Blockchain Explained – For Beginners (2)
Let's now delve a little bit more deeply into a single block's structure. Take a look at a Bitcoin block, for instance.
Blocks in a Blockchain's Structure:
It's now interesting what appears inside the blocks. Block headers, or the information of a block and the contents to be stored, are included in a single block (which in the case of bitcoin are the transactions).
A hash is a lengthy string that is 256 bits in length and is created cryptographically. Any slight alteration to the data will significantly alter the hash. It functions much like a digital sign. There are several hashing algorithms, however SHA256 is the one used by cryptocurrencies.
Let's now examine the various parts of the block header.
Previous hash - You should be aware that every block in the blockchain is linked to the one before it, making it much harder to change the contents. As a result, each block contains the hash of the preceding block, and each block's hash must be updated if any of the data in the chain is modified.
Difficulty target - The PoW agreement must be ensured in this sector. Consensus techniques come in a variety of forms, but PoW is the most well-known since it powers Bitcoin. To reach the aim, the miner must use a lot of processing power and time. The rivalry amongst the miners is to be the first to attain the objective and have his block validated.
Timestamp - As is evident from the name, this column provides information on the date and time the block was produced.
Merkle Root - This represents the hash value for all transactions together. The process is known as the Merkle tree, and it involves turning every transaction's data into a hash and then combining those hashes to create a single, root hash that takes up the least amount of space in the block.
Nonce - This is a random hash that was generated by miners to match the difficulty. The difficulty level is satisfied by the hash as long as the miners keep adding a random number to it. Their powerful computers do this computation. And the nonce is placed in the block together with the number that fulfils the difficulty level.
Again, these subjects constitute the whole subject. And I won't delve too deeply into these issues. A version number is also included in the block to indicate which version of the blockchain is being utilised. As I already stated, this technology is a whole other topic. And I'll simply offer you a rudimentary grasp. You now understand what is included within a block and how a miner does computations in order to add that block to the chain.
You also have an idea about how blockchain is secured from data manipulation. As every Block is connected to the previous block, if anyone alters any data then they have to change the hash of every following block, which will require a lot of time and effort. Even if they manage to do so the challenge is not over yet. After using a lot of computational power and spending a lot of time let’s say they changed the hash of every single following block. As the blockchain is stored in every computer on the network other nodes will identify that chain as altered and won’t add any block to that means that chain is of no use because everyone has an authentic copy of the blockchain. To overcome this problem that person would need to gain the 51% trust of the network which is you know near to impossible. This is how Blockchain is secured even after the public has all the control. Now Let’s Talk about the types of blockchain.
Types of blockchain:
There are two forms of blockchain:
● public blockchain,
● private blockchain.
however there are two more variations:
● consortium blockchain,
● hybrid blockchain.
I will not get into the Consortium and Hybrid blockchains; instead, we will learn about the Public and Private blockchains, which are more extensively utilised and popular.
The Public Blockchain:
Public blockchains are permissionless blockchains, which means that anybody may join the network, do network maintenance, and collect rewards. The network cannot be controlled by a single authority. The whole blockchain network is based on a consensus process, in which everyone can participate. Bitcoin is now the largest public blockchain. Ethereum is yet another well-known and big public Blockchain.
The Private Blockchain:
Although it may appear unusual, private blockchains are centralised. Because they are authorised and managed by a single authority. No one is given authorization to view the blockchain at random. Only authorised nodes may access and mine the blockchain, making it quicker than the public blockchain because there is less traffic in the network due to the smaller number of nodes.
One of the most well-known private blockchains is Hyperledger from the Linux Foundation.
Some Important Considerations for Public and Private Blockchain:
● Both blockchains are appending only ledgers, which means that data can only be added to the network and cannot be changed afterwards.
● Both Blockchains rely on a large number of users to make changes to the network.
● Every network participant has a complete duplicate of the ledger in both blockchains.
● Private blockchains scale better than public blockchains.
● Private blockchain consumes less energy than public blockchain.
Finally, you have a thorough understanding of Blockchain and may be considering its applications. As I previously stated, there are applications other than cryptocurrencies.
Blockchain Use Cases:
International Payments - Because blockchain decreases the number of intermediaries and makes the process more efficient, international payments become less expensive.
Supply Chain - The supply chain includes all of the operations performed by a firm or organisation in order to give a product to a consumer. It includes all of the procedures involved in manufacturing, transporting, and eventually reaching the customer. In today's world, the supply chain system is insufficient and incompatible. This is rather slow and prone to errors. As a result, blockchain may be integrated in this procedure, which will speed up the process. Additionally, because blockchain is immutable and transparent, there is no risk of data tampering.
Healthcare sector - Blockchain has huge potential in the healthcare industry. Because it may save patients' health information and share it with other institutions for better treatment. In addition, the data will remain safe and unchangeable. Estonia is the first country in the world to completely integrate blockchain technology in healthcare. Some successful firms in this industry include Chronicled, Medical Chain, Block Pharma, and many others.
Public identity record - Identity theft is on the rise, and it is becoming a concern for all of us. Blockchain technology has the potential to solve this problem by recording all public data, such as an individual's identification, health information, birth certificate, death certificate, marital status, company licence, criminal activity, and many other things. This will keep the data more secure than before since there will be a network of individuals checking the data and any modification will require network approval.
Voting system - Voting is now done using electronic machines, which are subject to any type of danger, attack, or malfunction. We can safeguard this vote data with blockchain since it will be distributed over the network and cannot be modified or interfered with.
This is not enough….
There are several other applications for blockchain. People are still discovering and creating new ideas using blockchain because it is a fresh rising revolution in the entire planet.
Summary: So, Blockchain is a distributed digital record of data that is maintained by a network of people rather than a single authority. The data is saved in every system on the network, not just one server. Blockchain is a decentralised, append-only ledger. The people that keep the network running will be automatically rewarded. And all of these procedures are based on the applied consensus method, which prevents data tampering and ensures data security.
So you now understand what blockchain is. When and why will Blockchain arrive? How does blockchain operate? How is Blockchain protected? Also included are various blockchain application cases.
That concludes my first Blockchain Blog. I hope that was clear :)
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