Blockchain Basic Questions

Question

1.  How are transactions clubbed in a blockchain?  Are they heterogenous or homogenous? I reckon in Bitcoin, that it is related to homogenous transactions ie: transactions in Bitcoin.  However in Businesses, there are variety of activities.  Do these independant activities have independant blockchains? Ex: HR records have separate blockchain and Sales have their separate blockchain and have their own genesis block.   
 
If Yes, then how will transactions be linked to different blockchains? Ex: Sales commission paid to particular employee (HR blockchain) on achieving his targets (Sales blockchain) since they traverse through different blockchains.  

If No, that is the whole organisation has only one blockchain, how is audit trail of a particular record maintained as all the transactions are mixed up in a single blockchain?

This concept is not yet clear to me.

2.  Can different blockchains interact with each other worldwide even if they are not following the same protocols / consensus algorithm?  Ex: Can a corporate's blockchain get permissioned access to say, a Bank's blockchain to read only access to that corporate's account.

3.  What are digital tokens vis-a-vis cryptocurrency?  

4.  What is meaning of tokenised data exchange? How can tokens be used in business? Can it be used to incentivise anyone in anyway?

5.  I think the Consensus Algorithm (CA) is the most important concept in Blockchain.  When blockchain gets widespread adoption, in what ways will it be regulated by the Government?  Ex: the Government will not accept your data if your CA does not follow their guidelines.

6.  Will the blockchain be trustless, if CA is buggy, or too few nodes or for any other reason?  Is there a standard blockchain guideline in order for it to be trustworthy?

7.  From my understanding upto now, transactions are clubbed in a block and then the block is hashed, this block's hash also forms part of the next block's header to maintain a chain.  However, how is a transaction within the block linked to a transaction in another block to maintain an audit trail?  Ex: A sell property to B, after two years B sells that property to C.  Here each transaction occurs in different blocks in a blockchain.  If C wants to check whether B is rightful owner and sends a query, will "property id" or Master Key be scanned throughout the blockchain? 

8.  Is hash the data itself?  A transaction is hashed to be included in a block.  The input data to output hash is deterministic but we cannot reverse the same.  Output hash cannot be converted to input data.  So how will retrieval of data work? I am missing something.

9.  Is smart contract a result of advent of blockchain? Or did it exist even before but because of Blockchain's trust, it gained popularity?

Answer 1

Hey, @Nikhil 

1. A type of distributed ledger database which is constructed by clubbing various transactions into blocks. These blocks are maintained in chronological fashion while making use of security mechanisms which help in protection against fraudulent attacks.

2. One project that is aiming to solve this interoperability problem is Cosmos. It aims to become an “internet of blockchains” which is going to solve these problems once and for all. Cosmos’s architecture consists of several independent blockchains called “Zones” attached to a central blockchain called “Hub”.

3.  A digital token works in the same way. It represents a specific amount of digital resources you can own, assign to another, or redeem later. Digital tokens are either intrinsic or created by software and assigned a certain utility.

4. Tokenization is the process of turning a meaningful piece of data, such as an account number, into a random string of characters called a token that has no meaningful value if breached. Tokens serve as a reference to the original data, but cannot be used to guess those values. Tokenization is a superior solution. With it, you can protect the data of your company and your customers without sacrificing its utility or the agility of your current business processes—all while securely storing the original, sensitive data outside of your internal systems or data environment

5. A consensus algorithm is a procedure through which all the peers of the Blockchain network reach a common agreement about the present state of the distributed ledger. ... Thus, a consensus algorithm aims at finding a common agreement that is a win for the entire network. Consensus algorithms are primarily used to achieve reliability in a network involving multiple distributed nodes that contain the same information.

6. A blockchain, as the name implies, is a chain of digital “blocks” that contain records of transactions. Each block is connected to all the blocks before and after it. ... The records on a blockchain are secured through cryptography.

8. go through this: https://www.edureka.co/community/7814/how-to-retrieve-data-from-a-block-to-a-blockchain

9. A smart contract is a set of executable code that runs on top of the blockchain that facilitates, executes, and enforces an agreement between untrusted parties, without the need of a trusted third party. In order to be developed and deployed, smart contracts require a blockchain platform.

Hope these information helps.

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Thanks.