If you've
been the following banking, investing, or cryptocurrency for the past ten years, you
may know "blockchain", the technology behind the Bitcoin network. And
there is a good chance this is very meaningful. When trying to learn more about
Blockchain, you may encounter a definition like: "Blockchain is a
distributed, decentralized, general ledger."
What is
Blockchain?
Why call
this technology "blockchain" if it's so complex? Blockchain is merely
a chain of volumes at its most basic level but not in the traditional sense of
the term. In this context, when we use the terms "block" and "chain"
we are actually talking about digital information that is
stored in a public database.
Blocks in
Blockchain ”is made up of digital information. In particular, they have three
parts:
1. Blocks stores information about
transactions, such as the date, time and dollar amount you recently purchased
from Amazon
(Note: this
Amazon example is a descriptive purchase; as of this writing, Amazon Retail
does not operate on a blockchain policy)
2’ Blocks store information about who
participates in the transaction. A module you buy from Amazon will register
your name with Amazon.com, Inc.
Instead of
using your real name, your purchase is recorded without any identification
using a unique “digital signature” such as a username.
3’The
modules store information that is different from other modules. Just like you
and I have names to distinguish from each other, each block stores a unique
code called "hash", which allows you to tell it apart from all other
modules. Hashes are cryptographic codes created by special methods. You can say
you bought it on Amazon, but when it comes to traffic, you can't resist and
decide for a second. Although the details of your new transaction may seem
almost identical to your previous purchase, we can tell you anything other than
modules because of their unique codes.
How
Blockchain Works:
When a
module stores new data it is added to the blockchain. Blockchain, as its name
suggests, has many modules put together.
To add a
block to a blockchain, four things must happen:
1. A transaction must occur. You can
proceed with the example of your impulsive Amazon purchase. After many rush
clicks on the checkout line, you can go against your best judgment and buy. As
we discussed above, in many cases a batch will merge thousands of transactions,
so your Amazon purchase will be bundled with other users' transaction
information.
2. That transaction must be verified.
After making that purchase, your transaction should be verified. One is in
charge of checking for new data entries, along with other public records, such
as the Securities Exchange Commission, Wikipedia, or your local library.
However, with Blockchain, that work is left up to the network of computers.
When you buy from Amazon, that computer network tests your transaction the way
you said it. That is, they confirm the purchase details, including the time of
the transaction, the dollar amount, and the participants.
3. That transaction must be stored in a
block. After your transaction is verified as accurate, it gets the green light.
The dollar amount of the transaction, your digital signature, and Amazon's
digital signature are all stored in one block. There, the transaction could
join hundreds or even thousands.
4.A hash
must be given to that block. Unlike an angel earning its wings, when a set of
transactions are all validated, it must be assigned a unique, identifying code
hash. The hash of the most recent module included in the blockchain is also
provided for the module. Once the hash is done, you can add a block in the blockchain. learn more...
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