Welcome learners, You will now learn about the basics of Blockchain Technology and you will have an idea about how it works. You can also learn about why it is required.
Blockchain Technology is not a new Technology, but introduced by combining several existing ones, Block chain is nothing but chain of blocks connected by a key.
Blockchain Technology was introduced by a person named sathoshi nakamoto in 2008. Sathoshi Nakamoto created bitcoins with blockchain. Bitcoin is basically a digital cryptocurrency. Bitcoin works on peer to peer network, also called as distributed systems.
A blockchain is a decentralized, distributed, and oftentimes public, digital ledger consisting of records called blocks. These blocks are used to record transactions across many computers. So that any involved block cannot be altered, without the alteration of all subsequent blocks. Blockchains store data in blocks that are then chained together, hence called Blockchain.
Bitcoin is based on the ideas laid out in a 2008 whitepaper titled Bitcoin: A Peer-to-Peer Electronic Cash System. It is a decentralized digital currency that enables instant payments to anyone, anywhere in the world. It uses peer-to-peer technology to operate with no central authority.
The major concern for every individual is about security. You cannot trust a random unknown person. Because you are dealing here with transactions and you will surely have trust issues and issues about security. To provide security you can use Assymetric cryptography using public and private keys. But you can obtain trust and you cannot depend on the central authority. So that’s where the ledger came into picture. This ledger is nothing but transactions grouped together and stored.
bitcoin uses the concept of hashing. Hashing is an algorithm which generates a key. For example: md5, SHA256 etc. You will not have any problem with it because it doesn’t matter how big is your data and you will get the output of same length.(for SHA256 will get output of length 256bits.)
For every different data you will get different output. This output of your hashing algorithm is treated as a key for the data stored inside your block. The key rarely matches with other. If your key matches with key for the other data, it is called hash collision. You can create chains with the help of keys.
If you try to change even a single bit of the block, the key changes. So the key for which you changed the data will not match with the key in the next block. Hence it is not possible to change the data inside a block. This property is called immutability which means cannot be altered.
You don’t want to have central power
And You don’t want central server and don’t want to pay them charges for our transactions etc.
You also want to make it fast and without consuming much time of our busy lives.
Blockchain provides us with trust. Everything is stored inside the ledger and it is transparent.
You cannot change a block data as we discussed about the property of immutability. Hence it is safe and secure and provides us with the trust.
Because blockchain is decentralized , and it is having a property of immutability and also Trust worthy, It became a powerful Technology. You can use block chain can not only for bitcoins but also for many other applications.