Everyone, welcome back to the course, after going through what blockchain is and how blockchain is working, let us see what are the benefits of blockchain over the traditional technologies. Before understanding the advantages of blockchain, let's first see how blockchain is different from the traditional technologies. As you can see in the diagram, traditional technologies work with the client server approach. The application is hosted on a server, which is connected to a database for the travel of information. This information is further used with applications. The client can be a desktop laptop, or a mobile device.

We can also see in the diagram that we only have one server, which acts like a centralized authority where the application is hosted. single server hosting creates a focal point of failure, where attackers can attack the server and try to change some behavior of the public Even if you decide to set up some backup servers, then that will increase your overhead costs. blockchain approaches different from the traditional client server approach. As you can see in the diagram, when we are working with blockchain, we don't have a single server or a single database. We have multiple servers in the form of various nodes, which are hosted with the complete sync blockchain or database. Your application clients such as desktops, laptops, or mobile devices, connect with these nodes using the protocols and retrieve the data to perform the operations.

Any data stored on the blockchain is always shared with everyone who is a blockchain participant and made available on all the nodes. This helps us to remove the central focal authority and overheads related to backup servers and databases. COMM To the benefits of blockchain over traditional technologies, the first benefit that blockchain provides is the decentralized control. throughout our lives, we have worked with the centralized control. We have always trusted third parties or database authorities in the digital world for over everyday needs, with file sharing banking services, or cloud services. Even in the real world, we depend on the authorities to resolve over issues.

For example, in a football match, we trust referees to make the correct decisions, or we trust news media forms to provide us with the accurate news. blockchain is trying to tackle the problem of trust and reduce over dependency on the third parties. blockchain is offering a decentralized control where we don't need to trust central authorities or third parties. Trust is established by the cryptographic protocols running in the blockchain and the people connected to the blockchain. centralized control is not suitable for the future because by putting over trust in one single entity, we are creating a risk. The data or the information which is hosted over centralized authority can be compromised or hacked.

In the past, we have seen some significant hacks over central bodies, like Facebook, LinkedIn, and JPMorgan Chase. Moreover, data can also be deleted or modified by the entity themselves. By having a decentralized control where everybody in the network is hosting the data. If somebody tries to change the data, then we can verify that this fake data is not correct data, and we can remove the untrusted party from the network. Apart from that, while using centralized control. We also employ different techniques to protect data like adding multiple servers as backup services or providing fault tolerant servers behind over Application Server.

All these extra services cost significantly. But by using blockchain, there is no need to create backup services. Because Users and Computers are connected to the blockchain network. Users will host the sync data on the blockchain at their end, there will be availability of data, and there is no need to spend hundreds of dollars for safeguarding the data repositories. For example, if you have hundred computers connected to a network, and if an attacker tries to attack your network, and manages to take out five of those computers, you still have 95 computers up and running, which will make sure that your data is always available for the safe running of your applications. The second benefit blockchain offers is the provisioning of data integrity and transparency.

Blockchain technology is publicly verifiable. For example, in Bitcoin blockchain anybody In the network can see the functions and transactions being performed. Although the identities of the people who are conducting transactions are anonymous, still we can view the Bitcoin address which is being used for the transactions and the kind of behavior being achieved by the transactions. Moreover, blockchain is immutable provisioning storage of records. This means we can be sure that whatever data we are trying to retry has not been altered at all. every user on the network can only append the new data and verify the data.

If some data has to be edited. Then a new record of that data is created over the blockchain has a history of the data is available to make sure that all the different entries are transparent and verifiable. Finally, we also have got algorithms like Merkle trees and hashing algorithms, which makes sure that data integrity is maintained and even as small change inside the transaction is noticeable to the network participants. The third benefit of the blockchain is the confidentiality. Now this is confusing because we have already mentioned integrity and transparency are one of the benefits of blockchain. So if the data and the information on the blockchain are transparent, then how is it confidential?

Blockchain provides us with a system where we can establish and maintain confidentiality along with transparency. Data confidentiality is managed by the people who are doing the transactions. before storing the data over the blockchain. You can generate a cryptographic key pair and share the public key with the parties who will access your data. While performing the transaction, you can encrypt the data which you are sending over the blockchain using your private key. And on the other end, the person who is retrieving the data can decrypt the data using the public key shared by you Moreover, now we also have permissioned blockchains in the market such as hyper ledger or three coda and multi chain.

These help us with the permission management for data transactions and addresses. You can provide read permissions to addresses or accounts, which are going to access your data. And only the owners of those addresses or our accounts will be able to see your data. Also, everyone sees the blockchain, your permission data will be seen as encrypted information to others who don't have access to your data. Another benefit provided by blockchain is the enhanced security. Security is established in blockchain by the border nine cryptographic protocols running within the blockchain.

Most of the blockchain platforms work with ecdsa algorithms for the generation of key players currently breaking the ecdsa algorithm with the brute force would require around 130 years and almost half the power of the sun. This is a very vast amount of time and energy needed to hack anything. Moreover, blocks are encrypted and linked to the previous block. Even if a person tries to change something inside the blockchain, they need to modify the whole chain. Other protocols like peer to peer and synchronization of data on multiple computers, make sure that any change in the blockchain network is noticeable to all the participants. protocols can even act to remove the malicious party from the network information store across the network of computers.

Also make sure that the blockchain is safeguarded from DDoS attacks. Finally, there is a cryptographic digital print for each block and this acts as a verification protocol for all the data in the block. The next benefit provided by blockchain is fast processing. The traditional banking processes takes a lot of time to settle more significant transactions. But blockchain has reduced the time almost two seconds. Nearly 90% of the banks throughout the world are currently working on finding a blockchain solution, which can be integrated with their legacy systems.

Moreover, industries like Walmart and Nestle are working with IBM to track the products for their supply chain. A recent BOC helped them in reducing the tracking of pork and mango slices from 18 days to two seconds. blockchain makes sure that you trust the information that you are retrieving because it's available to everyone and the cryptographic protocols help in the data protection and transaction efficiency. It might be confusing that we have mentioned fast processing as one of the benefits. And on the other hand, we mentioned that Bitcoin blockchain takes so much time to process the transition Bitcoin is a public chain which is open to everyone and it is working on an algorithm known as proof of work. proof of work is based upon the computing power of the computers, which are connected to the network.

However, if you check out the initial stages of Bitcoin by the year 2011 and 2012, the processing of Bitcoin was at very high speed, and we were able to do the transactions very fast. Currently, due to high difficulty the Bitcoin blockchain has become more complex and slow to mine. To conclude, if you start your private chain with the aim of doing transaction more quickly, you can achieve that with blockchain. Certain platforms like hyper ledger provides you with the throughput up to 15,000 transactions per second. We hope now you have a better grasp of how blockchain is beneficial over traditional technologies. In the next session, we will see how blockchain is different from Bitcoin and also break the myth of Bitcoin being the blockchain.

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