Blockchain: Everything You Need to Know

What is Blockchain?

As the name suggests, a blockchain is a chain of blocks that contains information of hash. A blockchain refers to a commonly distributed ledger available to the general public.

The technique behind blockchain was first described in 1991 by a group of researchers who had originally intended to use it for timestamps in digital documents. However, the technique went on to be ignored most of the time, but it got adopted by Satoshi Nakamoto, the creator of Bitcoin, in 2009 which he used for the creation of the digital cryptocurrency, Bitcoin.

Blockchain has an amazing feature, that makes it very difficult for a data to be changed once it is registered into the blockchain.

Also Read: Blockchain Technology: Explained for the Layman

How do they Work?

Every block in a blockchain consists of certain data, the hash of the block along with the hash of the preceding block. The data stored inside each block depends upon the type of the blockchain. For example, the Bitcoin blockchain stores every detail about a transaction including the sender, receiver and the number of coins in the transaction.

Each block in a blockchain consists of a hash, which can be compared to the human fingerprint as it isn’t identical to any other hash in any form. The hash in a block helps in the identification of the block along with all of its contents. So, it is highly unique, similar to the human fingerprint. When a block is created, a hash is generated automatically for it. The hash could change when something inside the block is changed.

BlockChain_TechSathi

Simply put, hashes in blocks of a blockchain are highly significant in case it is required to detect changes made to each block. If the hash or fingerprint of a block is found to be changed, then it would mean that the block is no longer the same. In this way, a chain of blocks is created in an effective way. This methodology helps in making the blockchain immensely secure.

However, tampering can’t be simply prevented by the use of hashes. In recent days, the computers are so fast that they can generate hundreds of thousands of hashes every second. As a result, anyone can tamper with a block effectively, allowing them to recalculate the entire hashes of other blocks for making the blockchain valid again.

In order to prevent this issue, there is something called proof-of-work in blockchains which makes it easy for slowing down the mechanism of creating new blocks.

In the case of Bitcoin, it takes around 10 minutes for the calculation of the required proof-of-work and to add a new block to a chain of blocks. This methodology makes the tampering process difficult with the blocks as the proof-of-work has to be recalculated for all the succeeding blocks after tampering with one block. Hence, the creativity made into the use of hashing and the proof-of-work mechanism in a blockchain helps in improving the security of the blockchain.

Blockchains make use of a peer-to-peer network, allowing anyone to join the network rather than having a central entity to manage the chain. Hence, a full copy of the blockchain is provided to anyone who joins the network. The node uses this to verify that things are still in order when someone joins the network.

What Happens When Someone Creates a New Block?

When someone creates a new block, the block is provided to everyone who is on the network. Afterward, every node verifies the new block to ensure it hasn’t been tampered with. If everything is fine, each node adds the new block to their chain of blocks. Every node that verifies the mechanism in this network build consensus and agrees on which blocks are valid, and which aren’t. Other nodes in the network reject the blocks which are tampered or not by looking at the hash.

Hence, for tampering with a blockchain, you should also tamper with all the blocks on the particular chain, and recalculate the proof-of-work for each block, and finally take control of more than half of the P2P (peer-to-peer) network. When this is done, your tampered block can get accepted by everyone else, which is nearly impossible to happen.

Blockchains are evolving so rapidly that the creation of the blockchain technology has reached its peak in many people’s interests. Thanks to this technology, other people realized that technology could be used for several other things.

Write up by Pradeep Bhattarai