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Blockchain 101

Building a Transparent Future with Blockchain

Stuart Haber and W. Scott Stornetta published a Paper called “How to Time-Stamp a Digital Document “ which essentially has most of the features and ideas of today's blockchain are present in that paper.

A general definition can be given as:

"A blockchain is a continuously growing list of records, known as blocks, that are linked and secured using cryptography."                                                                                                                                                                                                                                      

-Wikipedia

Which was later used into Bitcoin Ethereum and unfortunately “THE DARK WEB”

Satoshi Nakamoto is the individual or group credited with creating the original implementation of Bitcoin, the first decentralized cryptocurrency. Bitcoin's success led to the development of numerous other cryptocurrencies. These digital currencies are fully encrypted and widely used worldwide. 


In the context of cryptocurrencies, mining is the process of solving complex cryptographic puzzles to validate and add new transactions to the blockchain. Miners compete to find the correct hash value that meets specific criteria. Once a miner successfully finds the solution, they add a new block to the blockchain and are rewarded with newly minted coins or transaction fees.

Let's continue reading to gain a basic and clear understanding of Blockchain and blocks.

what consists of a block?

It has a DATA of course, PREVIOUS HASH which is kind of “from address” or where it stands and HASH which is the encrypted data.

basic-block

 

In a blockchain, there are three key elements within each block:  
1. Data: This represents the information contained within the block. It can encompass various types of digital records or transaction data.  
2. Previous Hash: The previous hash serves as a reference point, indicating the address or position of the preceding block in the blockchain sequence.  
3. Hash: The hash is the encrypted representation of the block's data. It ensures the security and integrity of the information stored within the block.

The mentioned block is the very first block in the blockchain, known as the Genesis block. It stands alone without any preceding blocks. Once created, this block remains unchanged and maintains its position as the initial block throughout the entire lifespan of the blockchain. No other block can take its place. It serves as the starting point from which all other blocks originate.

Genesis Block

 

genesis-block

 

The Genesis block is the initial block in a blockchain, marking the beginning of the entire chain. It is the first block ever created and serves as the foundation for the subsequent blocks in the blockchain. The Genesis block is unique and remains unchangeable, acting as a reference point for the entire blockchain's history. The chaining of the blocks which makes it cryptographically linked called as Blockchain.

Hash Cryptography

 Is a cryptographic technique that takes input data and generates a unique fixed-length string of characters, known as a hash. This hash is a digital fingerprint of the input data and is designed to be irreversible, meaning it cannot be converted back into the original data. Hash functions are widely used in blockchain technology and digital security systems to ensure data integrity, verify authenticity, and protect against tampering.

hash-crypto

 

As you can see in the block number two which has the following data “I am the second block” which is having a hash value which represents the block .A change in the main data itself will cause avalanche effect.

 

hash-crypto

 

As you can see, we have this chain of values depends on the hash and previous hash which represents them. if someone tampers the data the position itself will get changes and there is a very less chance of data getting tampered. which we will see now …

The hash represents 64-character x 4 bits= 256 bits thus named as Secure Hash Algorithm 256(SHA256).

Try Here as you can see when you change a single character entire hash is changed thus called as avalanche effect.

 

Immutable ledger

Let’s say you bought a house near marina beach with pool and the document is submitted to the village government building and you also have a copy of the record. That is the only proof that the house belongs to you.

Traditional ledger

 

traditional-ledger

If someone comes and takes all the resources to tamper the data with your mutable ledger and makes it all his property there is no history no paper trail to prove it. YOU LOST.

Immutable ledger

immutable-ledger

 

As per above image you can see that the on the following block the attacker attacked the block and changed the data which is reflected to progressive blocks. we can track what happened and can be reverted

 

P2P network

p2p-network

As you can the above is a decent description of the P2P network Rules: 

  • The exact same iteration of data is spread out to all system.
  • They all are in synchronously connected.

When the data is tampered as you can see above the data is changed to “1”. In machine 1. When other machines talk to the “machine 1” they all finds out the data is not proper in block 1 and all the machines start to create a voting kind of decision that who all has the data as “1” and who all has the data as “3”.

As per the voting the 3 wins which makes that the 3 is the original data and the “machine 1 block 1” is overridden. the data will be in thousands of systems which makes it practically unbreakable.

CONSENSUS PROTOCOL

The above voting system is called the consensus protocol which helps in keeping balance in the p2p environment and this protocol makes the data not getting tampered.

This protocol is kind of the heart of this system which takes care of the decision which data is the right to begin with.

Then the data is then balanced and every thing is back to normal.
 

consensus-protocol

 

 

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