Blockchain Explained


Blockchain Concept Explained : Learn Like a Beginner

If you are associated with investing, banking or cryptocurrency, blockchain software might be a quite familiar term to you. Blockchain might seem complex, but the core concept is simple. The simplest way to understand blockchain technology is that it is a structure that stores transactional records.

Blockchain explained:

1. What is blockchain?

Blockchain is a type of database that records information by creating blocks in a way that makes it difficult or impossible to change, hack, or cheat the system.

A blockchain is a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain platform. Every block contains multiple transactions, and when a new transaction is performed, a new block is created. The record of that transaction is added to every participant's ledger. Since it is a decentralised database, it cannot be managed by a single entity. Instead, multiple participants, known as Distributed Ledger Technology (DLT) manage it.

2. The History of Blockchain:

In the late 90s and early 20s, there was a great rise of digital currencies based on cryptographic concepts. And the first blockchain like initiatives was taken by Nick Szabo in 1998 mechanism known as bit gold. However, it was not typically a blockchain, a series of cryptographic puzzles were added next to next to form a chain. The actual blockchain was first developed in 2008 by someone under the pseudonym of Satoshi Nakamoto.

3. The uses of blockchain:

The simplest aim of blockchain is to store data. However, it turns out that blockchain is a transparent way of storing data about other types of transactions as well. It is now a great alternative to traditional centralised banking and transaction methods and has completely changed the way of conventional transaction. Implementing blockchain can also change the way you run your business.

Every transaction that occurs in blockchain has to be authorised and authenticated. The transactions must meet certain conditions or go through a few steps to be added to the blockchain. The presence of blockchain is everywhere, and its importance is undeniable in cases of blockchain and cryptography or blockchain and mining.

Smart Contracts:

Blockchain contracts explained –

A smart contract is a self-automated contract that involves an agreement between a buyer and a seller without any intermediate. The agreement is directly written into lines of codes that are executed on the decentralized platform of blockchain.

Being a decentralised platform, blockchain does not allow any single entity to control it. And when smart contracts are written on the blockchain, it becomes almost impossible to hack the contracts. If the hackers want to hack the contract, they would need more than half of the nodes, and they have to continue changing each block designed afterwards, which is practically impossible.

Since all data in the blockchain is immutable and secure, it creates the perfect environment for smart contracts. The data of smart contracts is encrypted and exist on a ledger. That means the data and information recorded in the blocks will never be lost or deleted.

Blockchain Cryptography:

Blockchain cryptography explained -

After the extreme popularity of Bitcoin, the most well-known cryptocurrency so far, cryptocurrency took the top rank on Google search of 2018. Blockchain is the platform upon which Bitcoin is built. Unlike depending on centralised systems, like cloud storage or banks, blockchain is a decentralised system that leverages a distributed ledger of record keeping. In short, blockchain is just perfect for cryptocurrency because it is decentralised, distributed, consensus-based, and most importantly, secured by cryptography. Now, the question is what cryptography is. Well, if blockchain is the skeletal system, cryptography is its nervous system. With the help of cryptography, cryptocurrency can be exchanged securely throughout a broad network. When a transaction occurs on a blockchain platform, it becomes visible to everyone but cannot be changed or edited.

The uses of blockchain:

The simplest aim of blockchain is to store data. However, it turns out that blockchain is a transparent way of storing data about other types of transactions as well. It is now a great alternative to traditional centralised banking and transaction methods and has completely changed the way of conventional transaction. Implementing blockchain can also change the way you run your business.

In early 2009, the bitcoin network was first launched, and they were first used by a team of cryptographers and hobbyists. With the popularity of bitcoin, other cryptocurrencies, including Peercoin and Litecoin were developed. These cryptocurrencies also use blockchain technology.

In 2015, Ethereum was launched as a distributed computing platform. It enacts smart contracts between two parties and enables users to develop apps. With the introduction of Ethereum, blockchain technology got extreme popularity. Blockchain technology is now used in almost every sector, from the government sectors, major companies to the public sector.

Blockchain mining:

Blockchain mining explained –

Blockchain mining is a peer-to-peer computer process that is used to verify bitcoin transaction and ensure its security. The miners use blockchain to add bitcoin transaction data to the past transactions of bitcoin’s global public ledger.

The term blockchain mining is actually used to describe the process of adding transaction records to the bitcoin blockchain. It depends on the process of the transactions and how secure it is on bitcoins. The community of people who perform blockchain mining are known as blockchain miners.

How does blockchain transaction work?

Nowadays, businesses around the world are integrating blockchain to witness a major change in their business. But how does blockchain software work? Is it a simple addition or a major change? Is blockchain transaction safe? These are the most common queries you might often face. Though the potential of blockchain is proven, this technology is still too young to be understood.

 

The blockchain transaction works in the following ways –

  •   A person requests a transaction that involves contracts, cryptocurrency, records, contracts or other information.
  •  Once the request is made, it uses the nodes to broadcast the transaction to a peer-to-peer network.
  •  Then the network of nodes verifies and validates the user status and the transaction by using algorithms.
  •  After the transaction is made, a new block is created and added to the chain with the existing ones.

This way, every transaction in the blockchain is reliable and highly transparent, and it is almost impossible to hack the data or transaction.

We are attempting to create the largest database of information on blockchain found on the internet. One block at a time.

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