What is Blockchain? Blockchain Simplified
The history of technology is split into two parts; before the rise of Bitcoin and after it. One of the definitions popularized by this digital currency is “Blockchain”.
Blockchain is a big revolution to the world of technology which has changed all the ways of communication; From transactions to the world of games, it has changed every single pixel being used in this universe.
Moreover, people oftena get confused and misusae bitcoin and blockchain and mostly they haven’t understood the definition completely. Bonti has written this article in order to simplify the meaning of blockchain.
Blockchain is a system made of blocks filled with information in a chain that makes it impossible to hack, change or be cheated on a system.
You may ask why is it unhackable? The feature that distinguishes blockchain from the old system of recording information is ‘Decentralization’. In this technology, all the information is recorded on ledgers of every single participant called ‘node’ that every time a transaction comes to the system, it is recorded on each node’s distributed ledger; that’s why it is called DLT (Distributed Ledger Technology).
So if an interferer wants to change anything in a transaction, Not only must it change it on all the node’s ledger, but also the barter must be made on every single block of the chain which is impossible and time taking (possibly it takes years). That’s why it is more secure than a centralized recording system that can be altered (as we have seen) easily.
Why is blockchain so important these days?
From the time that the internet took over the world, It becomes the world of information. The faster and more accurate the information is received, the better.
So while the whole business is about information, why shouldn’t we use a technology which speeds up the receiving, recording and using it? But it’s not only about speed. Imagine the times that you are afraid of a hacker stealing your information no matter if it’s money or your instagram password.
While a data enters the blockchain, it is stored on immutable ledgers of its nodes which -as we mentioned above- can not be changed or is not accessible to barter.
That’s the security the world was looking for. Your information is more secure by being distributed among the ledgers so there is no chance for an interferer to change anything on a block and there is no third party involved. That’s why blockchain is becoming more in-demand every single day passing on.
Key Elements of Blockchain
Every single block is made of 3 things:
- Hash of the block
- Hash of the last block
Every blockchain contains data of transactions made by the members of that ecosystem. Each block can conclude thousands of transactions. For instance, 100 dollars sent by Allen to Molly is a transaction.
Hash of a Block
Each block is secured by a cryptographic combination of digits called hash. This hash is a result due to a complicated mathematical problem which is an Irreversible function that makes it hard to guess the input by knowing the final result. Hash is a unique set of digits which is eccentric for each block.
Hash of the last block
While a new block is getting into the blockchain, it contains the last block’s hash; because it helps the validators to understand every single change been made to the data of the last block.
So for example if you change 100 to 50 dollars in that money transfer of Allen to Molly, the hash of the block would change so there is a big difference between the hashes of two consecutive blocks which makes it easy to understand that data has been tampered by an interferer.
The blockchain technology is made to increase the speed and security of transactions, making data storages decentralized in order to omit the third party and make immutable distributed ledger. This technology is secured by a hash function which makes it unhackable.