. To get to where we want it to be, we need an entirely new blockchain operating system that was designed for distributed ledgers. This also needs to be operated in tandem with several other technologies. There are three primary reasons why: trust, interoperability, and scalability. Without these components of The Blockchain OS, any platform based on blockchain technology will have major limitations.
Cities are utilizing technology in more innovative ways in order to adapt to new challenges more rapidly. Citizens will have unparalleled control over their personal data thanks to blockchain technology. Sotatek, a major SDaaS partner, is helping their clients adopt cutting-edge blockchain-based technology by developing a DApp for decentralized, reliable ride-sharing on The Blockchain OS.
Sotatek intends to employ geofencing to define the acceptable zones for a journey and to impose financial penalties for deviating from a pre-approved path. On The Blockchain OS, the INPETU Institute and UFF are developing a public bus monitoring system that can issue fines for delays while staying trustless and decentralized.
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