Evolution of Blockchain and consensus mechanisms & its real-world applications

Distributed Ledger Technology (DLT) and blockchain are two terms that have been used interchangeably for the longest of time ever since the concept of the bitcoin cryptocurrency system was introduced by Satoshi Nakamoto in 2008. DLT can be thought of as an umbrella term that encompasses the blockchain and other type of distributed ledgers. It is a decentralized, permisionless, distributed database where each participant maintains its own copy of the distributed ledger and the records are distributed as a chain of blocks across a peer-to-peer network. This implies that a replicated database is maintained and it does not rely on a single party or an intermediary for its operation. This also happens to be the most ground breaking feature of this technology. Bitcoin blockchain can be understood as the first fully functional DLT that exists. Blockchain is rapidly evolving as the next disruptive innovation in secure connectivity, with the potential to fundamentally alter how we work and live in the twenty-first century. The key components of this technology include the miner, the consensus protocols, hashing and an asymmetric cryptography system to encrypt the data through the use of the public and the private key. All transaction in the blockchain is recorded in the form of chain of blocks. Each block contains a unique header which is mathematically and cryptographically computed and to this feature is attributed the immutable nature of the blockchain. This computed hash commits to the header of the previous block, storing the contents of the block in the form of a hash function. All the transactions in the blockchain are recorded in a block that contains a unique header which is cryptographically computed and this attributes to the immutability of the blockchain. This computed hash is stored in the header of the next block. Before a transaction is committed to the ledger, it has to be agreed upon by the active participants of the network in order to guarantee the trustworthiness of the information being incorporated into the blocks. This is where the distributed ledger consensus protocols become important. The consensus mechanism is used to determine which state of the database is chosen to be valid and true. It is only when consensus is achieved that the new transaction is recorded into the block and is linked to the already existing chain of blocks using a hash pointer to the previous block. Despite their initial success, existing blockchain technologies have gaps and limitations regarding flexibility, governance, and scalability. The aim of this research paper is to explore and review existing algorithms and mechanisms that can be deployed on open source blockchain platforms. To deploy and implement any blockchain application, various platforms such as Ethereum, Coinbase, and Embark etc. are available and widely used. In order for a researcher to choose the right blockchain architecture and consensus mechanism for implementing any given application, an in-depth knowledge of the existing state of the art is pertinent. Finally, this article discusses the benefits of blockchain technology in various real-world applications, including land records, finance, healthcare, digital scarcity, supply chain management, and food safety.