What is Blockchain? | How does Blockchain works?
Nowadays, you will see everyone talking about bitcoin and blockchain. But the biggest question is whether all know the meaning of blockchain or what is blockchain.
Some of them are thinking that these two things are same but they actually not. Both are different from each other.
Usually we don’t shy away from talking about it, whether we are deeply aware of it or not. Well, I will make sure that you will fully aware of blockchain and bitcoin after reading this article on blockchain.
Block chain became popular only after the popularity of bitcoin. Because people wanted to know the technology behind bitcoin.
Therefore, it is your responsibility to learn this evolving technology and prepare for the future. If you are not familiar with blockchain, then this is the right platform to gain a solid basic knowledge.
In this article, you will learn what blockchain technology is?, how it works?, why it is so important and popular today?
Meaning of block chain | what is meaning of blockchain?
In the past few years, you have been hearing the term “blockchain technology”, and it may be about cryptocurrencies like Bitcoin.
It is necessary to understand what the blockchain is, the technology used, how it works, and how it becomes popular in the digital world.
The meaning of block chain is chain of the blocks which have some specific information or data.
But do you want to know what is the technology behind Bitcoin? | what is block chain? | Difference between bitcoin and blockchain.
Before understanding blockchain, you should clear about that blockchain technology and Bitcoin are two different terms. That is, both are completely different.
Block chain is basically a kind of technique or data base , a kind of platform or a ledger to store information, where not only digital currency, but anything can be digitized and keep records. This technology stores the data in a decentralised manner on the node computers. Decentralised means that there will be no central authority to control the entire data and information.
Every transaction in this ledger is authorized by the owner’s digital signature, and the owner authenticates the transaction and prevents it from being tampered with. Therefore, the information contained in the digital ledger is highly secure.
Blockchain can be defined as a decentralized data ledger for secure sharing.
Do you know what is a ledger?
A digital ledger is like a Google spreadsheet, shared among multiple computers on the network, and stores transaction or data. The interesting point is that anyone can see the data, but they cannot destroy it.
Bitcoin
On the other hand bitcoin is digital currency, based on blockchain technology. Bitcoin utilize the blockchain technology to kept records of its transations over the network.
Hope you now understand the difference between blockchain and bitcoin.
What is blockchain technology in simple words? | How does block chain works?
Basically block chain is a collection of information or data that means data base. Where data is organized in such a way that data can be easily excess by every one and filtering and searching of the data in block chain is very easy.
Blockchain is a system of recording information in a way that it makes difficult or impossible to change, hack, or deceive the system.
It is a records of series of transactions over entire network of computer in a decentralised manner on the block chain.
It is not managed by a central organization, it is jointly managed and operated by a computer network, called nodes. They allow the block chain run on the network.
There are many computers connected on the network and each computer having all the information of the blockchain. Which are called as nodes and established a peer to peer connection. These nodes verifies the changes on the blockchain is authorized or not.
The most unique point in this regard is that if you want to change the data in any block or if you try to tamper with the data, the fingerprint or hash value of the block will change.
Block chain grant permission to the user to distribute and record but it does not give permission to edit the recorded information.
Therefore, it is almost impossible to change or tamper with the data in the blockchain. Because once a block is defined and becomes part of the blockchain. It cannot be changed later.
Why this technology is called block chain?
Writing down something on paper is a way to store information. Where you structure your information in the form of words, tables or diagrams.
Similarly, in a Block chain technology, the information is structured in the forms of blocks. It is a series of block which are containing the information in it. which are linked together using cryptography. They have limited storage.
The series of these blocks one after the other.
Each block is made up of three main things. Which are:
1. Data or information you store in the block.
2. Cryptographic Hash of the block.
3. Cryptographic Hash of the previous block.
What is hash?
Hash is string of numbers and letters. Hash is generated after every transactions. It not only depends on the transaction but also depends on the hash of the earlier transaction in block chain. It provides a output of fix length. It works as a fingerprint to identify the block.
Therefore, it is almost impossible to change or tamper with the data in the blockchain. Because once a block is defined and becomes part of the blockchain. It cannot be changed later.
Who Invented Blockchain Technology?
Block chain technology was firstly introduced in 1991 by the two persons Stuart Haber and W. Scott Stornetta. The are they inventer of block chain.
Why is Blockchain Popular?
In technical word, the blockchain is a digital ledger that has received a lot of attention. But why has it become so popular? Well, let’s delve into the whole concept.
