As the name conveys, Blockchain is the chain of blocks that store information. It’s almost impossible to tamper with data stored in a Blockchain. Satoshi Nakamoto first used blockchain technology to create a digital cryptocurrency, “Bitcoin.”
Definition of Blockchain?
Blockchain is a type of database, or it is a distributed ledger technology.
Blockchain has rules for how data can be added, and once the data has been kept, it’s almost impossible to change or delete it.
Data is added in blocks. Each block is created on top of the last and contains information that links to the previous one. By continuing this, the “Chain” of blocks is made. Looking at the top block, we can check that it is created from the previous block, and so on, we can reach the first block called “genesis block.”
The genesis block is the block that does not have any previous block link.
What are Blocks?
Block is a unit used to store data, hash (hash is the unique hexadecimal number to identify the block like a human’s fingerprint) and previous block hash.
For example, the Bitcoin block stores the receiver, sender, and transaction amount information.
Let’s take an example to explain it in a better way.
Consider an example of 3 blocks that are connected to each other. The first block is the genesis block which does not have a previous block hash.
The second block is connected to the first block having the first block hash, and the third block is connected to the second block.
If someone wants to change the data in a block, then the corresponding hash changes by changing the data.
But, in the technology world computers are so fast to change hundreds of hash of blocks within seconds. To avoid this attack, “Consensus” came into existence.
Consensus:
In Blockchain, contributions come from all the participated nodes in the network to run the chain properly.
Consensus mechanisms help guarantee that all nodes on a network are synchronized and transactions are legitimate. In easy words, the Consensus Model means this is the procedure we will use to make everyone agree on something.
Different types of consensus mechanisms are available:
- Proof Of Work
- Proof Of Stake
- Delegated Proof of Stack
- Proof of Identity
- Proof of Capacity
- Proof of Elapsed Time
“Proof Of Stake” and “Proof Of Work” are widely used consensus in Web3.
What is Proof Of Work?
A proof-of-work is a computational problem that needs to be solved and then verified to make the changes in the block. This process takes approx 10 minutes in the case of Bitcoin.
If Anyone wants to change the data in block 2, he/she must solve the Proof of work; it takes 10 minutes, and then solves the Proof of work for block 3, again it will take 10 minutes, and so on for all succeeding blocks.
Another Blockchain method to secure data is the “Distributed peer-to-peer Network.”
Everyone is allowed to join the network. When someone enters this network, he/she will get the full copy of the Blockchain. Each computer (that joins the network) is called a node.
If someone or any node creates a block, this new block will send to all other nodes to verify and make a note that the block hasn’t been altered.
All nodes in the network create a consensus and must agree on tempered blocks. Otherwise, nodes in the network will reject blocks that are meddled with.
So, to successfully change the data in a blockchain,
- You will need to change the data in all blocks on the chain
- Do the proof-of-work for all blocks
- Almost take more than 50% of control of the peer-to-peer network.
After doing all these, your altered block becomes accepted by everyone else in the chain. This is next to an impossible task. Thus, Blockchains are so secure.
What is Proof of stake?
A mechanism that uses validators to consensus the chain. In the ethereum network, the validator must stake 32 ETH to run the Proof Of Stake mechanism. Unlike Proof Of Work, Energy consumption is deficient because the validator selection is random and not computational. They are not mining blocks. They need to create blocks when selected as a validator. This validation is called “Attesting.” The validator gets a reward for proposing a new block and for attesting to ones they have seen. If attested blocks are malicious, then the validator loses stake.
