This article is purely focused on providing an conceptual understanding about blockchain technology
This article is divided into three section
- History of blockchain technology
- How it work’s
History of Blockchain technology
It all started by a paper published i 2008 by an anonymous person or group Satoshi Nakamoto titled Bitcoin .The paper describes a peer to peer electronic currency which is based on Blockchain technology named bitcoin.This was the first public implementation of blockchain based technology.
How it works
By definition blockchain is decentralized in nature i.e any thing which is which is built on top of it is not controlled by any centralized body but that does not mean the data flow or transaction happening on it are not secured .
Now the question is what does decentralized even mean?
To answer this you need to understand types of architecture using which nodes in a network are connected,the three most popular are
Centralized:In centralized architecture,the nodes are connected to a single entity or system or server and all the decision are taken by central authority ,most architecture or organizations present are somewhat based on this architecture.
Decentralized:In this type of architecture every node has equal participation in network and decision over the network can only be taken by a majority of nodes only rather than a single node or authority.
Let’s understand blockchain in context of electronic money, lets take a example of email as one e-money
So, to do a transaction both party will exchange some e-money from what they have ,but there is problem with this system as we know every one on earth can generate infinite amount of e-money and by doing that it means every one has infinite amount of e-money which is not applicable as a currency .
So,we need to modify this , Let’s have a digital ledger can be called as a block on which all the initial values of the e-money of each node in a network is written and if now any new transaction happens then it will be written down on a new block and will be appended with previous block.So after some ‘N’ transaction there will be a chain of blocks ,now you can guess why this is called a block chain.
There are some properties which these chain of blocks aka ledger have ,
- The data inside these blocks is immutable i.e data can only be added to these blocks it cannot be changed
- the validity of transaction is depend upon the nodes coming to a common decision ,this is done by solving a math problem and who ever solves this math problem gets some credit in form of e-money and approval to write on the block.The difficulty of the math problem is directly proportional to the number of nodes in the network.
- This chain of blocks does not reside on a centralized server or system.
Blockchain is future technology ,and the combination of Artificial intelligence and blockchain can be the most important break through in technology.We will be covering many such exciting topics in future so stay connected to LearncodeOnline.