Want to learn what is Blockchain and how does Blockchain technology works. Then in this guide, you will learn everything you need to know about blockchain technology.
I am sure everyone has heard of Blockchain. Blockchain often used with cryptocurrency, for example, Bitcoin.
Blockchain is the technological power behind cryptocurrency and invented by a person (or group of people) using the name Satoshi Nakamoto in 2008.
Blockchain is a distributed system meaning there is no central system that withholds all the information. Every node in the Blockchain network contains the information.
Blockchain is simply a block of chains. Now you may be thinking about what this block and chain are. A block is a container of information. Blocks can store information about transactions or supply chain or any information that you want them to store.
For example, in the case of transactions, the information stored in a block can be a date, time, amount of money, and information about the sender and receiver.
Now let's understand the chain in Blockchain. Each block in a Blockchain is unique, and every block contains two hashes. One hash is its hash, and the other is the hash of the previous block.
Each block points to the hash of the previous block, and this creates a chain of block known as Blockchain.
You may be thinking about why we need this hash. First, we need to know:
Well, a hash is quite a topic in itself, but I am going to keep it as simple as possible. A Hash is a mathematical algorithm quite often used in cryptography.
A hash function takes data of arbitrary size and then maps it to a bit string of a fixed size. The most widely used cryptographic hash function is SHA (Secure Hash Algorithm).
The purpose of the hash is to prevent any tampering with the data.
For example, if we change even a single bit of our data, then the hash of the data changes. This way, we can check whether our data has been tampered with or not.
So that's the whole point of calculating the hash of a block, that is, to prevent tampering of information contained in the block.
Now to understand how a Blockchain works, let's take an example. Consider Bob sends money to Alice over a Blockchain network.
As soon as Bob clicks the send button, this information is shared with all the nodes in the Blockchain network, and then a block is created.
But the question arises which node in the network will create a block, since there may be thousands of nodes in the network.
This is done by using a system known as "proof of work." A node must prove that they have done work by solving a complex computational math problem.
If a computer solves one of these problems, they become eligible to add a block to the Blockchain.
Once a node becomes eligible to add a block, it then adds the information in the block (in our case block will contain sender name as Bob, receiver name as Alice, date and time of the transaction, amount of money sent, etc.).
It will then calculate the hash of the block and insert this hash and the hash of the previous block into the block.
After that, a copy of this block will be sent to all other nodes in the network, which will verify the information, and after verification, the block will be accepted, and the transaction will be completed.
To answer to that question is both "Yes" and "No." Theoretically, it is possible, but practically it is almost impossible. Here is the reason:
After a block has been added to the end of the Blockchain, it is complicated to go back and alter the contents of the block, because each block contains its hash, along with the hash of the block before it.
As I explained to you above, changing even a single bit of data changes the whole hash of the data. So, if a hacker attempts to edit the information contained in the block, the block's hash will change.
The next block in the chain will still contain the old hash, and the hacker would need to update that block in order to cover their tracks. However, doing so would change that block's hash.
The hacker would need to change every single block after it on the Blockchain. Recalculating all those hashes would take an enormous amount of computing power.
In other words, once a block is added to the Blockchain, it becomes challenging to edit and impossible to delete.
That was all about blockchain technology and I have tried to explain everything about Blockchain in an easy and understandable manner.
I hope that this guide has helped you in understanding Blockchain.
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