Blockchain is revolutionizing the Internet as we speak. From cryptographer David Chaum to Satoshi Nakamoto, a new door to fundamentally change the way Internet transactions can be implemented was opened. So, what is this blockchain and what is this revolution everybody is talking about?
To get an idea about all this first let’s understand how the “current Internet” shares information. We know that ,“the internet is a collection of computers that share information”. All the data shared in this network is centralized. This means that if we take an instance of data sharing inside this network, there will be only two participants. No computer acts as an observer or as a validator when two other computers are sharing data.
Blockchain on the other hand is de-centralized. Which means that the exchange of information must be observed and validated (approved) by everyone on the network. If the validation doesn’t happen, then, the transactions(exchange of information) will be invalid.
This change is the revolution. This brings transparency, authenticity and immutability to the network ; everything which was missing from “the internet”.
Now let’s see what a blockchain is. “Blockchain is a distributed, de-centralized, public ledger”. Nope, it’s not that difficult as this definition. Blockchain is literally just a chain of blocks. The blocks contains information about the various data transactions in the network and they are connected with each other through cryptographic chains.
That was easier to understand, right? But then what kind of information does the block hold? We know that blockchain is all about transactions and the blocks are a way to register these transactions. Suppose both of us are inside a blockchain network and we engage in a transaction. The block that records our transaction will have the date and time of the transaction, both our names (our names recorded in the block won’t be our actual names but would be our corresponding “digital singnatures”). It will also have information about what the transaction was all about. This block will be validated by other members present in the network and if they approve, it will be added to the rest of the blocks already inside the network. So in simple terms a block is an instance of a transaction.
As you can visualize the block now, imagine hashing the contents of the block using a hashing algorithm (SHA-256). But what the hell is this hashing? Don’t sweat your brows, hashing simply means that we are taking an input string of any length and giving out an output of a fixed length. The SHA-256 is an algorithm to achieve this. This is how the block exists in the network.
We have just discussed about a single transaction. But in reality a block can hold upto 1 MB of data. This means that a single block can house a few thousand transactions(depending on the size of each transactions).
This is just a basic introduction about blockchain. Let’s look into the working of blockchain and all it’s intricasies in the coming articles.
While reading about this revolution you may come face to face with some interesting words. Bitcoin, Ethereum, Hyperledger, smart contracts etc. I will explain what some of these means in the articles which will drop soon.