A turning point called Blockchain

In this article I am going to talk about basic concepts of blockchain technology. Blockchain is directing current internet and software applications into awesome and modern solutions. To understand this interesting field of IT, we need to understand some related concepts like peer to peer network, block, proof of work, etc. let’s quickly jump into details.

What is blockchain in simple words?

We can say a blockchain network is a distributed database or distributed ledger. The word ‘distributed’ emphasizes that there is no central server or organization or individual to handle this network. Blockchain is also referred to as peer to peer network in many contexts. Here we need to understand what peer to peer means in the technical world. Peer to peer network means that individuals connected to a network called peers are working with each other directly without centralized or trusted third party involvement.

A bit from history

People started to talk about blockchain after 2009 when Bitcoin was introduced by Satoshi Nakamota as a digital currency, so called cryptocurrency. But the concept of blockchain first coined in 1991 as a mechanism of time stamping digital documents in a secure way. But after 1991, blockchain was little downgraded as people did not consider integrating this technology into IT solutions. But in 2009, as mentioned above, Bitcoin, which can be considered as one of the most popular cryptocurrency, brought this awesome technology back onto the stage. In bitcoin, blockchain is used as the distributed database to record transactions. From then, people realize the amazing power of blockchain to change many areas of IT into better versions.

Let’s dive into bit deep in blockchain technology

As the name suggests, a blockchain network is a collection of components called blocks and they are connected with each other to make a chain. Blocks are the components which hold data of peers(individuals/ users) called as nodes in blockchain context. Every node of the blockchain owns a current copy of the entire network. When a new block is filled by data, it is validated and added to the blockchain. Whenever the blockchain is changed by a newly added block, this addition should be also visible to every copy that nodes are possessing. There are components called miners who validate the blocks in the blockchain by solving a complex mathematical formula where the process results in proof of work. Blockchain is considered as immutable as it is almost impossible to change blocks after we write data and add them to the chain. Below I have discussed two main key words related to blockchain.

Block

Inside a block there are two other parts except data as hash and hash of previous block.

• Data : it is the portion of information about what transaction happened, who are the parties involved without revealing real identities etc.
• Hash : the unique identifier to the current block which is calculated automatically when creating the block. This hashes are important when assuring the security of blockchain as whenever a block is changed somehow, the hash will be changed. This feature assures security and I will discuss that in the latter part of this blog.
• Hash of previous block : current block stores the hash of previous block to maintain the chain architecture.

Proof of work

Only with hash code, blockchain technology can’t assure the security. There need to be more parameters like proof of work. This can be considered as a mechanism to slow down the creation of new blocks. To calculate the proof of work for a block, it requires a considerable amount of time like 10 minutes and time depends on the particular blockchain. Miners calculate proof of work by solving a complex mathematical formula.

How to ensure the security of blockchain?

As above mentioned, every block has a hash that was calculated when the block was being created. Also all blocks keep the hash of the previous block. Another amazing feature is that whenever a block is changed, the hash of the block is recalculated into a new value. Then assume, somehow a hacker is changing into a corrupted value the second block is where the blockchain consists of 10 000 blocks. Now the hash of the second block is recalculated as it is changed. Now the next block which contains the previous hash of the second block does not keep the chain architecture as stored hashes are not matched. So the changed block can be easily identified by other nodes. Then we can argue that the hacker can change all blocks accordingly. It is true but the thing is that the hacker has to change at least 51% blocks from the blockchain until the majority gets the same invalid copy of the blockchain. This is very time and processor consuming as there are hundreds of thousands blocks. Not only do hash hackers need to change proof of work of all blocks after the altered block by him. Let’s say to calculate new proof of work, it takes 10 minutes. Then to change a blockchain with 10 000 blocks will require 100 000 minutes approximately 70 days. It is more than sufficient to understand there is a malfunction somewhere in the blockchain by other copy owners. These decentralized copies also provide a good level of security as if one person changes his copy, others can easily find the changed copy by comparing it with theirs.

Benefits of blockchain

1. Accuracy — all blocks are validated
2. Integrity — can’t change blocks as immutable and all maintain a copy of same blockchain
3. Privacy — no centralized server to maintain and store data. User owns their data
4. Security — very hard to hack or alter or corrupt data
5. Transparency — everybody can view changes happen to blockchain network as all gets a copy of current version of blockchain

Some usages of blockchain

• Blockchain is the backbone of cryptocurrencies where all transactions are recorded in blockchain. All the golden features offered by cryptocurrency such as immutability, transparency, security, privacy are supported by blockchain technology.
• Not only in cryptocurrency, blockchain plays the role of hero in the area of supply chain like IBM blockchain, healthcare like medicalchain, charity services like BitGive etc.
• Blockchain technology is one of the key ideas behind decentralized identity(DID) where DID documents that contain data such as public key, verification method to verify identity of an entity are recorded in blockchain.
• Blockchain is the superstar behind the web 3.0 where all Decentralized applications (Dapps) use blockchain networks to store and run the back end logic which is written as smart contracts.