The National Institute of Standards and Technology (NIST) has recently provided a draft of their report on Blockchain Technology. The report gives the reader an understanding of Blockchain from a simplified technical standpoint and then goes into how this technology is being used right now and how it can be used it progresses further.
The report aims to make sure that people can understand the fundamentals of the blockchain, it’s inner workings and the applicability of it in the present world. The idea is that if more understand how they can use it for problems that they are facing, there can be further development and utilization of the technology.
NIST and why it matters
The organization is one to pay attention to because the sole reason for its existence is to be a measurement standards laboratory and a non-regulatory agency of the United States Department of Commerce. They work to meet and further their mission of promoting innovation and industrial competitiveness. The report then carries a sense of credibility because of the organization and the work it seeks to accomplish on a regular basis. The agency continues to research various emerging technologies like nanotechnology, information technology, neutron research, sustainable energy and so much more. The organization summed up in a sentence is to “MEASURE. INNOVATE. LEAD. Working with industry and science to advance innovation and improve quality of life.”
The organization, its research and its thoughts on the matter have an impact on both the private and public sectors, it can provide suggestions to both areas on the utility and practicality of the technology and how to progress in investment and regulation on the matter.
The Overview of the architecture of cryptocurrency
The report states what the blockchain is and why it matters and then it goes onto note one of the applications of distributed ledger system.
The store of value
“These currency blockchain systems are novel in that they store value, not just information. The value is attached to a digital wallet—an electronic device (or software) that allows an individual to make electronic transactions. The wallets are used to sign transactions sent from one wallet to another, recording the transferred value publicly, allowing all participants of the network to independently verify the validity of the transactions. Each participant can keep a full record of all transactions, making the network resilient to attempts to alter that record (or forge transactions) later.”
The authors go on to state the blockchain is not magical and will not solve all problems and might not be able to be applied to every industry. They further go into the different aspects of businesses and how a business should consider if the blockchain is for them or not as there are potential use cases but also difficulties that have to be taken into account before any large-scale implementation.
Common Characteristics of Blockchains
Another fundamental concept that was present in the draft was that of the fact of the commonalities that are present with each blockchain.
Each transaction involves one or more addresses and a recording of what happened, and it is digitally signed. Blockchains are comprised of blocks, each block being a group of transactions. All the transactions in a block are grouped together along with a cryptographic hash of the previous block. Finally, a new hash is created for the current block’s header to be recorded within the block data itself as well as within the next block. Over time, each block is then chained to the previous block in the chain by adding the hash of the previous block to the header of the current block.”
The report goes further into other blockchains and quantum computing, the aspects of smart contracts, blockchain platforms and limitations, and finally, it’s conclusion. The report goes in depth and provides a solid overview of the necessary fundamentals and more of this emerging technology.