Blockchain — What is it? How is it useful?
Unaware of what it is, I just heard it a few times but never understood or researched it until today, well now I have a good view of What? How? Why? When? to use blockchains, yet there’s a lot to learn…
What is Blockchain in simple words?
A blockchain is a digital record of transactions. The name comes from its structure, in which individual records, called blocks, are linked together in a single list, called a chain. Blockchains are used for recording transactions made with cryptocurrencies, such as Bitcoin, and have many other applications.
They are digital timestamps.
Where is Blockchain used?
In 2009 the concept was used by Satoshi Nakatomo to create Bitcoin.
Cryptocurrencies? Bitcoin?
Cryptocurrencies are a form of digital or virtual currencies built on the concept of blockchain.
Cryptocurrencies — immune to counterfeiting, don’t require a central authority, and are protected by complex algorithms.
In the world of cryptocurrencies, bitcoin ranks the highest.
What does each Block consist of?
It has three faces — Data, Hash, and Hash of the previous block.
Data consists of information from whom the transaction was made, to whom the transaction was made to, the amount of transaction.
Hash is like a fingerprint, unique it identifies the block and the contents. If the content is changed inside the block, the hash is also changed.
Hash of previous blocks creates the chain, which makes chains secure.
The 1st block is the genesis block. If the middle block is changed, the hash also changes, and thus we cannot move forward to another block as the content of the next block doesn’t contain the hash of the changed block.
The blockchain has been described as “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.
The miners validate the blocks and add them to the blockchain.
Hashes can be tampered with or hacked, so we use new mechanism known as proof-of-work, this mechanism makes it difficult to tamper or hack the blocks.
It can be also secured by the p2p network, which creates consensus to check which blocks are valid and which are not in the network where the blocks are continuously added.
Blockchains are used in medical records and in collecting taxes.
Lastly, blockchain plays a very important role even during a pandemic: read the following article by Springer.
For now, that’s all…
Thank You 😊
Liked by Prof. Dr. Anirban Das (fortunate me).