Blockchain has been called the most disruptive technology in decades. It has the potential to completely change the way money is transferred, how businesses maintain their everyday operations and can also one day change the way we vote.
What is Blockchain?
As the word indicates each block continues to chain with another block, it’s known as Blockchain. It is a technology that uses a distributed ledger. In simple words, Blockchain is a type of database. Think of it as a notebook, the pages represent a block and the binding of the book are the hash codes binding them blocks together.
What is a Block?
A block is a register, or ledger, or data container that contains a wide variety of messages. A block contains three things (mainly):
- Data itself which can be anything from numbers to images
- Hash of the block
- Hash of the previous block
What is Hash?
Hash is a unique identifier of the block like a fingerprint or DNA. The hash actually depends upon the data in the block. It is calculated using cryptography. If a hacker tries to change the data, it will cause a change in the hash of the block and the next block will lose its link to the chain breaking the entire chain. It is difficult to change the contents of a block after its creation without wrecking the whole chain.
How Blockchain Works?
The blockchain is stored on a decentralized network and every change to it must be authorized by more than half of the computers on the network, which eliminates the need for node has one controlling authority.
Let’s see how a money transaction is recorded on a blockchain? A user requests to start a new transaction. The mining blocks create a new block with all the details of the transaction and the hash of the previous block. Except when its the genesis block (First Block is known as Genesis Block). Then there is no previous block. All the computers in the network are notified about this new block. Then more than 50% nodes validate the new block and the transaction. The block is then added to the chain and the transaction is executed. This method is known as Consensus Mechanism.
Bitcoin and Blockchain
You might be wondering, “Who is the reason for bitcoin’s massive success today?”. We can categorically say that it is Blockchain. But if you think blockchain was created just for bitcoin. Then you are wrong, it’s an idea that existed long before bitcoin.
Despite the fact that the concept of blockchain was first proposed in 1982, almost 20 years Satoshi Nakamoto was the one who decided to use Blockchain Ledger for his bitcoin in 2008 and put it into fully operational. The next step was to apply what he said in 2009 into action by creating the first block in the Bitcoin Blockchain. This is how it began, and now it is growing in height like nothing else.
Here, We tried to explain about blockchain and working of blockchain in simple words. But still, If you have any question about blockchain. Comment down below and we will try our best to clear all your doubts.