Since 2008, when the term bitcoin was coined by Satoshi Nakamoto as a novel electronic and completely peer-to-peer cash system free of trusted third party, the interest in the bitcoin and blockchain technology has increased. Recognizing it as a revolutionizing technology across the industries, especially in banking and finance, in terms of transactions and their privacy and security, researchers are not leaving any stone unturned to come up with exotic protocols with each passing day and each is the newer, advancer and better protocol than the previous. In continuation to the blockchain series on TheBlockchainAcademy.com, I have included 6 major blockchain protocols, so as to embrace the technology and increase awareness among investors and end users of blockchain.
The starting of the bitcoin dates back to November 2008, when a thesis had been posted by Nakamoto on a US mailing list where the cryptographers share or exchange information. The thesis titled “Bitcoin: A peer-to-peer electronic cash system”, presented the following characteristics of this protocol:
- Enables transaction directly with no need of any trusted third party
- Enables the non-reversible transactions
- Decreases credit cost in minor casual transactions
- Decreases transaction fees
- Prevents double-spending
Bitcoins are virtual currency, also called cryptocurrency. These are distributed while exploring the value in the data managed by software. The start of 2016 witnessed the issuance of around 15.26 million BTC, equivalent to around 7 billion US Dollars. Major technologies that make Bitcoin include hash, digital signature, public-key cryptography, P2P and Proof of Work. This blend has developed a mechanism that prevents duplication of payments and data falsification, additioinally a mechanism that prevents malicious users, which are critical for the operating system like the one for the electronic money, having no central authority.
Ethereum is a public, open-source and block chain oriented distributed computing protocol that features smart contracts (scripting) functionality. The protocol has provided a decentralized virtual machine called the Ethereum Virtual Machine (EVM), which carried out Turning-complete scripts by using a global network of public nodes and the token called ether, also referred to as gas. Gas is used for preventing the spam on networks and allocating the resources in proportion to the incentive provided by the request. Bloomberg explains Ethereum as shared software that is used by all; however, is tamperproof. Ethereum is also used as a protocol for decentralized applications, smart contracts and decentralized autonomous organizations, with a number of functioning applications developed on it by March 2016, New York Times says.
Ripple Consensus Network
The Ripple Transaction Protocol (RTXP), issued in 2012, has been developed upon an open-source distributed consensus ledger, Internet protocol, and native currency termed as XRP (ripples). Ripple enables instant, safe and almost free global financial transactions of any scale without any chargeback. The protocol is embraced being able to support tokens presenting cryptocurrency, fiat currency, commodity and any other value unit like mobile minutes, frequent flier miles etc. By the end of 2017, Ripple is expected to be the third-biggest cryptocurrency in terms of market capitalization, after the bitcoin and ethereum.
Hyperledger is the open source blockchain platform, began in 2015 by the Linux Foundation, in an effort to support the blockchain-based distributed ledgers. The protocol focuses ledgers developed to support international business transactions, catering leading financial, technological and supply chain businesses, with the objective of improving a lot of performance and reliability aspects. The project emphasizes on making collaborative efforts for making open standards and protocols, by offering a modular framework that backs various components for diverse uses, including a range of blockchains having their own storage and consensus models, and the services for access control, contracts and identity.
Corda by the Company R3 is the distributed ledger protocol that has been developed from the ground up for recording, supervising and synchronizing the financial agreements among regulated financial institutions. It is, by great deal, stimulated by, and captures the advantages of blockchain systems, with no design choices that turn blockchains unsuitable for a lot of banking scenarios. Corda’s design came up as a result of heavy analysis and prototyping with team members. It is now an open sourced protocol since the code matured further.
Symbiont Distributed ledger
This protocol was announced in October 2016 as a software development kit for the Assembly, which is the permitted distributed ledger part of Symbiont’s smart contracts system. Assembly is considered as the first distributed ledger suitable for institutional finance. It is a greatly secure, high performing Byzantine fault-tolerant distributed ledger, which can process a sustained 80,000 transactions every second in a local multi-node network. As stated by Co-founder of Symbiont, decentralized systems should no longer be slow and with Assembly, it has been fulfilled.