Blockchain Explained – What is it? & Who owns it?

Blockchain Definition

Blockchains is chain on blocks that contains information. This was technically discovered by the group researchers. To timestamp digital documents so that it’s not possible backdate or tamper them.

It was being unused until it was blockchain invented by “Satoshi Nakamoto” in 2009 for creating “Bitcoin” digital cryptocurrency. If you want to know more about Crypto Currency. How it Works? How to Mine Crypto Currency.

Blockchain is completely open for everyone to distribute as a ledger. Once the data has been recorded inside a Blockchain it becomes extremely difficult to change it.

How Blockchain Works?

Each of the blocks is filled up with data, the hash of the block and the hash of the previous block. Stored data inside the block depends on type of the Blockchain. For example, bitcoin stores details of transaction in block such as the sender, receiver and amount of coins.

Blocks also contains hash just like fingerprint. Because its identifies a block which has all of its contents and its always unique just like fingerprint. When the block is created, it’s hash is being calculated. Changing inside the block will cause the hash to change.

If the hash of a block changes, it no longer will be in the same block. Third element of the block contains hash of the previous block. Which create a chain of blocks and this technique makes it so secure.

For example,

We have three block of chain each blocks contains hash and the hash of the previous block. So block three points to block two and block two point to block one. First block is very special and it cannot point to the previous block because it’s the first one. You can call the first block “Genesis Block”.

If someone tamper with the second block. This will cause the hash of the block to change as well. It will make third block and all the following blocks invalid.

Because they no longer store a valid hash of the previous block. Changing in single blocks will make the others blocks invalid. To prevent tampering using hash is not enough. Computer these days are extremely fast they can calculate hundreds of thousands of hashes per second.

You could effectively tamper with a block and recalculate all the hashes of other blocks. To make Blockchain valid again.

Types of Blockchain

blockchain can be classified into   three categories 1. Public blockchain 2. Private  blockchain or 3. Consortium or Hybrid blockchain

Public Blockchain

Publicly accessible blockchains are termed as public blockchain further these blockchains have no restriction on the participant and the validator. Also the main advantage of this type of blockchain is the uncontrollability of the blockchain.

Which means that nobody will have the complete control over the network. Hence it ensures that the data is secure and helps in immutability of the records. Also all the nodes connected to this public blockchain will have equal authority and hence this public blockchain becomes fully distributed Bitcoin and Ethereum are some of the examples  of public blockchain being used in real-world.

Private Blockchain

Private Blockchain as the name suggests this particular blockchain requires the participant to be invited before they can be part of the blockchain. Here all the transactions are visible only to the  person who are part of the blockchain’s ecosystem.

These type of blockchain are centralized and much better controlled than public blockchains. As the blockchain are more centralized here they can be governed and regulated by someone who can make sure that the governors are guiding participants.

Also these blockchain can have a token or may not have one and can be manipulated based on the preference of the blockchain owner. Private blockchains usually have a network administrator who can take care of the user permission in case any particular user requires additional authority on the go. These are typically used in private organization to store  sensitive data about the organization for example hyper ledger.

Consortium or Hybrid Blockchain

Consortium or Hybrid  blockchain now this blockchain can be divided Into two different types where some nodes are  private while others are public. As a result some of the nodes will be allowed to participate in the transactions while the other nodes are supposed to control the consensus process.

This comes out  to be as an ideal hybrid blockchain between private and public blockchain here all the nodes can be accessed by the blockchain. While the level of information that can be accessed will be based on the node accessing that particular data in this blockchain.

There are usually two types of users one is the user who has all the control over  the blockchain and decides the level of security for a particular user while rest others are the ones who just access the blockchain as per their function for example ripple network.

How Blockchain is Secured and What is Proof-of-Work?

it’s kind of a mechanism that slows down the creation of new blocks. But in the case of Bitcoins it takes 10 minutes to calculate the required Proof-of-Work and add new block to the chain.

It makes them very difficult to tamper with the blocks. If you tamper with one block, then you’ll need to recalculate the Proof-of-Work for the other following blocks.

Blockchain security comes from its creative use of hashing and the Proof-of-Work mechanism. There is one more way to secure themselves by being distributed.

It uses peer to peer network which allows anyone to join. Instead of using central entity to manage the chain. When someone join the network, they’ll get the full copy of the Blockchain. Node can use this to verify that everything is still in order.

What Happens if Someone Creates a New Block?

When someone creates a new block it will send to everyone on the network. Then each node will verify the block to make sure that it’s not been tampered.

Once it checks out everything each node adds this block to their own Block chains. In this network all the nodes can create consensus. They agree about which blocks are valid and which are not. Tampered blocks will be reject by the other nodes in the network.

So to successfully tamper with a Block chain you’ll need to tamper with all blocks on the chain. And have to redo the Proof-of-Work for each block and take control on more than 50% of peer to peer network.

Then only tampered block accepted by everyone else which is next to impossible to do that.

How Blockchain constantly evolving?

Recent developments are creations of smart contracts. These contracts are simple programs and stored inside the Block which can be used to exchange coins based on certain conditions automatically.

This technology is at peaked many people around the world is interested in the creation of the Blockchain. They also realized that this technology could be used for storing other things like (Medical Records, Digital Notary and Collecting Taxes).

Thanks For Reading…

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