There has been a lot of talk on “Blockchain” technology which dawned a new digital revolution. Formal and informal forums have been held raising speculation and interest now even from the general public. And just like all new trends, there comes a mystique and myth which I would like to address.
Blockchain is simply put as an up-to-date real-time ledger. It’s innovative as well as transformational in its structure and thinking. The ledger is stored in a peer-to-peer fashion (meaning not centralised in one place but distributed among its users called the “peers”).
The world today is controlled by centralised institutions like central banks that monitor and regulate their affairs. Blockchain takes away this dependence and democratises the central control amongst its peers.
Every record in the blockchain is encrypted and time stamped so no one can tamper with any past records and makes this ideal for financial record keeping, banking, asset management in any form land, vehicles, etc. and of course, the management of contracts between parties is greatly simplified.
To give you a bit more detail, Blockchain records transactions and share that information with other nodes (computers) within the network. It basically squeezes in an enormous amount of data into a very organized and systematic process with a peer-to-peer consensus to share management of these information.
The record of transactions is being interwoven to form a “block” which as mentioned before is usually timestamped. A “block” is a database which comprises a number of transactions as that to a ledger page. So, each block contains multiple transactions inside it and each block contains hashes that are encoded and recorded into a Merkle Tree.
Hash or hashes are the imprinted codes or the digital fingerprint on each block. Whereas as a Merkle tree or a Hash Tree is the flow and the breakdown of hash codes when transacting block to block. It is the framework of the transaction using the hashes.
This is the reason why blockchains are secure because they have their own encrypted hash codes which can neither be modified nor altered. Hashes are permanent. Unless if you modify the original block along with every bit of transaction in it which is somewhat impossible to do.
Timestamps are used as basis for the arrangement of these blocks into the blockchain. Blocks are arranged in an array with timestamps as its determining factor. Although sometimes, concurrent blocks are produced at the very same time and this is called a “fork”.
As every transaction within a block is time-stamped, so is every completed block. This ensures all information is arranged in a sequence, thus, avoiding duplication of entries.
So why is it called Blockchain?
Every complete block is uploaded into the network where it is added to a chain. Other users may also be concurrently sending out their own blocks and since timestamp is the basis for the arrangement, your block has its own rightful place in the chain of events on that certain time period. It links each block into a chain.
How is Blockchain secure?
Each chain of blocks is secured with a “hash” in between every block that builds up the chain. A hash is robust as it is unique.
Blockchain is absolutely secure because all participants are given their own copies of the blockchain so any tampering will be easily detectable. When all hashes from across the chain match up, everyone will have the impression that their records are straight and sound.
A Hash Function which is cryptographic math encrypted in each block takes the information from the block and generates an alphanumeric code or hash. You may easily convert information into a hash, but it’s almost impossible to rebuild the original data from the given hash.
For certain instances wherein somebody tries to hijack or alter a created block, the hash that’s encoded in the next block wouldn’t match and this mismatch will be carried out through all subsequent blocks raising an alarm for an alteration in the chain.
The Lockdown. The hash from a block is added to the following block and it goes on like that for the following blocks. It only keeps adding and expanding.
Blockchain technology is very young with enormous potentials. It is a technological breakthrough that will transform our day-to-day engagement. It promotes trust as they institute a simple and non-paper procedure of taking ownership of information, money, and objects.
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