Having accurate information and a way to verify the source of things when you are dealing in a situation of transactions of value is essential. You need to have reliable systems that you can trust, which are tampered proof. But in a world what you are dealing with are internet frauds, malware, hacks of institutions like banks or organizations or internet service provider are getting cyber hacked.
How can you trust the quality and integrity of the information you are getting? So to tackle this problem a technology called Blockchain technology was developed which can help us to get rid of all this.
What is Blockchain Technology?
Blockchain technology is a constantly growing ledger that keeps a permanent record of all the transactions that have taken place, in a secure, chronological and immutable way. It can provide a single source of truth that is verified, tamper-proof, and unchangeable. They are decentralized networks, it means that there’s no single person or group in authority of the overall network.
History of Blockchain technology:-
The Blockchain technology was first described in 1991 by Stuart Haber and W. Scott Stornetta. They thought of making a system where document timestamp could not be tampered or backdated. In 1992, they implemented the concept of the hash tree which made it more efficient by storing each document into a block. A hash tree/Merkle tree is a tree in which every leaf node is labeled with the hash of a data block and every non-leaf node is labeled with the cryptographic hash of the labels of its child nodes.
Satoshi Nakamoto was the first to adopt the concept of blockchain in 2008. He improved the design by using the concept “hash method” to add blocks to the chain without requiring them to be signed by a trusted party.
How does blockchain works?
Blockchain technology is a chain of the block that contains information. The data stored in the block depends on the type of the blockchain. Each block contains a unique code i.e. hash. Hash is basically a digital fingerprint of a certain amount of data. It is an amount of data alphanumerically in a certain length. If anyone wants to change the data inside the block, the hash of the block will be changed, which is not valid. It also contains the hash of the previous block, which effectively creates a chain of blocks. And this makes it more secure. It also overcomes the double spending process.
If you consider a chain of 3 blocks. Each block contains the hash and hash of the previous block. Third block point the hash of the second block and similarly the second block contain the hash of the first block. But the first block is a special block because it cannot contains the hash of the previous block as it is the first block. So it is called the Genesis block.
If someone tries to tamper the second block, the hash of the second block is changed, which in turns makes the third block and all the following blocks invalid because they no longer store the hash of the previous blocks. So by changing a single block, it will make all the following block invalid. But only by using hashes is not possible to prevent data tampering.
Nowadays computers are very fast that they can calculate thousands of hashes per second. You could effectively tamper with the blocks and recalculate all the hashes to make the chain valid again. So to overcome this problem it has a property called Proof-of-work. It is the process of making a new block slow. In the case of bitcoin, it takes 10 minutes to calculate the proof of work and add a new block to the chain. This process makes it very difficult to tamper with the blocks because if you tamper with one block, you have to recalculate the proof of work for all following blocks. So the security of it is due to its creation of using hashes and proof-of-work process.
It also has the ability to make itself secure .i.e. by distribution. Instead of using a centralized entity to manage blockchain uses the peer-to-peer network and everyone is allowed to join. When a person joins the blockchain network, he/she gets the full copy of it. They can use this to check whether the chain is in order or not. Whenever a new block is added, it is sent to everyone on the network. Then each person/node on the network verifies that the block has tampered or not. If everything is okay then they added the block to their chain and the process goes on.
To get a better understanding of the blockchain technology concept.
Please visit: https://anders.com/blockchain/blockchain.html
Types of Blockchain technology:-
- Public Blockchain:-
The chain in which anyone can participate is called public blockchain because it is an open source where no one is in charge and there is no rights and management.
- Private Blockchain:-
The chain in which only the owner/organization can participate is called private fingerprint. It is the opposite of public blockchain. The information available in blockchain are not available in private blockchain.
- Consortium Blockchain:-
The chain which operates on the leadership of a group, anyone with an internet connection cannot become a participant. The consensus process is controlled by a pre-selected set of nodes.
Though Bitcoins and other cryptocurrencies are the first and popular application of Blockchain technology, they are not the only ones.
This technology can be applied in various other sectors. And this nature of the technology has inspired people from all around the world to explore the technology’s potential and make revolutionary changes and apply it to various other sectors.
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