What is Blockchain?
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Loading... - Samira Vandi
- 01 Sep 2022
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Put simply, blockchain is data that’s stored and maintained by a decentralized network of computers. This is trustless technology which can radically change the world as we know it, redefining how we deal with data and transfer value. As an...
Blockchain has become one of the most often mentioned technologies in the past few years. It is best known as the technology that underpins Bitcoin, but it has many other use cases. It is also often followed by myths and misconceptions. In this guide, we will give a detailed explanation of everything you wanted to know about blockchain.
What is Blockchain?
A blockchain is a type of database, or a collection of information, stored in so-called blocks connected through complex cryptographic protocols. These make it almost impossible to compromise the data stored on the blockchain. This is because any changes to one block immediately corrupt the data in other blocks, so it’s obvious that someone has tried to change something. This makes blockchain tamper-evident. Previously recorded data can be updated but not retroactively changed. This means that all information can be traced thanks to a timestamp, checked again at any point, and can serve as a sort of digital fingerprint.
Blockchain has some other specifics that set it apart from other, more traditional databases. These are often considered the three pillars of blockchain.
The Pillars of Blockchain
Blockchain has three main characteristics:
1. Immutability
2. Decentralization
3. Transparency
These are the foundations of blockchain itself, but also the things that guarantee cryptocurrencies built with blockchains are safe. It is safe to say that you can’t really understand blockchain technology without understanding these principles. Let’s take a look at each of them.
1. Immutability
Immutability means that something cannot be changed once it has been created. This is the property of a block added to the blockchain: once it is part of the system, it cannot be modified further.
Immutability in the blockchain is achieved through a process called hashing. Hashing takes some data and gives a certain output called a checksum. Every time you hash the same data using the same algorithm, you will get the same result, which serves as a digital signature. The biggest advantage of hashing is that it cannot be reverse-engineered: you can’t take a hash and get the information used to produce that hash.
In a blockchain, the hash is produced using both the information from the block currently in use and the previous block in the chain. This links them together: if someone tries to change the data in one block, all the hashes change, making data in all other blocks unusable. Since the hashes aren’t valid anymore, the blockchain rejects the attempted change. Read More...
