This type of blockchains can be considered a middle-ground for companies that are interested in the blockchain technology in general but are not comfortable with a level of control offered by public networks. Typically, they seek to incorporate blockchain into their accounting and record-keeping procedures without sacrificing autonomy and running the risk of exposing sensitive data to the public internet.
Anyway, new blocks do not appear on the blockchain all of a sudden – the network must achieve consensus. In other words, each transaction must be validated by the rest of the network members, so-called “nodes.” Their contribution to the final decision on consensus is equal. Each node solves a complex cryptographic problem, and when a solution is found a new block appears on the blockchain. Such algorithm is called “proof-of-work consensus protocol.”
A federation is a group of servers that act as an in-between point between the main chain and a sidechain. The Federation decides when the user’s coins are locked as well as when they are released. The developers of the sidechains can choose the members of the federation. The downside to using federations is that they add another layer between the sidechains and the parent chain.
A sidechain is a separate blockchain that is attached to its parent blockchain using a two-way peg. The two-way peg enables interchangeability of assets at a predetermined rate between the parent blockchain and the sidechain. The original blockchain is usually referred to as the ‘main chain’ and all additional blockchains are referred to as ‘sidechains’. The blockchain platform Ardor refers to its sidechains as ‘childchains’.
The top 10 Ethereum decentralized apps (DApps) have daily active user counts in the thousands. Compare this with a centralized platform like Facebook, which has over a billion daily users, and you can see just how small scale blockchain use still remains. For a detailed comparison, read “State of the DApps: 5 Observations From Usage Data (April 2018)”.
External Account, which stores ETH balance – This contains the address of the User that was created using the Web3.js API, e,g, personal.newAccount(…). These accounts are used for executing smart contract transactions. ETH is your incentive received for using your account to mine transactions. The address of the account is the public key, and the password of the account is the private key.
^ Jump up to: a b c d Bhaskar, Nirupama Devi; Chuen, David Lee Kuo (2015). "3 – Bitcoin Mining Technology". In Cheun, David Lee Kuo. Handbook of Digital Currency: Bitcoin, Innovation, Financial Instruments, and Big Data. Academic Press. pp. 47–51. ISBN 978-0-12-802117-0. Archived from the original on 25 October 2016. Retrieved 2 December 2016 – via ScienceDirect.
People believe that permissioned means that only a select group of people can access the data and that’s the security feature. But it’s not. Since there is no real user data on the blockchain, (you) as a member of the public, can’t verify the actual content of it. This means that data resides in a location where corruption can stay undetected and data can be easily modified. So why does it even exist? Mainly because of the phenomena known as “hype surfing”; essentially reusing old technology and strapping a blockchain sticker on it gets IBM salesmen a foot in the door to institutions who can’t evaluate the technology accurately in the first place. Unfortunately, even some teams doing public token offerings started to sell this deeply flawed approach to the public.
Imagine over several hours, the camps produced a chain of messages that each required intensive Proof of Work. This means that the majority of the camps had to agree on this chain of messages and each camp can confidently trust the final outcome. It’s important to note here that Proof of Work does not care about the message itself, only that the nodes agreed to the final message. This majority network consensus keeps it secure and provides a solution to the Byzantine Generals Problem, leading to Byzantine Fault Tolerance.