If you think Bitcoin = Blockchain then you are wrong. Bitcoin is a platform that uses blockchain technology. Now you have got that blockchain is a technology.
Many people think that blockchain can not be hacked, but it can be hacked ?. Yes you heard right if more than 51% nodes agree on the same word.
History of blockchain:
The concept behind blockchain technology was described as early as 1991 when research scientists Stuart Haber and W. Scott Stornetta introduced a computationally practical solution for time-stamping digital documents so that they could not be backdated or tampered with.
In 1999, Nobel Prize Winning economist Milton Friedman said,
“the one thing that’s missing is a reliable e-cash, whereby on the internet you can transfer funds from A to B without A knowing B or B knowing A”
and that “it would be one of the major forces for reducing the role of government.” ?
10 years later, the Bitcoin blockchain was launched with the intention of becoming the future of money. Blockchain is an emerging technology which will change the way applications and users interact with the internet.
History of blockchain is a little confusing because there is no proper information about the founder or group of people who started using blockchain initially. The first practical example of blockchain is even more controversial as there is no exact information about the developer of this project. And the project as you guessed it, is Bitcoin. It is in 2008 Blockchain History starts to gain relevance, thanks to the work one person or group by the name Satoshi Nakamoto. It’s still a mystery whether Satoshi Nakamoto is an individual or group.
Satoshi Nakamoto is accredited as the brains behind blockchain technology. Very little is known about Nakamoto, who worked on Bitcoin, the first application of the digital ledger technology. Nakamoto conceptualized the first blockchain in 2008 from where the technology has evolved and found its way into many applications beyond cryptocurrencies. Satoshi Nakamoto released the first whitepaper about the technology in 2009.
Ever since Satoshi Nakamoto exited the scene and handed over Bitcoin development to other core developers, the digital ledger technology has evolved resulting in new applications that make up the blockchain History.
What is blockchain?
In the simplest terms, “ Blockchain can be described as a data structure that holds transactional records and while ensuring security, transparency, and decentralization “. You can also think of it as a chain or records stored in the forms of blocks which are controlled by no single authority. A blockchain is a distributed ledger that is completely open to any and everyone on the network. Once an information is stored on a blockchain, it is extremely difficult to change or alter it.
“ The blockchain is like a spreadsheet in the sky that all Nodes around the world will have a copy of ”. It is a technology with the potential of solving problems in every aspect of life. It’s not only limited to the financial transaction, numerous blockchain applications available in the market that are aiming to solve the real world problems.
Why blockchain is so special??
Decentralized
Blockchains are decentralized in nature meaning that no single person or group holds the authority of the overall network. While everybody in the network has the copy of the distributed ledger with them, no one can modify it on his or her own. This unique feature of blockchain allows transparency and security while giving power to the users.
Transparency
Transparency is the biggest advantage of blockchain. Any changes to public blockchains are publicly viewable by all parties creating transparency. All transactions are immutable, meaning they cannot be altered or deleted. Using an explorer, and equipped with a user’s public address, it is possible to view their holdings and the transactions that they have carried out.
Especially in finance domain, this level of transparency has never existed within systems before, and in regards to large businesses, it adds a degree of accountability that has not existed to date.
Immutable
The immutability property of a blockchain refers to the fact that any data once written on the blockchain cannot be changed. To understand immutability –
Consider the example of sending an email. Once you send an email to a bunch of people, you cannot take it back.
In order to find a way around, you’ll have to ask all the recipients to delete your email which is pretty tedious. This is how immutability works. Once the data has been processed, it cannot be altered or changed. In case of the blockchain, if you try to change the data of one block, you’ll have to change the entire blockchain following it as each block stores the hash of its preceding block. Change in one hash will lead to change in all the following hashes. It is extremely complicated for someone to change all the hashes as it requires a lot of computational power to do so. Hence, the data stored in a blockchain is not susceptible to alterations or hacker attacks due to immutability.
Hash — Providing authenticity
There are many cases where authenticity of data and documents is very important. Many organizations have very sensitive documents, assets, or contracts that need to be protected. Every piece of information on the blockchain is hashed cryptographically. In simple terms, the information on the network hides the true nature of the data. A hash is like the fingerprint for this process, any input data gets through an algorithm that produces a different kind of value, but the length is always fixed.
Importance of hashing
Impossible to produce the same hash value for differing inputs:
This is important because if it were not the case it would be impossible to keep track of the authenticity of inputs.
The same message will always produce the same hash value: The importance of this is similar to the prior point.
Quick to produce a hash for any given message:
The system would not be efficient or provide value otherwise.
Impossible to determine input based on hash value:
This is one of the foremost aspects and qualities of hashing and securing data.
Even the slightest change to an input completely alters the hash:
This is also a matter of security. If a slight change only made a slight difference it would be considerably easier to work out what the input was. The better and more complex the hashing algorithm, the larger the impact of changing an input will be on what the output is.
Peer-to-Peer Network
With the use of Blockchain, the interaction between two parties through a peer-to-peer model is easily accomplished without the requirement of any third party.
Blockchain uses P2P protocol which allows all the network participants to hold an identical copy of transactions, enabling approval through a machine consensus. For example, if you wish to make any transaction from one part of the world to another, you can do that with blockchain all by yourself within a few seconds. Moreover, any interruptions or extra charges will not be deducted in the transfer.
How blockchain can transform the world?
Blockchain technologies will improve trust in industries where information (assets) is transferred, including these:
Blockchain technologies will change everything — from clothes you wear, the food you eat and even the products you buy.