The need for blockchain

The main objective of blockchain is to accept transactions from accounts, update the current state, and maintain this state till another transaction updates it again. This entire process can be divided into two phases in blockchain. There is a decoupling in between when a transaction is accepted by Ethereum and when the transaction is executed and written to the ledger. This decoupling is quite important for decentralization and distributed architecture to work as expected.

Blockchain helps primarily in the following three different ways:

• Trust: Blockchain helps in creating applications that are decentralized and collectively owned by multiple people. Nobody within this group has the power to change or delete previous transactions. Even if someone tries to do so, it will not be accepted by other stakeholders.
• Autonomy: There is no single owner for blockchain-based applications. No one controls the blockchain, but everyone participates in its activities. This helps in creating solutions that cannot be manipulated or corrupted.
• Intermediaries: Blockchain-based applications can help remove intermediaries from existing processes. Generally, there is a central body, such as vehicle registration and license issuing, that acts as a registrar for registering vehicles as well as issuing driver licenses. Without blockchain-based systems, there is no central body, and if a license is issued or a vehicle is registered after a blockchain mining process, that will remain a fact for an epoch (an epoch is a period of time – say, 5 seconds) without the need of any central authority vouching for it.

Blockchain is heavily dependent on cryptography technologies, as we will discuss in the following section.