Blockchains are extremely popular nowadays and they keep developing. A lot of people are now involved in this system and technology and that’s why it’s highly important to know more about it. We need to know what exactly a blockchain is, what it does and what problems it solves.
What is a blockchain?
It’s a chain of blocks that contain data and information. This technology was first adapted and used by Satoshi Nakamoto. It’s a technology that enables moving digital money or assets- such as Bitcoin, from one individual to another. So if a person wants to transfer money to someone else they do it through a third party.
This technology has now gotten rid of the centralized trusted third party. A blockchain is an open and distributed ledger. It means that all the transactions made will be saved on the blocks and can be seen by the ones involved in the blockchain. Everybody can have a copy of the saved ledger and can keep in in a note.
How does a blockchain work?
As mentioned before a blockchain is a distributed ledger completely open to anyone. What we need to make sure about is that everyone holds the same copy and they are synchronized. Once some data is saved inside a blockchain it becomes very difficult to change it.
Information held on a blockchain exists as a shared — and continually reconciled — database. This is a way of using the network that has obvious benefits. The blockchain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralized version of this information exists for a hacker to corrupt. Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet.
A block consists of soma data, the hash of the block and the hash of the previous block. the stored data depends on the type of the blockchain. Coin blockchains contain and store details about a transaction- it indicates the amount of money, the sender and the receiver.
A hash for a block is like a fingerprint for a human. It’s actually the identity of a block which is unique. Changing something in a block it’s no longer the same block which leads to a change in the hash. Each block also contains the hash of the previous block which makes a change, the technique that creates the whole system making the process secure. We call the first block the genesis block. If you change the second block the previous and the following block will become invalid because they no longer contain the correct hash of the other block. Computers these days are very fast and can calculate hundreds and thousands of hashes.