Blockchain - They are digital databases, where the data is stored within blocks which are connected with one another forming a chain (Reminds me of Linked List). So, in recent days we are hearing a lot about financial threats and lack of security paving way for hackers to access our system which can be a huge threat.
So, inorder to ensure that data tampering becomes nearly impossible - we have got blockchain. The recorded transactions are stored in blocks which are interconnected with one another.
What it is exactly?
Blockchain as defined earlier is a digital database, handling digital transactions with high level security. So, they are blocks which are connected in a chain. The main thing is that this data is immutable, i.e once the data is stored in the blocks, it can't be changed or modified.
This is achieved because the blocks act as nodes of a linked list, where a node is dependant on the node before and after it. So, if we alter it then it may break the whole chain structure.
Each block contains crucial data, such as a list of transactions, a timestamp, and a unique identifier called a cryptographic hash. This hash is generated from the block's contents and the hash of the previous block, ensuring that each block is tightly connected to the one before it.
Decentralization
Blockchain is not centrally managed by a separate server to manage, monitor and handle the data, instead they are spread across several computers which are connected. This allows transparency since its publicly visible to all nodes in the network.
This ensures that no single network can hack into it, if an attempt is made to modify a record at one instance of the database, the other nodes will thwart this action by comparing block hashes. Consequently, no individual node within the network possesses the capability to alter information contained within the chain.
Main Components :
Distributed Ledger - Blockchain is a shared record system spread across many computers, with each participant having a copy. Once data is added, it can't be changed or deleted, ensuring no single point of failure or control.
Blocks - Data is stored in blocks, each containing a set of transactions, a timestamp, and a reference (hash) to the previous block. This creates a secure, linked chain of blocks, where any change would disrupt the chain.
Nodes (Peer-to-Peer Network) - Nodes are the devices in the network that store the blockchain and validate new transactions. They communicate directly, ensuring the blockchain remains decentralized and operates without a central authority.
Advantages :
Decentralization: The decentralized nature of blockchain technology eliminates the need for intermediaries, reducing costs and increasing transparency.
Security: Transactions on a blockchain are secured through cryptography, making them virtually immune to hacking and fraud.
Transparency: Blockchain technology allows all parties in a transaction to have access to the same information, increasing transparency and reducing the potential for disputes.
Efficiency: Transactions on a blockchain can be processed quickly and efficiently, reducing the time and cost associated with traditional transactions.
Trust: The transparent and secure nature of blockchain technology can help to build trust between parties in a transaction.
Reference - geeksforgeeks, tutorialspoint
Top comments (0)