Blockchain Technology

Blockchain technology was first introduced in 1991 by Stuart Haber and W. Scott Stornetta, two researchers who wanted to implement a system where document details could not be tampered with. But it wasn’t until almost two decades later, with the launch of Bitcoin in January 2009, that blockchain had its first real-world application.

Block chain technology, in simple words, is a distributed ledger that records information on digital assets. Block chain is literally a chain of blocks, but in the case of block chain network, here a block means digital information and chain refers to the public database where the information is stored.

Block chain consists of blocks that store information about the transactions like the amount of purchase, date and time etc.

Blocks also store information about who is participating in the transactions but instead of storing the actual name, the purchase is recorded in such a way that there is no identifying information using a digital signature type of username.

Blocks store information in a way that distinguishes them from other blocks. Just as each of our names distinguish us from one another, each block has a code called hash that sets it apart from other blocks.

No block can have the same hash code as another block. Hashes are cryptographic codes that are created by special algorithms.

 For example, after making your first purchase, you decide to make a second one while the first one is in transit. Now, even though the details of your purchase will look nearly identical to your previous one we can still distinguish the blocks because of their unique hash codes.

While the above example tells that block stores the details of a single purchase, the reality is different. A single block can store up to 1MB of data. That means a single block can house a few thousand transactions under one roof.

When the block stores data it is added to the end of the block chain. But for that first 4 things need to happen:

1.A transaction must occur.

2.The transaction details must be verified with information available in public platforms. In block chain this is done by a network of computers. When you make your purchase, that network of computers rushes to check that your transaction happened in the way you said it did. That is, they confirm the details of the purchase, including the transaction’s time, amount, and participants of the transaction.

3.That transaction must be stored in a block with the digital signature, amount of transaction.

4.Now the block must be given hash code so that it can be distinguished from others. Once the block is hashed, it can be added to the end of block chain. When that new block is added to the blockchain, it becomes publicly available for anyone to view.

Each computer in the blockchain network has its own copy of the blockchain, which means that there are thousands of copies of the same blockchain. Although each copy of the blockchain is identical, spreading that information across a network of computers makes the information more difficult to manipulate. With blockchain, there isn’t a single, definitive account of events that can be manipulated. Instead, a hacker would need to manipulate every copy of the blockchain on the network. This is what is meant by blockchain being a “distributed” ledger. So the hacker has to manipulate every single block after the one which he wanted to change.

Recalculating all those hashes would take an enormous and improbable amount of computing power. In other words, once a block is added to the blockchain it becomes very difficult to edit and impossible to delete.

To address the issue of trust, block chain has implemented tests for computers that want to join the block chain network. One of them is proof of work system.

In proof of network system, the computers have to solve a complex mathematical problem in order to prove themselves. If a computer solves the problem it becomes eligible to add a block to the block chain network. Although this sounds very simple, in reality only one in 15.5 trillion, as of January 2020, were able to solve the problem.

The goal of blockchain is to allow digital information to be recorded and distributed, but not edited.

The blockchain network discourages the existence of multiple blockchains through a process called consensus. In the presence of multiple copies of the blockchain, the consensus protocol will adopt the longest chain available. More users on a blockchain mean that the blocks can be added to the end of the chain quicker. According to that logic, the blockchain of record will always be the one that most users trust. The block chain network stands to make every business and government operations more efficient, accurate and secure.