What is Blockchain Technology?
Blockchain technology is the process involved in building a blockchain. It is the technology involved in carrying out various aspects of a blockchain.
Blockchain is a type of digital ledger. It stores transactional records in an electronic form in a structure known as a “block”. These transactional records are joined in a peer-to-peer network by a chain (several databases). By linking these transactional records in a chain, any alteration can not be made unless a new transaction is made; this makes it difficult for information on a blockchain to be tampered with.
Blockchain eliminates the process that comes with traditional transactions. Traditional transactions often require a third-party link which makes it easy for transactions to be tampered with, it also requires formalities that are often tiring.
A world without traditional transactions is almost unimaginable, but this can be achieved with a blockchain. Instead of bank transactions that often require a third-party link – the bank, monetary transactions can be made without the use of banking apps or channels.
THE PROPERTIES OF A BLOCK
A block consists of a hash, data, and the hash of a previous block. A hash is the unique fingerprint of a block. When changes are made, the hash changes and this renders the block in question and the other blocks on the chain invalid.
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TYPES OF BLOCKCHAIN
- Public Blockchain: it requires no permission to join, and users can access and verify blocks. To be in the network, one can easily sign up on a Blockchain platform. A public blockchain is secure as long as the rules are followed.
- Consortium Blockchain: This is a type of Blockchain in which more than one organization controls a network. Several organizations can join a network, and do a series of operations, like smart contracts, mining, e.t.c.
- Private Blockchain: Unlike the consortium Blockchain, a private Blockchain is controlled by one organization. It requires permission to join its network and is not necessarily open to the general public. Transactions carried out on a private Blockchain are faster because the users are smaller compared to the other types. It is however easier to hack into since it is easier to get consensus because of its limited number of nodes.
- Hybrid Blockchain: this is the combination of both the private and public types of Blockchain. It has both private and public features as one can have both private and public Blockchain. An organization can choose which information to release on its public Blockchain, and which information to hide in its private. The Hybrid Blockchain requires more hashing and more nodes for security.
- Blockchain builds trust. As transaction records are visible to the parties involved in a transaction, everything about a transaction is revealed to both parties, this helps alleviate mismanagement and misappropriation of funds.
- Transactions made on a blockchain are irreversible. Even system operators can not reverse transactions made on a block.
- It reduces cost. Because Blockchain eliminates third-party links, it reduces the cost of transactions as no fee is paid to facilitate transactions.
- Not only can digital ledgers not be tampered with, but they are also free from unforeseen circumstances like arson, fire, and natural disasters.
- Goods can be monitored, from where they were produced to the channels they had to go through before getting to the final producer.
WHY IS BLOCKCHAIN SAFE?
- The Use of Hashes: To effectively make changes to a block, the hash of each block in a chain has to be recalculated. Since each block contains the hash of the block in front of it, every block in that chain is invalid unless the Proof-of-work is calculated.
- PoWs: To change something in a block, you have to produce the proof of work for all the blocks in a chain, this is done by calculating the hashes for all the blocks in an a. chain To further reduce tampering, an amount of time is required to create a new block, as this feature slows down the creation of new blocks. In the case of Bitcoin, the time required to create a new block is ten minutes, this makes it difficult for blocks to be tampered with.
- Peer to Peer network(P2P): Blockchain operates a peer to Peer network instead of a central entity network, this makes it difficult for blocks to be tampered with. When a new block is added to a chain, each person in the peer to Peer network is notified. To add a new block, this system requires a consensus from everyone involved in the network; the block has to be accepted by everyone in the network. This is equally difficult to do.
- To tamper with a block, you have to go through the Hashes, the Proof-of-works, and the peer-to-peer network, this is very difficult and almost impossible to do.