Blockchain technology is a cutting-edge idea that was first conceived by a person or group going by the name of Satoshi Nakamoto. It was proposed in 2008 and in 2009; the idea was implemented as a key proponent upon which Bitcoin works. The blockchain uses the system of cryptography to record and secure all transactions. The blockchain is a linked continuous formation of data that are timestamped and recorded in blocks. It’s a public distributed ledger that holds digital records. Once records are entered, the system cannot be manipulated as everything is timestamped and distributed. The whole system is managed and controlled by a peer to peer network (user to user) under a prescribed protocol.
The blockchain concept is similar to Google Docs. The obsolete way of sharing document requires you to forward it to another party and wait for a revised copy. But with Google docs, two users can have access to the same document simultaneously. Every piece of information is shared concurrently. The same goes for blockchain, anyone with an internet connection can use it but nobody owns it.
Blockchain by its design is a decentralized network. This is the basis upon which all cryptocurrencies function. Data stored in the blockchain network has no central location or authority. No one is vested with the power to control the network. This is where the idea of peer to peer network comes into play. Once a transaction is completed, it will be distributed across every node in the network and it’s irreversible. Every node in a blockchain network has a copy of the blockchain.
One of the greatest advantages of blockchain technology is its resistance to manipulation. The decentralization of the blockchain has made it difficult for the system to be compromised. No single entity or node in a blockchain network has a centralized data that can be breached by hackers. Altering a data in a blockchain network will amount to overriding the whole computing network which is practically impossible.
- Transparency and accountability
The blockchain technology is a revolutionary idea that bred the highest level of transparency and accountability in the realm of financial transactions. Every transaction that happens within a blockchain is usually recorded on each block and the records will be broadcasted across a network of nodes. Every node has an equal authority in a blockchain network. The task of each node is to validate and broadcast transactions. Nodes are simply a network of computers who join the network voluntarily. The rewards for nodes are contingent upon solving complex mathematical problems. Cryptocurrency tokens are awarded to every node that solves the puzzles. This process is called “mining.”
- Blockchain security
Blockchain uses the system of cryptography to secure the network. Public key cryptography consists of a collection of random numbers that functions as an address on the blockchain. Public key can be made available to the general public. It’s just an address via which tokens can be sent across. Private keys are discreet and are only known to its owners. Private keys are more like passwords that provide owners’ access to their digital assets.
Below are an introductory two-minute video and a two-hour course for a more detailed explanation. You will also not want to miss the fourth video about the nineteen industries blockchain will disrupt.