The blockchain is a distributed database that keeps a permanent and tamper-proof record of transactions カヴァン・ チョクシ. The blockchain is created by a network of computers that validate transactions. This article will explain how blockchain technology works and why it has applications far beyond Bitcoin.
What is the Blockchain?
To understand how blockchain works, you first have to understand what blockchain is.
The blockchain is a distributed database that keeps a permanent and tamper-proof record of transactions. The blockchain is created by a network of computers that validate transactions. This article will explain how blockchain technology works and why it has applications far beyond Bitcoin.
If you’ve read about Bitcoin or Ethereum, then you’ve likely heard the term blockchain used frequently. The technology underlying Bitcoin and other cryptocurrencies are one of the most exciting recent developments in computer science; it’s taking us into an era where decentralized networks can validate transactions without needing to trust a third party. This development has applications far beyond exchanging value (such as Bitcoin) and will likely disrupt many industries in the coming years. The blockchain is only one type of distributed ledger; others include tangle, hyperledger, oracles, and more.
What’s important to understand about the blockchain is that it has two properties: It’s distributed (meaning there is no single point of failure or place to attack), and it’s immutable (you cannot change the historical record).
- Distributed: A blockchain is distributed because it runs on hardware many different people provide. This means that there is no single point of failure since if some nodes go down, others will continue running. It also means there is no central point of control; no one entity decides the rules of the network.
- Immutable: A blockchain is immutable because historical records cannot be changed once they’ve been added to the ledger. Why? Because each record (or block) contains a cryptographic hash of the previous record, this creates a chain that goes back to the first block. Additionally, new blocks are only added at the end of the chain, so attempting to alter a historical record would be pointless.
How Does the Blockchain Work?
In the blockchain, records are added to blocks. Blocks hold batches of valid recent transactions hashed and encoded into a Merkle tree. To add another block to the chain, a hash is created from the last block in the chain and compared to the current target for proof of work. If this new hash matches this target, the new block is added to the chain.
The “hash” mentioned above refers to the cryptographic hash function that creates a fixed-length alphanumeric string from variable input data. For instance, if you take this sentence and hash it with SHA256, the output will be a string of 256 letters and numbers that might look something like “dfaf3c9d40063eb5a20b2f9810be1c74dc62e86cb22f025052d1216c6ac09924”.
Each block holds batches of valid recent transactions in the blockchain that are hashed and encoded into a Merkle tree. A Merkle tree is a data structure used to efficiently summarize and verify the integrity of large sets of data. By providing a “fingerprint” for all transactions which appear in a block, and by including the fingerprint in an encoded format in each transaction’s header, then you can efficiently prove whether or not a transaction belongs in the block without having to go back and look through all previous transactions (which might be impossible for decentralized networks where there is no central database).
The blockchain is a new way of storing and verifying transactions. It has many benefits, but there are also some disadvantages. Businesses should weigh the pros and cons before deciding if the blockchain is right for them.