The blockchain is an indisputable ingenious invention of modern times– considered to be the brainchild of a person or group of people known by the pseudonym, Satoshi Nakamoto. Satoshi Nakamoto a name itself wrapped in various mysteries as is the term Blockchain. This technique was originally described in 1991 by a group of researchers namely W. Scott Stornetta and Stuart Haber. In their work, the goal of the two scientists was to develop a system where the timestamps of a document would be immune to tampering or changes. Merkle trees were later introduced by the two scientists to the design and this increased the efficiency since it allowed for the collection of several documents into one block.
The thing to be noted is that the Satoshi Nakamoto did not use the term blockchain but he (or she or they whoever they are) are responsible for conceptualizing the blockchain in form of the most famous cryptocurrency of all time the Bitcoin
As for the history of term Blockchain, it’s covered in mist as there is no actual evidence of someone coining it. But according to the research done by Steve Ellis,
... I don't know where the term "block chain" originally came from, but a small amount of Googling brought me to a reference that is at least as old as 1976. Beyond that, I know that there is no reference to a "block chain" in the original Bitcoin white paper.
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But since then, it has evolved into something greater, and the main question every single person is asking is:
What is Blockchain?
As the word indicates the blockchain is a chain of blocks that contains information. Or to be more precise the blockchain is a distributed ledger that is completely open to anyone. They have interesting property, once some data get recorded inside a blockchain it gets almost impossible to change it.
More simplifying it, understand blockchain as a spreadsheet or any database table which is duplicated across the thousands of systems in a network, and voila that’s what blockchain is.
To understand blockchain lets first understand the “block”.
Block is the basic unit in a blockchain, it stores the actual information and the security measures which are used for maintaining the integrity and the security of the blockchain.
Each block contain basically three things
- The Information
- Hash of the Block
- Hash of the Previous Block
There are three tools in the Blockchain’s inventory to save itself against all the hackers, which are.
- Proof of Work
- Distributed nature
- Hash: Hash is like a fingerprint of the block which is unique and
totally dependenton the content of the block. Changing the data or information ofthe block result in a change of the hash. If we alter one block fomthe chain all the other blocks will be invalid as with the help of hashes they point to one another.
But with computers getting faster day by day along with commercial Quantum Computers available. Hashes can be calculated at a speed of hundreds of thousands of hashes per second. Hence one can alter the block, recalculate the hashes of all the blocks and make his chain valid again. But there are two other essential measures.
- Proof of Work: It is a mechanism that slows the creation of a new block. In the case of BitCoin, it takes 10 minutes to calculate the required proof of work and add a block to the chain. This makes it hard to temper with block cause if you alter one block you need to calculate the proof of work for all other blocks.Which can be very
But even after these two measures its possible to alter the blockchain. But the final measure makes it impossible to tamper the blockchain.
- Distributed Nature: Instead of using a central entity to manage the chain, blockchain uses a peer-to-peer network and everyone is allowed to join. Whenever someone joins this network he gets a full copy of the blockchain and hence can contribute to the verification of other blocks. Whenever a new block is created its send to everyone in the network and everyone checks if its been tampered with, if no then its added to the chain.
Hence in order to successfully tamper with the blockchain one needs to
- Tamper all blocks on the chain
- Redo proof of work for all blocks.
- Take control of more than 50% of the P2P network systems.
Only then the tampered block can be accepted. Making its next to impossible to alter a block-chain’s record.
The idea of Blockchain
Whoever designed the blockchain, wants to go against the grain. Against all those big humongous non-human corporations.
The basic idea of blockchain is to provide the people with all the power and control over what’s theirs.northner
As revolutionary as it sounds, Blockchain truly is a mechanism to bring everyone to the highest degree of accountability. No moreIan Khan, TEDx Speaker | Author | Technology Futurist
missed transactions, human or machine errors, or even an exchange that was not donewith the consent of the parties involved. Above anything else, the mostcritical area where Blockchain helps is to guarantee the validity ofa transaction by recording it not only on a mainregister but a connected distributed system of registers, all of which are connected througha secure validation mechanism.
The Pillars of Blockchain Technology
The three main properties of Blockchain Technology which have helped it gain widespread fame are as follows:
As the words stands for the dispersion or distribution of functions and powers . The blockchain is also a Decentralized technology, means there is no central entity that is controlling the blockchain. But all its users are the one which keep up and control the blockchain.
In a decentralized system, the information is not stored by one single entity. In fact, everyone in the network owns the information.
In a decentralized network, if you wanted to interact with your friend then you can do so directly without going through a third party. That was the main ideology behind Bitcoins.
