November 29, 2018
Detailed Introduction of Blockchain
You must have heard work “Blockchain” on the internet or any media. In this article, we tell you what blockchain is and how a blockchain works.
What is Blockchain?
It is a revolutionary technology that has almost all ballots to simplify the future to companies, organizations, and people. We still cannot imagine how far we can go with it. Of course, we already know multiple uses that hope to be important in the coming months and years.
The blockchain is created from the union of several technologies that already existed. Blockchain allows transactions to be carried out safely and reliably. We can compare the chain of blocks with a distributed accounting book. Registers all transaction data without being able to delete or modify it. The transactions stored by the chain of blocks can be many and very diverse; contracts, property, data, etc.
The blockchain is a reliable system
The chain of blocks works through a system of interconnected nodes. These nodes are passed information continuously. Let’s see a bit what is its basic operation to better understand what blockchain is and what it is about:
Suppose a scheme like this, in which each circle is a node. Each node is continually checking the chain of blocks and verifying that all the content of the block is correct and has not been altered.
Actually, understanding what blockchain is and how its nodes work, is something more complex. A node can be hosted on any computer or mobile device distributed throughout the world and this is precisely what makes the system reliable.
All Blockchain nodes contain the same information
The nodes use a Peer to Peer or P2P communication, this means that the information is passed as follows: One node communicates with another node and, in turn, that node communicates with another node, which in turn, communicates with another and so throughout the entire network. All the information is passed from one node to another node until it is completely covered.
How are transactions created in Blockchain?
The entity that wants to insert data in one of the blocks, has an account with two keys; one public and one private, this is what is called asymmetric cryptography. With the private key, an account can enter data and generate transactions in the blockchain. With the public key, anyone can see the data that an account has created.
The blockchain is a secure system
A blockchain is made up of different chained blocks. You start with a block until it completes, closes and moves on to the next block. So on.
How is the last block in the chain closed?
In each block, you can store data or transactions, until it reaches its maximum. In the case of Bitcoin, the maximum is 1 mega and in the case of Ethereum, it will depend on the time and price of the gas.
In private blockchains like Multichain, it is possible to determine the size of the block when creating the chain.
When a block is filled with data, a code is created automatically. We could say that it is an identifier of each block. This identifier receives the “Hash” nomenclature and is always composed of 32 bytes of information.
Let’s go back for a moment to the chain of blocks we were looking at above:
The first block closes with the Hash X. At that time, the Hash X is included within the second block. When the second block closes, it will create a new Hash that will include the Hash information of the first block along with data such as a timestamp and block information. That second Hash will be passed to the third, which will do the same, and so on until the end of the Block Chain.
The calculation of the Hash takes into account the content of each block which means that if the data of a block were modified, it would change its Hash. With this security system, we could instantly notice that something abnormal has happened in one of the blocks.
All this is connected to a data structure called Merkle Tree, in which each block is labeled with the hash of the concatenation of the blocks.
Informative post shared by Michael who is business analyst at Fruxinfo Pvt. Ltd.