what is blockchain

Introduction

Nowadays, the majority of individuals are acquainted with Bitcoin and other digital currencies, which operate on blockchain technology. Bitcoin represents a novel form of currency rooted in blockchain technology. Digital currencies and the concept of Web3 are intertwined with blockchain technology. To gain a deeper understanding of these developments, familiarity with the concept of blockchain is essential. The evolution of the internet towards a decentralized paradigm demands comprehension of blockchain principles to grasp this transformative revolution.

To understand blockchain concept better, depict this scenario :

Imagine you're in a room with several other individuals, each equipped with a notebook. In these notebooks, everyone diligently records their own purchases and sales, as well as those of others. Whenever someone makes a purchase, they and the others present jot down the transaction amount, along with the names of the buyer and seller, in their respective notebooks.

It's important to mention that the individuals in the room are unaware of each other's identities. They wear masks that fully covers their faces, each adorned with a distinct combination of 48 letters and numbers. These combinations are unique to each person and do not repeat. They recognize one another solely by these unique 48-character combinations.

Consider a scenario where someone in a room aims to cheat; it appears highly improbable. This is because everyone in the room diligently records all transactions. Even if one person alters their record, they cannot modify those of others. As a result, any attempt at deceit becomes evident, leading to the individual being ousted from the room and losing trust in their words and records. Consequently, we established a space characterized by openness where participants remain anonymous, yet everything is accessible to all transparently.

It's time to envision your space on a grander scale, extending it into a vast world where occupants are esteemed as reliable and principled individuals across the globe. As the community grows, so does the level of surveillance to safeguard everyone's interests. Each person not only upholds their own transparency, individuals also oversee the transparency of others. Through mutual support and collaboration, the community ensures its proper functioning and integrity.

This is essentially the essence of blockchain technology. Think of each page in a notebook as a block, and every individual in the room and beyond contributes to forming the chain. Through this combination, blockchain is emerged. As a ledger, blockchain digitally records all transactions in a transparent and tamper-proof manner on servers.

Anyone with access to the blockchain—essentially, anyone who maintains a notebook (server) and joins the community (chain)—can view all transactions. Blockchain employs cryptographic techniques for security, ensuring that transactions cannot be altered without the consent of others. It's an emerging technology with transformative potential, poised to revolutionize various aspects of our world.

Now that we've gained a basic understanding of blockchain and its operational principles from the example provided, it's time to delve deeper into the subject and explore emerging concepts that are likely to garner increased attention in the future.

As previously discussed, blockchain essentially consists of a sequence of blocks containing data, with each block comprising the following components

• Information about the block (Data)

• Block hash

• The previous block hash

You might be facing the concept of "hash" for the first time. Therefore, in the following section, we'll provide a simple and concise explanation of this topic.

A hash serves as a unique fingerprint for data, much like how individuals have distinct fingerprints irrespective of their physical characteristics such as skin color, hairstyle, weight, and height. Information can be likened to a fingerprint or hash generated by a hash function.

Blocks contain diverse sets of information, for instance they might hold financial transactions within a system or various other data. As a matter of fact, various blockchain applications emerge depending on the content stored in the blocks and other factors.

Just as when a page in a notebook is filled with information and we move to a new page, in blockchain blocks, once they're filled, it's essential to transition to the next block or a fresh page where new data can be recorded. However, how can we ensure that after advancing 200 pages or blocks, no one will tamper with the information on any of those pages or blocks?

We utilize hashing to prevent alterations to data. Hashing is employed to maintain data integrity by preventing alterations. Every block contains a unique fingerprint or hash derived from its content. When a new block is generated, the hash of the current block is embedded into the next block.

Considering this, even if all the information stored in the two blocks is the same, because the hash of the previous block has been added to this information, the hash that is created now is different from the previous block; In addition to the information, the fingerprint of the previous block is also added to the new information, which changes the hash and prevents the creation of duplicate hashes.

Consider a scenario where 100 blocks have been generated. Now, if an individual decides to modify block number 53, altering its information will result in a change in the block's fingerprint or hash. As the hash of this block is embedded in the succeeding block, any alteration to it will cause a ripple effect, changing the hash of the subsequent block. This cascade of changes will persist until the very last block, the 100th one.

As different participants have generated additional hashes within this blockchain, they promptly detect any attempt by an individual to manipulate information. Therefore, manipulating the blockchain becomes practically impossible due to the swift detection of information alterations by other participants.

Furthermore, due to transparency, if anyone else changes, you will also notice the changes. This makes it virtually impossible to modify the blockchain without attracting the attention of others. Even if someone attempts to change the information, it will not be accepted by other participants. In the blockchain, nodes play a crucial role in verifying transaction accuracy and safeguarding the blockchain against alterations. Nodes represent a fundamental concept in blockchain technology, which we will delve into further later on.