Decoding the Blockchain Technology

With the ever-growing digital ecosystem, Blockchain Technology has become incredibly popular. It is a game changing technology, often touted as laying the foundation of the coming tomorrow. With a futuristic mindset, it becomes crucial to understand what the fuss is all about?

Historical Overview

A blockchain, as the name indicates, is a chain of blocks that contains information. Originally discovered in the early 1990's by a group of researchers, it was intended to timestamp the digital documents. This was done to protect them from being tampered. It was mostly unused then, until 2009, when Satoshi Nakamoto used the Blockchain Technology to develop the digital cryptocurrency Bitcoin.

Basics first: What is Blockchain Technology?

Blockchain is a computer file that is used to store data. It is a distributed ledger that is completely open and transparent. The ultimate goal of the Blockchain Technology is to record and distribute the data without granting it access to being edited. Let us try to understand this technology a little better with the help of a real life example. This will make it easy even for a 5 year old to figure out what a blockchain is.
Blockchain Technology makes use of the decentralized database system to achieve this and ensure a high level of security and transparency

We know how the traditional trading system functions. In order to trade, you need to step to a market place, know the person and then make a deal. With blockchain you can trade without having to step down in a store and know the other person.
Blockchain is a computer file that is used to store data. It is a distributed ledger that is completely open and transparent. The ultimate goal of the Blockchain Technology is to record and distribute the data without granting it access to being edited.

Let us look at this more closely, imagine you have to make a deal for a laptop on any branded platform. The brand here works as a middleman you have to pay a part of the deal to. Blockchain works wonders in ensuring you don't need any middlemen. It is just the two parties involved in the deal. This would save you both a lot of money. Our society today has plenty of such middlemen like the banks, companies, etc guaranteeing that trade successfully takes place. Blockchain is the technology that can help replace these middlemen. It aims to act as a technological trust. How does it do that? It is a network of computers that all have the same history of transactions. To understand this better, dig into its technological connotation below.

Striking features of Blockchain

1. Security: One of the most interesting properties of blockchain is the difficulty to change the stored data. Once the data has been recorded inside the Blockchain, it becomes next to impossible to change it. But how does it work?

Each block has 3 elements:

• Data: Depending on the use, data is stored. For instance, a bitcoin block contains the information about the sender, the reciever and amount of coin.
• Hash of the block: With the creation of each block, a hash is created. Making any changes in data of a block will change its hash.
• Hash of the previous block: It is this element of a block that creates a chain of blocks. Each block contains the hash of previous block which means any change in previous block will make all the following blocks invalid.