I was surfing the internet today and I saw a lot of questions popping up on this particular topic: “Blockchain Technology/Tech“. I went ahead to realize that this topic was one of the most searched topics on technology on Google and I’ve decided to write a very easy-to-get article on this topic… I call it the “Blockchain Beginner’s Guide“. If after this easy explanation you still have any questions on this topic. Please feel free to drop your comments in the comment section below. We’ll get back to you as soon as possible.
Before we begin talking on Blockchain technology itself, let’s see what Blockchain actually means…
What is “Blockchain”???
A Blockchain is simply a rising checklist of records, known as blocks, which are linked by the use of cryptography. Each block comprises a cryptographic hash of the former block, a timestamp, and transaction information (in most cases represented as a “Merkle tree”).
In this definition, there are some keywords that must have been hard to decipher like; “Blocks” and “Cryptography”. I’ll simplify it for you below;
Blocks keep batches of valid transactions which are hashed and encoded into a “Merkle tree”. Each block includes the cryptographic hash of the prior block in the Blockchain, linking the two. The linked blocks form a series. This iterative procedure confirms the integrity of the previous block, all of the as far back as the unique genesis block.
Cryptography is the study and practice of techniques for secure communication in the presence of some third parties.
Now, let’s delve further into the topic. Shall we?
What is the Blockchain Technology?.
The word “Blockchain technology” or “The Bitcoin Network” generally refers to the clear, publicly obtainable ledger that permits us to securely transfer the ownership of units of value the use of public key encryption and evidence of labor strategies.
The technology makes use of decentralized consensus to keep the network, which means that it isn’t centrally controlled through any banks, companies, or governments. In reality, the bigger the network grows and becomes increasingly more decentralized, the more protected it turns into.
The potential for Blockchain tech is not limited to bitcoin. As such, it has received a large number of attention in a lot of industries including the Deep Web.
The community makes use of allotted consensus to ensure and verify transactions, and consensus is reached by means of a large world community of high-performance computers called “miners” running the bitcoin software.
Whenever any individual sends a transaction, it’s broadcast immediately to the community/network and verified by the miners. Miners are continuously working to substantiate individual transactions and input them within the subsequent block of transactions in the chain. Once a brand new block is verified, all of the transactions inside of it are permanently recorded on the Blockchain. Rewards are paid out in bitcoin to miners who ascertain transactions and test the next block as a way to incentivize productiveness on the network.
Each party who participates in the mining process has an equivalent up-to-date copy of the Blockchain, which is a file of all of the transactions in bitcoin history. Each party’s reproduction of the ledger is updated each time a brand new block is found.
The unit of value that we send and receive on the Bitcoin network is also referred to as Bitcoins. Bitcoin is completely digital, meaning we cannot physically posses it. It’s also portable, divisible, fungible, and irreversible.
I hope that by now you have some knowledge of what the Blockchain network is all about? Now let’s go further and see what makes Blockchain so special.
What the hell makes Blockchain so special and convenient?
These properties mentioned below are what makes Blockchain so widely accepted and used all over the world. And also why it’s a threat to auction houses and any other business entity based on the market-maker principle like AirBnB, Uber and some others.
Cryptography is used to secure the Blockchain technology and that makes it tamper-proof.
Let me give you a very simple explanation.
A simple example of a centralized system is banks. They keep all your income, and the only way you can pay another individual is by going through the bank. Now, there are some “Cons/Problems” in this system which i’ll be listing below;
- If the banking centralized system were to at any time go through a software upgrade, it would halt the entire system
- Because the banking system centralized, all data are stored in one spot. This makes them an easy target for hackers and information pilferers.
- The centralized entity may somehow shut down for any reason and that way nobody will be able to access the information that it possesses.
Now, Blockchain technology has completely solved this problem by;
- Making sure the information is not stored by just one single entity.
- Every individual in the network owns all the information.
- Making sure you can compete transactions without having to go through a third-party. You alone are in charge of all your income.
Data can only be added in the Blockchain with a time-sequential order. This property shows that once data is added to the Blockchain, it is totally almost impossible to change that data and can be considered practically immutable. The reason why the Blockchain gets this very important property is that of cryptographic hash function. In simple terms, hashing means taking an input string of any length and giving out an output of a fixed length. In the context of cryptocurrencies like Bitcoin, the transactions are taken as an input and run through a hashing algorithm (Bitcoin uses SHA-256) which gives an output of a fixed length. In the case of SHA-256 like Bitcoin uses, no matter how large or little your input is, the output will always have a fixed 256-bits length.
This simply implies that a person’s identity is hidden by a very complex cryptography. I believe you all know what that word means by now. And is represented only by their public address.
So, if you were to look up an individuals transaction history, you wouldn’t see it in plain form like; “Katie sent 3 Bitcoins” instead of that you will see “3NgfEnBuTiqdTbZgeGV1DuotWksDTUd6cq sent 3 Bitcoins”.
See an example;
Consensus gives Blockchain the ability to update the ledger via consensus. This is simply what gives it the power of decentralization which has been explained above.
No central authority is in control of updating the ledger. Instead, any update made to the Blockchain is validated against very strict criteria defined by the Blockchain protocol and added to the Blockchain only after a consensus has been reached among all participating peers on the network.
Now let’s round off this topic… I hope y’all have been able to get a wide idea of what the Blockchain technology is all about.
See this quote from –Ian Khan, TEDx Speaker, Author and Technology Futurist:
“As revolutionary as it sounds, Blockchain truly is a mechanism to bring everyone to the highest degree of accountability. No more missed transactions, human or machine errors, or even an exchange that was not done with the consent of the parties involved. Above anything else, the most critical area where Blockchain helps is to guarantee the validity of a transaction by recording it not only on a main register but a connected distributed system of registers, all of which are connected through a secure validation mechanism.”
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