With the awareness about bitcoin and cryptocurrencies growing, Blockchain technology has been a hot topic these days.
The demand for Blockchain developers has increased by 500 % over the past years. With this massive increase in blockchain jobs, people are very eager to learn about it.
So, the one who takes early entry into the blockchain can benefit a lot. Would you like to be one of the early adopters? I know you definitely want to? right! And I promise that I will try to explain blockchain in the simplest way possible ☺.
So, let us dive into the blockchain world.
Blockchain is a consensus-based secure decentralized public/private database which stores information immutably over a peer-to-peer network. The first block in the blockchain is called the Genesis block. Based on this block additional blocks are added to form a chain of blocks.
Each block in the blockchain is connected to other blocks sequentially like a chain with the help of the previous hash.
Blocks in a blockchain
Due to this if someone tries to hack a block he/she has to completely hack the whole chain which requires 51% of the total computing power of the blockchain network.
This makes hacking a blockchain near to impossible. So, blockchain is more secure and safe compared to a regular database.
Whatever you store in the blockchain is referred to as a transaction. Once the information or transaction gets stored in the blockchain it becomes immutable which means no one can change it, which brings more trust and integrity to the data
Blockchain can be treated as a large-size book where:
Blockchain compared with a Book
Section 1: Deep dive into Blockchain
Now, let’s elaborate on the terms Decentralize, Consensus, and Distributed ledger.
Blockchain is decentralized which means no central authority has control over it. For example, a bank has a central authority that makes or breaks the rules. Then the question arises, how does blockchain make decisions? So this is where consensus comes into play.
Before going to consensus we will take a quick look at, what is Bitcoin mining?
Each block in the blockchain should be mined so as to use it. Each block in the blockchain is mined by solving a computationally expensive problem through the help of machines (containing graphic cards).
The miner will be rewarded with bitcoin etc for mining blocks. Reward (bitcoin) is based on the amount of work done by the miner. After the block is mined the transactions done by various users are added to it and that information becomes completely immutable, safe, and secure.
Now that we have an idea of what is mining, let’s jump into Consensus
Consensus-based techniques are used in order to solve the problems occurring in the blockchain. These techniques help the nodes to come to common decisions about the current state of the network.
example of a conflict:
suppose all nodes are at block 100 if three miners mine three blocks at the same time say 101a, 101b, 101c.
which block should be added first? How will you resolve this conflict? This problem can be solved by the "longest chain rule"
In a public blockchain like the bitcoin blockchain conflicts are often resolved by the longest chain rule.
Say a miner received a block 101a then he will start building on top of 101a block.
In few seconds the miner sees that another block 101b, so the miner will keep an eye on the new block.
If the next block 102b is detected from other nodes in blockchain that miner will disregard 101a block and will accept the longest chain which is
Some of the important and most used consensus algorithms are
1. Proof of Work.
2. Proof of Stake.
Blockchain is a distributed ledger that was initially created for Bitcoin. In a distributed ledger the data is stored across several systems or nodes. So, In order to hack the data in the blockchain, all the distributed copies must be hacked at the same time which is practically not possible.
Section 2: Types of Blockchain
Now that we have learned the basics of blockchain, let us learn about the types of blockchain. There are basically two types of blockchain public blockchain and private blockchain:
Anyone can read without explicit authorization
Anyone can write without explicit authorization
More complex rules for better security
Complex consensus algorithm
Computationally expensive to mine and add a block
No one owns it
example: Bitcoin blockchain
Only authorized nodes can read/write the transaction data
private hence security can be implemented in a straightforward way
One or more private entities own the blockchain
Easy or computationally less expensive to add a block
example: ICICI Bank’s Blockchain
This is all for now, Thanks for reading ☺
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