What is the Blockchain?

To most people it sounds like a far out

concept but once they realize the technology behind it and the potential implementations most are completely mind blown.

In order to understand the Block Chain you need to know a little bit of the story behind Bitcoin, the original cryptocurrency. Bitcoin was created by a person or an entity who wished to remain anonymous, this entity called itself Satoshi Nakamoto (for the purpose of this blog I will be referring to Satoshi as a he). Satoshi was a true believer of a decentralized world. Like many others he noticed that centralized power can be cause for corruption, greed, and abuse as can be seen in today's governments, banks and other centralized institutions around the world.

Unlike everyone else who saw this as a lost war versus the powers that be, Satoshi was not to be defeated and set out to start a new revolution a digital revolution. Something that gives the power back to the people, something that is decentralized peer to peer operated with no middle men that no one can mess with and is controlled by everybody and nobody at the same time. BITCOIN & the BLOCKCHAIN. I may have forgot to mention, Satoshi was or is a genius programmer/coder.

Block Chain- Software/Code

Bitcoin- The first Application Built on the blockchain or the first chain of blocks to be introduced (Digital Cryptocurrency)

How does the blockchain work?

Like the name indicates, blockchain is an encrypted linked chain of data blocks. This technique was originally described in 1991 by a group of researchers and was intended to time stamp digital documents in order to make it impossible to back date them or to tamper with them something similar to a notary. However it went by mostly unused or unnoticed until it was adapted by Satoshi in 2009. Satoshi took this idea to the next level and put it to practice.

The blockchain can be considered a digital ledger with unique attributes one of the major ones being that once information is recorded by the network it becomes virtually impossible to change or tamper with.

The Network:

Nodes- A peer to peer decentralized computer network in wish each computer runs software which keeps a copy of the blockchain and confirms with other computers or other nodes that the block chain is correct and has not been tampered with.

Other key roles in the block chain ecosystem:

Miners-People who use computing power to solve the mathematical equation in order to confirm transactions and get rewarded.

People- The rebels that believe this is a great technology and a viable way to conduct peer to peer transactions lower fees and cut out middle men, basically the people that use it.

The blockchain itself

Now to understand how a digital data block works you need to know what a digital hash is. A digital hash is a cryptographic hash function that takes an input or message and returns a fixed sized alphanumeric string known as the hash value. In simpler terms it takes a message and encrypts it then spits out a whole bunch of random number and letters that is then used as the key or password to get back to that message.

Each Block contains the hash of the previous block, some data and its own hash. The hash act as a fingerprint that identifies the block and all of its data and it’s always unique. The data that is stored inside the block depends on the type of block chain which are coded with certain rules at inception. Bitcoin was meant to be the first digital currency, the data Bitcoins blocks contains are

FROM:

TO:

AMOUNT:

Once a block is created its hash has been calculated, changing something inside the block will cause the hash to change so it makes it impossible if not close to impossible to change the data in the block. If the finger print of the block changes, it no longer is the same block. The Block also contains the original hash of the previous block, so if some bad apples try to change the previous block the current block will know because it has the original hash thus making it a chain of blocks filled with encrypted data.

Keep in mind the first block it’s a bit special because it creates the first hash, this is called the genesis block.

But with the sophisticated hacking now a days, using hash function is not enough to keep your currency and your private data safe. Hackers have bots that can figure out the current hash and all the previous hashes and make a copy of the block chain. To stop this from happening blockchains come with an implementation called proof of work. It’s a mechanism that slows down the creation of new blocks. In the example of Bitcoin it takes an average of 10 mins to calculate a new proof of work for a block to be created.

This makes it very difficult to tamper with the linked blocks because you would then have to calculate each blocks proof of work.

So is Bitcoin secure enough with hash functions and proof or work? Satoshi did not think so. Block chains use another layer of security which comes from being distributed or decentralized. Instead of using a central entity to manage the chain block chains use a peer to peer network and everybody can join. When someone joins this network they or their computer becomes a node. They download a copy of the block chain and interact with each other constantly checking that the block chain is still in order.

When a new block is created a copy of that block is sent to everyone on the network. Each node verifies the block to make sure it has not been tampered with and if the block checks out then the node will add it to its block chain. All the nodes in this network create consensus. They have to come to an agreement of what blocks are valid and which are not. Which also tackles the human trust issue, a person doesn't have to trust the next person and they just have to trust the code and the consensus of the network. Blocks that are tampered with will be automatically rejected by nodes in the network.

So in order to even have a chance of tampering with the blockchain you would have to generate the hash of the current block and all the previous blocks + Generate the proof of work for the current block and all the previous blocks+ take control of at least 51% of the peer to peer network. Which is virtually impossible to do.

In Conclusion

We believe blockchain technology has started a revolution and it is here to stay. It’s a no brainier in many industries. There are companies using this new technology to try to solve major problems in huge industries. We personally believe in the blockchain technology and would compare it to the invention of the internet. No one knew where the internet was going to take us and a lot of dot com companies went bust but the underlying technology of the internet has brought people together and created immense technology growth and growth in every industry. We believe the blockchain is the new internet.

We hope this article helped you better understand the blockchain. If you want to become a part of the cryptocurrency community be sure to subscribe to our page and keep up to date with cryptocurrency news and updates. www.cryptocurrency.com

Watch our "What Is Block Chain? Video below