What is blockchain

The spine to every cryptocurrency, blockchain is an online ledger system that registers transactions, validates them via time stamps, and then prohibits anyone to create changes in the recorded transactions. That is as simple as it gets. This article will discuss the technicalities that lie behind the working of blockchain.

Where did blockchain come from?

With the inception of Bitcoin, the first-ever cryptocurrency, blockchain also saw the face of the internet. Initially, it was used by bitcoin only but as the times grew and the market began to see a lot of different cryptocurrencies, the use of blockchain grew beyond the horizon of transaction purposes. The concepts of interoperability of blockchain came into play and the people realized that it was the goose that laid golden eggs.

AStoshi Nakamoto, the creator of bitcoin is credited with the writing of blockchain codes and making it a fully functional system.

The way it has upscaled from just one cryptocurrency to at least a thousand more and beyond is astonishing,

How does blockchain establish trust?

Blockchain creates trust in users not by itself but rather uses different metrics to define trust between two parties. This includes different token and each of the tokens have a history that links them to the previous one. The transaction that happens over the whole system is broadcasted on all the nodes that are in the system. The blockchain itself contains all the previous transactions and also the cons that are newly mined. What it does is, acts as a distributed system inside the system itself.

How does blockchain work?

The working of blockchain is mainly dependent on the premise of cryptography. Cryptography works around keys and keys are the most important part of the whole idea behind cryptocurrencies and bitcoin, and moreover, the blockchain technology. When looked closely, blockchain is not just one single tech but integration of three different forms of technology. First is a peer-to-peer network that encompasses an online ledger that is shared among the network as a whole.

Second, are the cryptographic keys that bind the whole system together, and last but not least, there is a means that stores that record all the transactions that happen over the network.

You might be familiar with a lot of things apart from the concept of cryptography and keys. Keys are of two types public and private. These keys play a vital role when a transaction happens between two parties. It is not like one of the participants holds the public key and the other holds a private key or vice versa, but each of the participants holds both of such keys. They are further used to create a reference for the digital identity and that too in a secure fashion. The digital signature is one of the most important aspects of blockchain or transactions that happen over the internet

What is the difference between cryptocurrencies and blockchain?

Blockchain is the platform where the exchange of cryptocurrencies happens. Cryptocurrencies are exchanged on the blockchain, it is a ledger system. There can be no comparison between the two because they are two very different things, it is like comparing a glass of water and water itself. The glass is an object and it holds another object called water. The glass can’t be the water.

Can blockchain be hacked?

Hacking blockchain is not an easy task and yes, theoretically it can be hacked. Blockchain is made up of several nodes. Think of nodes as individual people who are sitting on their computers in remote parts of the world. To hack blockchain, a hacker would need more than 50% of the total computing capacity of the whole system of blockchain.

It is interesting to note that nodes work as a single system when they work together. Imagine a system so big that it is spread across the globe and does not have a central system to support it. The hacker would need one single system that is able to compete with a lot of different systems, thousands if not millions at the same time.

In theory, yes, but it is not possible to hack blockchain practically.

Are there different types of blockchain networks? Ye, there are 4 different types of blockchain networks. The first is the public blockchain network, the most prominent and one of the earliest examples of blockchain networks. Public blockchain networks are open to all, meaning that almost anyone can read that network and see the transactions that happen over it. These networks are sometimes called permissionless.

Then comes the semi-private blockchain networks. Such networks are run by different companies and their access is granted to users who satisfy the criteria set by the organization these blockchains are not exactly decentralized but they are more of a semi-private network.

The consortium is another type of blockchain and it is a widely accepted business model. The whole chain is selected and operated by a pre-selected group and the right to submit and read transactions may or may not be given to the public, depending on th choice of the organization.

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Bottom line:

Blockchain is a technology, not an asset that can be speculated or traded. Blockchain uses the applications of cryptography to provide a transparent yet firmly secure online ledger system to the users. Just a fun fact, the creator of bitcoin may be holding $61 billion in bitcoin and the fact that the user is completely anonymous makes this fact yet more crazy!