What is Blockchain?
Blockchain can be defined as a sequence of blocks that contain information. The technique is meant to timestamp digital documents in order that it isn’t possible to backdate them or temper them. the aim of blockchain is to unravel the double records problem without the necessity of a central server.
The blockchain is employed for the secure transfer of things like money, property, contracts, etc. without requiring a third-party intermediary like bank or government. Once knowledge is recorded inside a blockchain, it’s very difficult to vary it.
The blockchain may be a software protocol (like SMTP is for email). However, Blockchains couldn’t be run without the web. it’s also called meta-technology because it affects other technologies. it’s comprised of several pieces: a database, software application, some connected computers, etc.
Sometimes the word used for Bitcoin Blockchain or The Ethereum Blockchain and sometimes it’s other virtual currencies or digital tokens. However, most of them are talking about distributed ledgers.
What Blockchain is NOT!
- Blockchain isn’t Bitcoin, but it’s the technology behind Bitcoin.
- Bitcoin is that the digital token and blockchain is that the ledger to stay track of who owns the digital tokens.
- You can’t have Bitcoin without blockchain, but you’ll have a blockchain without Bitcoin.
Let’s study about the Blockchain architecture by understanding its various components:
What is a Block?
A Blockchain is a chain of blocks that contain information. the info which is stored inside a block depends on the sort of blockchain.
For Instance, A Bitcoin Block contains information about the Sender, Receiver, number of bitcoins to be transferred.
The first block within the chain is named the Genesis block. Each new block within the chain is linked to the previous block.
Understanding SHA256 – Hash
A block also features a hash. A is often understood as a fingerprint which is exclusive to every block. It identifies a block and every one of its contents, and it is often unique, a bit like a fingerprint. So once a block is made, any change inside the block will cause the hash to vary.
Therefore, the hash is extremely useful once you want to detect changes to intersections. If the fingerprint of a block changes, it doesn’t remain an equivalent block.
Each Block has
c)Hash of the previous block
Consider the following example, where we have a sequence of three blocks. the first block has no predecessor. Hence, it doesn’t contain has the previous block. Block 2 contains a hash of block 1. While block 3 contains a Hash of block 2.
Therefore, all blocks are encompassing hashes of previous blocks. this is often the technique that creates a blockchain so secure. let’s examine how it works –
Assume an attacker is in a position to vary the info present within the Block 2. Correspondingly, the Hash of the Block also changes. However, Block 3 still contains the old Hash of Block 2. This makes Block 3, and every one succeeding blocks invalid as they are doing not have correct hash the previous block.
Therefore, changing one block can quickly make all the following blocks invalid.
Proof of work
Hashes are a superb mechanism to stop tempering but computers lately are high-speed and may calculate many thousands of hashes per second. during a matter of jiffy, an attacker can tamper with a block, then recalculate all the hashes of other blocks to form the blockchain valid again.
To avoid difficulty, blockchains use the concept of Proof-of-Work. it’s a mechanism that slows down the creation of the new blocks.
A proof-of-work may be a computational problem that takes bound to effort to unravel. But the time required to verify the results of the computational problem is extremely less compared to the trouble it takes to unravel the computational problem itself.
In the case of Bitcoin, it takes almost 10 minutes to calculate the specified proof-of-work to feature a replacement block to the chain. Considering our example, if a hacker would to vary data in Block 2, he would wish to perform proof of labor (which would take 10 minutes) and only then make changes in Block 3 and every one the succeeding blocks.
This kind of machine makes it quite tough to tamper with the blocks so albeit you tamper with even one block, you’ll get to recalculate the proof-of-work for all the subsequent blocks. So, hashing and proof-of-work mechanisms make a blockchain secure.
Distributed P2P Network
However, there’s another method which is employed by blockchains to secure themselves, and that is by being distributed. rather than employing a central entity to manage the chain, Blockchains use a distributed peer-peer network, and everybody is allowed to hitch. When someone enters this network, he will get a complete copy of the blockchain. Each computer is named a node.
Let’s see what happens when any user creates a replacement block. This new block is shipped to all or any of the users on the network. Each node must verify the block to form sure that it hasn’t been altered. After finished checking, each node adds this block to its blockchain.
All these nodes during this network create a consensus. They concur about what blocks are valid and which aren’t. Nodes within the network will reject blocks that are tampered with.
So, to successfully tamper with a blockchain
- You will get to tamper with all blocks on the chain.
- Redo the proof-of-work for every block.
- Take control of greater than 50% of the peer-to-peer network.
After doing all these, your tampered block become accepted by everyone else. This is next to an impossible task. Hence, Blockchains are so secure.
How Blockchain Transaction Works?
Step 1) Some person requests a transaction. The transaction could be elaborated on cryptocurrency, contracts, records, or other information.
Step 2) The requested transaction is broadcasted to a P2P network with the help of nodes.
Step 3) The network of nodes authenticates the transaction and the user’s status with the help of known algorithms.
Step 4) Once the transaction is finished the new block is then added to the existing blockchain. In such a way that is permanent and unalterable.