One of the most interesting and misunderstood concepts in blockchain technology is “transparency.” Some people say that blockchain gives you privacy while some say that it is transparent.
But what it does is maintain an impeccable level of transparency and the same level of privacy for the user.
User’s identity is hidden via complex cryptography and represented only by their public address. So, if you were to look up a person’s transaction history, you will not see “Dev sent 1 BTC” instead you will see “1MF1bhsFLkBzzz9vpFYEmvwT2TbyCt7NZJ sent 1 BTC”.
So, while the person’s real identity is secure, you will still see all the transactions that were done by their public address. This level of transparency has never existed before within a financial system. It adds that extra, and much needed, level of accountability which is required by some of these biggest institutions.
Immutability, in the context of the blockchain, means that once something has been entered into the blockchain, it cannot be tampered with. Once something is listed on the blockchain it’s permanent. It can never be changed or deleted.
Meaning no fiddling with the accounts or tax evasion. Just imagine the level of corruption-free government we could have.
The reason why the blockchain gets this property is that of
In simple terms, hashing means taking an input string of any length and giving out an output of a fixed length. In the context of cryptocurrencies like bitcoin, the transactions are taken as input and run through a hashing algorithm (Bitcoin uses SHA-256) which gives an output of a fixed length.
Network Core of Blockchain: Peer to Peer
One of the main uses of the peer-to-peer network is file sharing. If you are to use a client-server model for downloading, then it is comparetiely slow and
However, in a peer-to-peer system, there is no central authority, and hence if even one of the peers in the network goes out of the race, you still have more peers to download from.
Hence the Peer to Peer network fulfills the core of the blockchain i.e. no central authority.
According to the blockgeeks.com
The peer-to-peer network structure in cryptocurrencies is structured according to the consensus mechanism that they are utilizing. For cryptos like Bitcoin and Ethereum which uses a normal proof-of-work consensus mechanism (Ethereum will eventually move on to Proof of Stake), all the nodes have the same privilege. The idea is to create an egalitarian network. The nodes are not given any special privileges, however, their functions and degree of participation may differ. There is no centralized server/entity, nor is there any hierarchy. It is a flat topology.
These decentralized cryptocurrencies are structured like that is because of a simple reason, to stay true to their philosophy. The idea is to have a currency system, where everyone is treated as an equal and there is no governing body, which can determine the value of the currency based on a whim. This is true for both bitcoin and Ethereum.
Now, if there is no central system, how would everyone in the system get to know that a certain transaction has happened? The network follows the gossip protocol. Think of how gossip spreads. Suppose Alice sent 3 ETH to Bob. The nodes nearest to her will get to know of this, and then they will tell the nodes closest to them, and then they will tell their neighbors, and this will keep on spreading out until everyone knows. Nodes are basically your nosy, annoying relatives.
Applications of the blockchain
- Blockchain Finance: At its simplest, cryptocurrencies, or digital coins, are coins that are passed through an electronic network. You can make transactions by check, wiring, or cash. You can also use a type of virtual currency, most famously Bitcoin (BTC) but also Litecoin, Peercoin, or Dogecoin, among others, where you use an electronic coded address to make the transaction.
- Smart contracts: Distributed ledgers enable the coding of simple contracts that will execute when specified conditions are met. At the technology’s current level of development, smart contracts can
be programmedto perform simple functions. For instance, a derivative couldbe paid out when a financial instrument meets certainbenchmark, with the use of blockchain technology and Bitcoin enabling the payout to beautomated.
- Crowdfunding: Crowdfunding initiatives like Kickstarter and Gofundme are doing
the advancework for the emerging peer-to-peer economy. The popularity of thesesites suggests people want to have a direct say in product development. Blockchains take this interest to the next level, potentially creating crowd-sourced venture capital funds.
- Governance: By making the results fully transparent and publicly accessible, distributed database technology could bring full transparency to elections or any other kind of poll taking. Ethereum-based smart contracts help to automate the process.
- File storage: Decentralizing file storage on the internet brings clear benefits. Distributing data throughout the network protects files from getting hacked or lost.
- Protection of intellectual property: As is well known, digital information can be infinitely reproduced —
and distributedwidely thanks to the internet. This has given web users globallya goldmine of free content. However, copyright holders have not beenso lucky, losing control over their intellectual property and sufferingfinancially as a consequence. Smart contracts can protect copyrightand automate the sale of creative works online, eliminating therisk of file copying and redistribution.
These were some basic applications of blockchain technology and the possibilities are limitless.
A million workers working for nothingJohn Lennon
You better give ’em what they really own
We got to put you down
When we come into town