Blockchain is actually no Rocket Science! It’s quite easy to understand when you deeply look into it. basically, we know blockchain as technology behind Cryptocurrencies, where its completely different then what it actually seems. Blockchain is beyond more than just a backbone of cryptocurrencies. A Complete solution to Digitalization.
So what is this “Blockchain” ?
the name itself comes from it how works. In Blockchain, there are two things! One is Block and another is Chain. Here DATA were stored in Blocks and connected to each other as Chain. It’s completely a digital technology, therefore, it has no physical existence.
A blockchain is basically a database that is shared across a network of computers. Once a record has been added to the chain it is very difficult to change. To ensure all the copies of the database are the same, the network makes constant checks.
It will be easier with a real-life explanation.
A step by Step Guide to Blockchain :
In Blockchain Technology things are done in 3 Steps. On Step one, It collects Records (Could be any data or information). On Step two, Those bundles of records are entered in a block. And on Final Step, After the Block is filled (as its size is pre-defined by the technology) it will be placed into the Chain. Where various NODES will Confirm its Existence. Once it’s done another new Block is generated. Which keeps on repeating for an infinite amount of time as there is no limit on how much the chain could expand. However Once a block is confirmed its almost impossible to change anything from the previous block!
Let’s say a Deal will get into Blockchain. How that’ll happen?
STEP ONE: A trade is recorded. For example, let’s say Mr. Facebook is selling two of his coins to Mr Google for $110. The record lists the details, including a digital signature from each party to keep the deal safe from any heist.
STEP TWO: The record is checked by the Blockchain network. The computers in the networks are called ‘nodes’. Nodes will check the details of the trade to make sure it is valid. Once its done it will give its affirmation saying “ok its accepted”.
STEP THREE: The records that the network accepted are added to a block. Each and every block contains a unique code called a hash. It also contains the hash of the previous block in the chain.
STEP FOUR: The block is added to the blockchain. The hash codes connect the blocks together in a specific order.
So how its difficult to change?
A hash code is created by a math function that takes digital information and generates a string of letters and numbers from it. Second, any change to the original input will generate a new hash. So if someone decided to delete just one comma from Tolstoy’s 587,287-word masterpiece, it would show up, because the hash would change.
The next block in the chain still has the old hash, so to restore the chain a hacker would have to recalculate that. And the next, and so on. Recalculating all those hashes would take an enormous amount of computing power.
The Nodes of the Network:
Blockchain technology is very different from to the Technology we are used to! Unlike traditional ledgers, a blockchain database is decentralized and has no “authority”. In Centralized hub, Owner do anything they like make any change they want or adding as many node they want. But In Blockchain every node will have access to every block entered into the block. A new Node has to be verified as trusted by other nodes as well.
Without centralized control of a network, trust is a problem. One answer is to only let people you know, such as company employees, join in. But blockchains such as the bitcoin network are open to anyone. Members are anonymous. There is no way to know if they are trustworthy.
To resolve this and build trust, these blockchains set tests for the computers that seek to join and add records to the chain. The tests are called consensus models.
The tests require network members to ‘prove’ themselves. Some examples:
PROOF OF WORK: To add a block to the chain, nodes must demonstrate that they have done ‘work’ by solving an increasingly difficult computational puzzle. This process, called mining, uses a lot of computing power. In return for their work, members can receive rewards – tokens for instance, or bitcoins.
PROOF OF STAKE: Participants buy tokens which allow them to join the network. The more tokens they have, the more they can mine.
This gives birth to these two beautiful terms that you come to know more about in coming days when you’ll be interacting with different currency!
Possible uses of Blockchain!
There is a lot of hype about blockchain, but some of the promising uses of blockchain are under development. Just remember the fact that its not just the backbone of Cryptocurrency such as Bitcoin, Ethereum or any other currency! it’s actually beyond more!
CRYPTOCURRENCY: Blockchains are the basis of bitcoin and other cryptocurrencies.
BANKING: Financial institutions have been investing in blockchains to simplify their record-keeping for payments.
SUPPLY CHAIN: Recording trades on a blockchain offers a way to check the history of a product. For example, jewelry companies hope it can assure customers that diamonds are not from places where they could finance war.
HEALTHCARE: With blockchain, medical history could be securely stored and controlled by patients.
VOTING: Blockchain records could create tamper-proof election returns.
PROPERTY RECORDS: Storing land records on a blockchain could cut down on costly title research and insurance. In politically unstable places, it could help prove ownership.
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