Suppose you want to transfer money from your bank account to family or friends. You will log in to online banking and use their account to transfer the amount to others. After the transaction is completed, your bank will update the transaction record. It looks like a simple process but Most of us have overlooked a problem in it.
These types of transactions can be tampered. People are cautious about using these types of transactions. But this loophole is essentially the reason for the birth of blockchain technology.
Recording and storing data and transactions is a key part of the business. This information is processed internally or passed through a third party (such as a broker, banker or lawyer), which increases time and cost. Blockchain avoids this long process and promotes faster movement of transactions, and save time and money.
How does block chain works? What are the important elements of block chain?
Block chain is spread on the many computer on the network and every computer is having one copy of the block chain. These computers are called nodes.
They forms the infrastructure of the block chain and collect, store, spread and preserve the block chain data.
Nodes have the full copy of the entire transaction.
These node check the hash of the transaction to verify the transaction ans detect the temper on the transaction.
If majority of notes approve a transaction then that transaction is store in a block.
The block chain updates itself in every 10 minutes.
What is the Transaction process in block chain?
One of the main characteristics of blockchain technology is the way it verified and make transactions. For example, if two people want to conduct a transaction with a private key and a public key respectively, the first party attaches the business information to the public key of the second party. All this information is contained in one block.
The block contains digital signature, timestamp and other important, relevant information. Block does not contains the identities of the user. This block is then passed to all the nodes in the network, and when the right person uses his private key and sets it with the block, the transaction completes successfully.
How is Blockchain useful to us?
There are various sector where block chain is useful to us. However, first let’s talk about what we can change by using blockchain technology.
Blockchain technology could have a significant impact on the banking industry. The banking industry typically looks at several things, such as identity theft and cost efficiency. By using blockchain technology, it can be secure and low cost.
In medical field
With the help of blockchain technology we can secure medical data of a patient.
in election
Using blockchain technology, the entire voting process can be encrypted and transparent. Combine the convenience of digital voting with an approved modification of the blockchain to eliminate problems such as repeat voting, altered voting, and disabled voting. Blockchain can be use for secure election.
In banking
Secure transaction in banking.
In cybersecurity
The technology has features that support decentralized network security, encryption security, and anti-corruption. Strict encryption and data transfer protocols on single-tier networks ensure data security and integrity and avoid hackers.
In smart contact
Blockchain-based smart contracts run on computerized transaction protocols and managed by multiple nodes connected to a blockchain network. Because a blockchain contract operates in a decentralized system among all licensees, it can be executed and maintained on its own without intermediaries such as lawyers.
The above are just a few of the many specific applications that are being developed and adapted to blockchain technology.
You can also create NFT on the block chain. Learn more about NFT.
Advantages of block chain:
Blockchain is an evolving technology that has many advantages in the digital world. Blockchain technology has had a huge impact on today life.
Highly safe and secure
It uses a digital signature function to conduct fraud-free transactions, so that other users cannot destroy or change personal data without a specific digital signature. Reduce the risks associated with cybercrime, fraud and intrusion. More transparent processes by creating and tracking accurate records. Data cannot be tempered.
Decentralized system
It is decentralized. Generally, you need to obtain the approval of the government or bank and other regulatory agencies to conduct transactions. Blockchain completes transactions under mutual consent among users, making transactions smoother, safer, and faster. Highly secure cryptographic and decentralized Blockchain protocols.
Due to its decentralized nature, it is very useful to develop Web 3.0, which is the future of the internet.
Automation capability
It can be configured and can perform system operations, events and payments when conditions are met. And can run automatically by programming it.
Disadvantages of block chain:
Blockchain consumes too much energy.
Blockchain is not a large distributed computing system.
Mining operations do not ensure network security.
Proof of work is superfluous.
blockchain is much complicate.
Have a huge network size.
Consume more memory.
Increases in transaction cost and time as increase in blockchain.
Block chain algorithm
Blockchain is a growing chain of records associated with the power of cryptography. Cryptography includes written code that allows encryption and decryption. The block algorithm is a mechanism from joining a record chain to a complete transaction verification.
Blockchain and cryptocurrency:
Most people think that blockchain and Bitcoin can be used interchangeably, but in reality they are not. Blockchain is a technology that can support various applications related to industries such as finance, supply chain, and manufacturing, while Bitcoin is a currency that relies on blockchain technology to ensure security.
Conclusion
Blockchain can create multiple processes and use a variety of methods to secure a sales contractor a transaction. A well-known example of blockchain technology is Bitcoin. The creators of blockchain are experimenting with science and many other sciences to improve blockchain success. With its success and growing use, blockchain is soon set to dominate the digital world.
