What is Blockchain?
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What you should know to take part in any blockchain-related technology or debates are as follow:
1)What is Blockchain?
2)Understanding SHA256 Hash(Algorithm currently used by Bitcoin )
4)Distributed P2P network(The Nonce)
5)How Mining Works (The Cryptographic Puzzle)
6)Consensus Protocol(Defence against Attackers, Competing chains)
What is Blockchain?
The blockchain is now one of the famous technology of the 21st century. Blockchain now serving mainly in the field of security and cryptocurrency. Initially, the Blockchain term explained by Stuart Haber and W. Scott Stornetta the year 1991 in his paper called “How To Timestamp Digital Document”.This Technology become a hot topic when Satoshi Nakamoto published a paper on the cryptography mailing list at metzdowd.com describing the bitcoin digital currency in the year 2008. It was titled “ Bitcoin: A Peer-to-Peer Electronic Cash System”.In January 2009, he released the first Bitcoin software that launched the network and the first units of the bitcoin cryptocurrency, called bitcoins.
Wikipedia gave a simple definition i.e. It is a growing list of records called blocks, which are linked and secured using cryptography. But it is much complex from the above definition.
Understanding SHA256 Hash
If you are coming from the CS/IT background you must have studied in your curriculum. Since it is very hard to explain the whole algorithm in a few lines but one can understand like everyone have fingerprints which can be used to identify a person, this same principle can be used to identify document also, using SHA256(Secure Hash Algorithm 256 ). It generated a unique hash code for documents that contains 64 characters, each character is 4 bit long since 64*4=256 bit memory space taken by this algorithm hence it is called a SHA256 hash algorithm. This algorithm is not used for just document it can be used for any file, media i.e. audio and video, executable file etc.
You can use other algorithms also but it should satisfy the following requirements.
4)The Avalanche Effect
5)Must Withstand Collisions
Suppose you want to buy a home, what you do you pay money and buy it but how you tell people that this property belongs to you. In exchange for money, you get a deed which proves that you are the owner. You have to take that deed to a government authority where you registered your home.
In the traditional ledger, we normally use written letters or some excel sheet to registered but it is not securable. Since if anyone hacked the government system than he easily can temper the data.
So if we use the blockchain since every block is linked with other hence if anyone tampered with one block it changes all the further block and one can easily detect that somebody hacked the system.
Hence Blockchain Called as Immutable Ledger.
Distributed P2P Network
To achieve more security blockchain uses a distributed network. The immutable ledger can be broken by a hacker if he calculated all the hash value for all the blocks then we never know that somebody tempers our data and the owner will lose their ownership plus all the data also be erased. In the distributed network all the blockchain is distributed over every computer and if one block updated than every block which is located on the .different computer must be changed. If hackers able to change data than all the computers have to update that change since hackers change only one computer we can compare from other computers and say that data was temper by someone.
so if a hacker wants to temper the data that he has to be temper at least more than 50% computer data since than when comparison took place than the hacker will win and all computers agreed on that changed data. It is next to impossible since it requires lots of computational power and practically it is not physible.
How Mining Works
Mining is the process of discovering or producing new bitcoin i.e. adding a block in the blockchain.
In terms of Bitcoin, it maintains a public ledger that contains past transactions, and mining is the process of adding a new transaction to this ledger. In mining, we had to guess the hash value of bitcoin and it has a range in which bitcoins hash value lie and we had a nonce value which can be used to mine new bitcoins since there are billions of hash value hence it require lots of computational power and electricity. We may pay around 5–6 lac rupees of the electricity bill for one day of the mining process. Mining requires a high power computer and more importantly LUCK.
In consensus protocol, we have certain checks before a new block or bitcoin added in the blockchain it verifies various check value if it passes from that then it will add the block. Hence any hacker tries to hack and try to mine using the malicious way it protects the blockchain.
In the case of competing for a chain, it is the most useful protocol. Competing chain means suppose two new blocks added simultaneously that which is to be added in all the computers. In this case, this protocol plays an important role. In this case, we have to consider a block which has the more computational power to generate hash value would be considered and that block will be added to all the computer and the other will be discarded.
Happy Machine Learning(Blockchain)