Blockchain - Privacy | Blockchain Tutorial

In this tutorial you will learn Blockchain – Privacy step by step. So without much to do let’s get started.

What is Blockchain?

A blockchain is a continuously developing ledger which continues a permanent record of all the transactions which have taken place in a secure, chronological, and immutable way.

Let’s breakdown the definition,

o Ledger: It is a record this is constantly growing.
O Permanent: It means once the transaction is going internal a blockchain, you can put up it completely within the ledger.

O Secure: Blockchain placed information in a secure way. It uses very advanced cryptography to ensure that the data is locked inside the blockchain.

O Chronological: Chronological means each transaction happens after the previous one.

O Immutable: It method as you construct all the transaction onto the blockchain, this ledger can never be changed.

A blockchain is a chain of blocks which include records. Each block records all of the latest transactions, and as soon as finished goes into the blockchain as a permanent database. Each time a block gets finished, a brand new block is generated.

Note: A blockchain may be used for the secure transfer of money, property, contracts, and so forth. Without requiring a third-party intermediary like bank or government. Blockchain is a software protocol, but it couldn’t be run without the Internet (like SMTP used in email).

Blockchain – Privacy

As the ledger that’s recording all of the bitcoin transactions is made actually public, the privacy is at stake. Anybody inside the world might be capable of recognize who paid whom? The conventional banking system is able to maintain this kind of privacy through keeping its records confidential.

Privacy in Bitcoin system is achieved by a different strategy. Note that we said that the sender of a bitcoin needs to know whom to pay. So he asks for the public key of the vendor to which he wants to make the payment. This public key may be anonymous.

In the sense, as a vendor of some services, when somebody asks you wherein to send the payment, you will simply send him your public key. The association of this public key with you isn’t recorded everywhere in the ledger. That manner every person outside of this transaction would most effective recognise how much money is transacted and to which public key the money is paid out.

To attain a higher degree of privacy, for every transaction, you may generate a new non-private/public key for each transaction so that multiple transactions made by you can not be grouped together by a third party. For an outsider, this would simply mean that multiple transactions of smaller values were made and they may by no means may be linked to a common source.

Lastly, any online internet based system is vulnerable to abuses. I will now describe few possible varieties of attacks on Bitcoin system and how those are mitigated.