Blockchain Technology

Blockchain

Blockchain Introduction

Blockchain Introduction is also known as “Distributed Ledger Technology (DLT)”. Saving the information or data in such a way that it cannot be hacked. Changed or stolen in the process of blockchain. It saves the data in such a way that it cannot be accessed by an unauthorized person. Multiple copies of it can be made and sent over multiple networks that are connected to the same blockchain. As blockchain also saves data. It can be known as a Database”. However. It is different from the typical databases that we make or use.

This is because the data saved by blockchain is in the form of “blocks” that are chained together. When the new data centers, it becomes a part of a fresh block. Once this fresh block is filled, it is chained to the chain and this is exactly how a chain of blocks is formed. Different types of information can be saved in these blocks and then the chain is formed by the same mentioned process.

Blockchain Introduction: The most common use of blockchain is for the ledger of transactions. A ledger of transactions means a register or a collection where information related to transactions is saved. Similarly, when we talk about bitcoins, databases are used to store the record of transactions as well. It decentralizes the blockchain in such a way that either all users get a hold or no one gets a hold. Blockchains that are decentralized cannot be changed which means once the data has been entered into the block, it cannot be undone or changed. Incase of bitcoins, we can say that transactions that are made can be seen by anyone as they get into the records permanently.

Blockchain Security

As mentioned earlier, newly formed blocks are always stored sequentially and in a specific straight order which means that when a new block is added to the chain it is always added to the endpoint of the previous block. Talking about Bitcoin’s blockchain, blocks are placed on their positions in the chains. These positions are known as heights. In 2020, the maximum height of Bitcoin’s block reached up to 656,197 blocks.

As the blocks are added to the end of the blockchain, altering the previous blocks becomes difficult. All blocks have their hash. When digital information is converted into strings of digits and letters, hash codes are obtained. If any changes are made to the provided information, the hash code also changes along with the information.

If a hacker hacks the blockchain and tries to steal bitcoin. He alters his copy and as a result, the copy doesn’t set with the other copies. After cross- referencing, the altered copy is discovered and abandoned, and labeled as “illegal”. This procedure of hacking requires side- by- side control and hence, nearly more than half of the copies are altered and this is how this new copy gains the majority and this is how it is agreed upon.

For such an attack, a large amount of money, as well as resources, are required as all the blocks need to be redone and the hash codes also become different. Back in 2019, it had already happened that the blockchain of cryptocurrencies was under attack as the attacker got control over more than 50% of the network. Nearly $1.1 million were pulled off by this attack.

Blockchain Working

concept

Blockchain has 3 important concepts:

  • Block
  • Nodes
  • Miners

Blocks

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Miners

The formation of new blocks on a chain through a certain process is called mining. All blockchains have a unique hash and nonce. Hash also refers to the hash of the previous block. Therefore, mining a block isn’t easy, especially in the case of large formed chains. However, When a block is mined successfully, nodes on that network accept the changes made and the miner is appreciated as well as rewarded for their performance financially.

Nodes

Any device that can maintain copies of the blockchain and keeps the network activity can be known as an anode. It can be an electronic device of any type that successfully does its work. All nodes have their unique copies of the blockchain

For any kind of transaction. All you need is a wallet. This wallet is a “program” that lets the user spend cryptocurrencies such as BTC etc. These wallets are secured by cryptographical methods, i.e. public keys and private keys. It enables the user to have complete control over the transactions they make. A transaction may involve valuable information such as cryptocurrencies, personal records, etc. verified transactions are then combined with other blocks to form a new block.


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