Blockchain….After hearing this word some people may think, “I have heard this but don’t know a thing about it”. For some others, ”Blockchain! Is that even a word? It’s like two words just merged together”. Next comes a group of people where they make a living out of just these two words.
WHAT IS BLOCKCHAIN?
The first two types of …ignorant people, by gathering these two words, may define it as a ‘CHAIN-OF-BLOCKS’. Looks simple, doesn’t it? But the third type of people may define it as: ‘Any public or open distributed database or ledger which records the transactions carried out between two parties verified by the other parties in a permanent way’.
Sounds amazing, right?
Yeah, I didn’t get it either the first time I read it.
In SIMPLE words, (if there are any) Blockchain is typically a peer-to-peer(P2P) network used for communications and for creating and validating new blocks. Once information is entered it can never be erased. It contains a certain record of every single transaction ever made. So, most records remain unaltered. They remain secure. Hence, blockchains can be considered as a DECENTRALIZED database.
HOW IT ALL GOT STARTED?
It was invented by a person (or a group of people) known as Satoshi Nakamoto in 2008 (till today, no one really knows who he or she is). The main reason it was developed was to serve as the public transaction ledger for, the currently controversial cryptocurrency, BITCOIN: A peer-to-peer electronic cash system. In August 2014, the size of the records containing all the transactions reached 20 Gb. And by January 2017 the Bitcoin Blockchain reached an astounding mark of 100 Gb.
HOW does IT work?
As mentioned earlier, blockchain is a decentralized, public distributed ledger (a book of records) used to record all the transactions made on various computers without the alteration of the entered information and the consensus of the network. Let me make you understand in three simple steps in the way how I understood it.
- Every transaction which is made involves mainly two people, the sender, and the receiver. So, if a transaction is made between these two people instead of saving the information only in their databases, it is viewed by everyone who is involved in the network on which the transaction was carried out.
Thus if any user happens to make a fake(invalid) transaction, not only the receiver, but everyone on the network will get to know about it. This helps the other users to know about the authenticity of thein future senders.
- Now comes the concept of ‘valid’. When the transaction is validated it creates a block which, now can be connected to the original chain(I now feel that you have a slight interest in blockchain because at least these two words are falling in place).
- Since there are many users, many can validate a transaction and it may lead to the creation of multiple blocks by multiple networks(nodes).To simplify this, here comes another important terminology of blockchain known as proof-of-work. Don’t worry it is exactly as it sounds! It is basically a puzzle that has to be solved by the users and the solutions(according to the rules) should be difficult to compute and easy to verify. And the first one to do this is the one who gets to connect his block to the network.
- And the last and important terminology, After the solution is found the network spreads the solution along with the block. All other networks, now verify this solution. Once, it is verified the block gets added to the blockchain.
Well, now if we closely observe, blockchains are more reliable in all aspects of life such as banks, small contracts, insurance companies,overseas-trading, and so on. But apart from all these the most popular use of blockchain is CRYPTOCURRENCY. It is a digital form of an asset that can be exchanged using strong cryptography to secure these transactions. They are the virtual currencies of the 21st century. Some of the most well-known cryptocurrencies are Bitcoin, Monero, Ethereum, Ripple, etc. I won’t brag about that topic now.
Moving on, we all know that, the most beautiful things come with an expensive price tag. This is also applicable to the blockchain, except that it isn’t beautiful and it isn’t from nature. As long as there are blockchains and cryptocurrencies and as long as it remains neglected by governments, people rule the world with it. Consider this an irony; man built this technology and now this technology rules man.
I have tried my best to convince you people on how I understood this tech. Believe it or not. this world is changing at a fast pace and it isn’t what it actually looks to us in terms of technology. The above sentence I just said about man building tech and it controlling us. Well, just for change replace the tech word with Robots or AI. Or has it already happened? Just think about it….
Until then Hasta La Vista… don’t forget to subscribe to this blog :)