What is Blockchain? Have you ever heard of the blockchain?
Blockchain is the answer to many common problems.
Blockchain is the most popular word, Bitcoin has made it popular. We know about cryptocurrencies and the technology behind works is blockchain. Let’s understand first about the blockchain keyword. Blockchain has made with the two words Block and Chain or we can say it is a chain of blocks. Every block contains the data (more will discuss later) and added after the previous block that makes a chain.
Blockchain is a public electronic ledger based on a Peer to Peer system that can be accessibly publicly, anyone can see the ledger but no one can change or manipulate the ledger because it’s immutable and bind with cryptographic security.
We can say that Blockchain is a shared, immutable ledger with peer to peer network for recording transactions, tracking data. Blockchains are a fascinating new technology. Blockchain will revolutionize business processes in many industries, but its adoption requires time. Blockchain technology is often centralized so many countries are excited to use this technology. As we learned blockchain is the combination of block and chain.
What is Block? A Block has a combination of three layers. One is the hash calculated based on the data. Two is the data (it can be anything like transaction or value) and the third is the hash value of the previous block. The important thing is that if we change the data then the hash of the block is changed accordingly.
How Blockchain Works?
We maintain our savings in the bank and the bank is the central authority so there might be the chance to manipulate the balance or anything misshapen, bank has all the control. It’s a different thing that we trust on the bank and banks will never do these kinds of things but it is a serious problem so here comes blockchain in the picture.
As per the blockchain concept no one can be the central authority all the network that connect with peers holds the balance and everyone can see the records but in bank case, this is confidential information so we have to use the private blockchain.
Real-Life Example:
Alice and Maria want to marry so they send the invitation to their relatives. Because they can be the witness of their marriage. If some other person wants to prove that they are not married, So he has to do 51% of the people with him that is not possible.
What is Consensus:
The Consensus is a strategy that a group of the computer used to agree between each other so they can be the same state. Suppose we have ten mining nodes and all of the nodes store a copy of all the ledger with the same state. So let’s take a look if a new block comes and ready for adding in the blockchain but the question comes is which mining node does it. Suppose the second node does the work and what happens if this node is dis-honest. So that’s why blockchain follows some consensus algorithm. The most popular consensus is POW (Proof of work) used in Bitcoin. let’s understand some famous consensus.
Proof of Work (PoW) Consensus:
The Proof of work is the most famous consensus algorithms. In this consensus, all the nodes spend their computing power to solve the calculations and the winning node gets the chance to mine the block and broadcast this block to all the miners as per the protocol.
Proof of Stake (POS) Consensus:
The Proof of Stake (PoS) concept states that a person gets the chance to mine or validate block transactions according to how many coins hold. Proof of stake is used by the famous Ethereum 2.0 blockchain. In these algorithms, Stake (Risk Volume) is the base for mining the block. Meaning who holds the larger volume, the chance for mining/validate block is too high.
These are the most popular consensus algorithms, there are many more consensuses like Proof of Elapsed Time (PoET) built by Intel, Proof of Deposit (PoD) is similar of PoS the difference only is consensus based on the deposit amount, Proof of Capacity (PoC) based on hard drive space.
That’s it. I hope it gives a basic understanding of Blockchain. If the smile comes on your face after reading then clap for me.
I have worked on blockchain for the last two years and this distance I have learned Ethereum, Bitcoin and, Hyper-ledger Fabric. I will share some interesting things about these. Keep to follow me.
Thank you for reading. Have a Blessed Day !!