What is BlockChain?
Whenever we hear about the terminology “blockchain” the first question
arises in everyone’s mind that what is the blockchain and how it works and why
we need it. Let’s start by defining the blockchain.
“The blockchain is an incorruptible digital
ledger of economic transactions that can be programmed to record not just
financial transactions but virtually everything of value.”
Components of Blockchain:
To further understand the concept of blockchain we have to well aware
the main components like bitcoin, ledger, and nodes. One Bitcoin is a single unit of the Bitcoin (BTC) digital currency,
just like a Dollar it has no value by itself, it has value only because we
agree to trade goods and services in exchange for a higher amount of the
currency under our control and we believe others will do the same. The
technological innovation of Bitcoin is blockchain.
To keep track of the amount of Bitcoins each of us owns the blockchain
uses a ledger, a
digital file that keeps track of all Bitcoin transactions
The ledger file is not stored in a central entity servers, like a
bank, or in a single data center. It is distributed across the world via a
network of private computers that are both storing data and executing computations.
Each of these computers represents a “node”
of the blockchain network and has a copy of
the ledger file.
For use as a distributed ledger,
a blockchain is typically managed by a peer-to-peer network
collectively adhering to a protocol for validating new blocks. Once recorded,
the data in any given block cannot be altered retroactively without the
alteration of all subsequent blocks, which requires collusion of the network
majority. We also can say the blockchain is the networking of so-called
computing known as nodes.
How the node works along the
network is also the crucial and important aspect to be known for us. Node gets
a copy of the blockchain, which gets downloaded automatically upon joining the
blockchain network.
BlockChain in terms of security:
The most important factor in transaction of money that matters is the
trust, safety and security. The blockchain is the most protected site used for
economic purposes because of its durability and robustness. Blockchain is like
the internet that has integrated robustness by storing blocks of information
that are identical across its network. The best feature of Blockchain is that
it cannot be controlled by any single entity and has no single point of
failure.
Bitcoin was invented in 2008. Since that time, the Bitcoin blockchain
has operated without significant disruption. Since the concept of Bitcoin has
been implemented we haven’t faced a single problem problems associated with
Bitcoin due to hacking or mismanagement. The internet itself has proven to be
durable for almost 30 years.
Blockchain, a decentralized system:
The Blockchain is the vast nomenclature to learn about but the superfine
characteristic of blockchain is that it has been built in the decentralized
system. All data is not stored in one place but stored in a distributed manner.
By storing data across its network, the blockchain eliminates the risks that
come with data being held centrally. The decentralized blockchain may use ad-hoc message passing and distributed
networking. Just because it doesn’t work on
centralized network strategy so it has no central point of failure likewise
other computers that cracks the whole system only and only if their server goes
down.
By decentralizing it, blockchain makes data transparent to everyone
involved in it. Every node in
a decentralized system has a copy of the blockchain. Database reproduction
and computational trust is helpful in keeping the data quality. No centralized
"official" copy exists and no user is "trusted" more than
any other. Transactions are broadcast to the network using software. Messages
are delivered on a best-effort basis.
Growth of a decentralized blockchain is accompanied by the risk of node
centralization because the computer resources required to process larger
amounts of data become more expensive.
This picture clearly shows the meaning of these words
and also make us clear that the blockchain data in unhackable.
What is cryptography?
Blockchain security methods include the use of public-key
cryptography. A public key that is a
long, random-looking string of numbers contains an address on the blockchain.
Value tokens sent across the network are recorded as belonging to that address.
A private key is like a password that gives its owner access
to their digital assets or the means to otherwise interact with the various
capabilities that blockchains now support. This is where blockchain has its
advantage. Due to distribution of data across the network it is impossible to
hack the system because data once uploaded on Blockchain never change nor
editable. The uploaded data also cannot be deleted that becomes the plus point
of Blockchain in terms of security.
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