What is Blockchain? | Details | Information
What is Blockchain? Details may be You are Looking For in 2022
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| Illustrated image showing chains of Blocks. This image describes the concept of Blockchains. |
Definition:
The data is distributed and duplicated to all nodes participating in the same chain of blocks. Each block contains a number of transactions. Each time a new transaction is made the data is stored in every participant's ledger.
Cryptographic Hash:
A cryptographic hash is a mathematical method that maps arbitrary size data to a bit array ( An array that compactly stores bits) of a fixed size.
Distributed Ledger Technology:
A shared ledger or distributed ledger is a unity of synchronized, replicated, and shared data spread across multiple sites, Institutes, Countries, or maybe across the public. it is also known as replicated journal technology RJD. There are no central administrators like in centralized systems.
For this technology peer-to-peer network and harmony are required as all the data must be replicated to all systems in the DLT. Blockchain is the one form of Distributed Ledger
How does a transaction get into a Blockchain:
- Authenticating Identity: There is no central administrator but still, authentication of transactions is required and this is done by cryptographic keys (a string of data). Each person has a private key and a public key. Both of them together create an identity. Via signatures, this identity is authenticated and then the transaction can be done.
- Authorization: After authenticating the identity now the approval is required for the transaction to be added in Block. Here in a decentralized system decisions are made by participant nodes of the same chain of blocks unitedly. The majority of nodes should agree on transactions.
- Proof of Work: Users with computers lead to verify the transaction (authorization). To add a block they need to solve complex mathematical problems. ( This process is known as Mining. and the users doing it are known as Miners) Miners are rewarded for this but mining is not an easy task at all. Heavy energy and good computer is needed to do this which make this work very costly.
- Proof of Work Problem: Mining is not easy for a single user so users do mining now as a group like companies and put their resources together. the growth of Blockchain is also increasing the number of miners and securing the Blockchain as increasing Blocks in the chain. However, those miners with high servers and vast sources of energy have a great impact on Blockchains. those Blockchains which are made on Proof of work now need these organizations to be maintained and grow.
- Proof of Skate: you see there is a problem in Proof of Work so that is why later on blockchains have adapted Proof of skate where you need to have some stake in Blockchain, like having cryptocurrency. to have transactions. thus mining is not required here. Blockchains have been evolving to include smart contracts so, transactions execute after meeting certain conditions.
Blockchain And Bitcoin History:
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| Coins with logos of cryptocurrencies |
A Blockchain like protocol was first proposed by David Chaum in 1982 in his thesis "Computer Systems Established, Maintained and Trusted by Mutually Suspicious Groups".
In 1991 Stuart Haber and W. Scott Stornetta described a cryptographically secured chain of blocks. They want a system where Documents Timestamps could not be tampered with.
Both of them and Dave Bayer included Markle Trees in the design which allowed document certificates to be collected into one Block.
Satoshi Nakamoto developed a thought of the decentralized Blockchain in 2008. Nakamoto used a Hash Cash (Proof of Work system) like the method to timestamp Blocks without the need for them to be signed by a third party (trusted party) and to stabilize the rate at which Blocks are added to the chain Nakamoto introduced a difficult parameter. The following year Nakamoto implemented the design as the core component of Bitcoin.
FUN FACT: In Satoshi Nakamoto's original papers the words Block and Chain were used separately but popularized as single.
Difference between Blockchain and Bitcoin:
Bitcoin is the Cryptocurrency and Blockchain underpins Cryptocurrency. Bitcoin is not the only digital currency of Blockchain Distributed Ledger Technology. There are many different cryptocurrencies in the market with different Blockchains.
Private BlockChain VS Public Blockchain:
In private Blockchains everyone can enter into the chain as it is open so, any node can join but oppositely in private Blockchains nodes need to be get approved.
Security in Blockchain:
Blockchain systems have decentralization which means there is no third party involved in the transaction of data. New blocks are added day by day to previous blocks in the chain and every new block is added to the end because it has the hash of itself as well the hash of the previous block It is very difficult to alter or change the block once added into the chain. so, this all thing make difficulties for hackers as if they change their copy then it will be no longer align with other copies.So, if a hacker wants to succeed he needs to change many copies in the chain to do so which makes this job really impossible as well as very costly too. Thus, you can say that a decentralized system has made blockchain quite secure.
Transparency in the Blockchains:
Advantages of Blockchains:
- Accuracy: Transaction on blockchains is highly accurate because it has to be approved by thousands of nodes.
- Cheap: IT makes transactions cheaper than any bank can offer.
- Decentralized: there is no third-party involvement which is making it highly secure.
- Fast Transactions: Transactions made here are really fast as compared to transactions made by a central authority.
- Secure transactions: once the transaction is made its authentication is checked by thousands of nodes in the chain.
Conclusion:
Khurram Shabir
i am a blogger and write articles on technology topics.