I am sure you must have heard of Bitcoin. Bitcoin like Ether is a cryptocurrency. What makes it special is unlike our traditional transactions, where we need a central authority (like a bank) to process those, in cryptocurrencies, there is no such need of centralization. That is why they are referred to as being decentralized. Therefore, anybody from any part of the world can send money to anybody in any part of the world instantly, while traditional international payments can take up to 3-5 business days to commit. These cryptocurrencies are built on the Blockchain technology.
So, what exactly is this Blockchain?
Traditionally people maintained a ledger of all the transactions or records in written format. Even today, Maa maintains a diary to account all the expenses. Even I maintain a log of all the places I have spent my money.
With the Industrial Revolutions taking place people have moved from these traditional hand written, physically maintained records to digital alternatives including Excel sheets and Databases to name a few. Just like the written records it has now become comparatively easy to manipulate data stored in excel sheets or databases by simply posing to be an authorised user. This can be done by hacking into the system.
This is where blockchain comes into picture.
Blockchain in simple terms is interrelated data arranged in a chain. Here data is stored in the form of blocks, thus the name BLOCKCHAIN. This chain is append-only chain, i.e., data can only be added to it, not deleted from it. This makes it tamper proof.
Technically, Blockchain is defined as a distributed, replicated peer – to – peer network of databases that allows multiple non – trusting parties to transact without a trusted intermediary and maintains an ever – growing, append – only, tamper – resistant list of time – sequenced records.
~ From “Blockchain Technology” by Chandramouli Subramanian, Asha A. George, Abhillash K. A and Meena Karthikeyen, Universities Press.
From the above definition we understand that the entire ledger is distributed to all the people involved in maintaining a particular blockchain. Any new data can be added to the blockchain only after all/maximum number of members have verified it. Once a block has been committed, no changes can be made to the same. If in case, the data of a particular block has to be updated, then a new block consisting of that updated data has to be committed.
We shall look into each characteristic of Blockchain in the upcoming articles. For next time, try to remember the following –
- Blockchain is immutable.
- It is decentralized.
- It is transparent.
- It is append – only.
Very helpful💯
Thankyou! I am glad it added value. 🙂
To be honest, it’s much better than the part 1.
Thankyou for your feedback. Means a lot.