What is Blockchain (Super Detailed)

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When learning the [blockchain] , it is essential to first understand its essence. Through the following modules, you will understand what the blockchain is.

  1. what is blockchain
  2. How the blockchain works
  3. What is the value of blockchain
  4. How Blockchain is Classified
  5. What are the advantages and disadvantages of blockchain
  6. What is the relationship between blockchain and bitcoin

  7. What is blockchain

Blockchain (Blockchain) is a term in the field of information technology that cleverly combines and integrates mathematics,
 Technical expertise in many areas including cryptography, the Internet and computer programming.

In layman’s terms: Blockchain is a distributed shared ledger or database, and the data or information stored in it has the characteristics of decentralization and immutability .

2. How the blockchain works

The “blocks” of a blockchain are similar to the hard drives we use to store data. Each block is where the information on the blockchain is stored. Encryption through cryptography technology ensures that these stored information data cannot be tampered with.

The blockchain system examines all data generated during the period, such as transaction records and records of when the block was edited or created, and stores this data on a new block. This block will be connected with the previous block, and each block must contain the relevant information of the previous block to take effect, thus forming a chain, so it is called “blockchain”.

To run and independently verify the state of the blockchain, users must download specific wallet software. Once the software is launched, it connects to other computing devices in the blockchain network for the purpose of uploading or downloading information (eg, transactions, blocks). The software will download the block data one by one, check its authenticity, and then broadcast the verified relevant information to other computing devices. As a result, we have a blockchain ecosystem consisting of hundreds or even tens of thousands of computing devices. These computing devices are called “nodes”, all run the same software, and simultaneously update and broadcast transaction data synchronously with each other, realizing the real [and]. The software will download the block data one by one, check its authenticity, and then broadcast the verified relevant information to other computing devices. As a result, we have a blockchain ecosystem consisting of hundreds or even tens of thousands of computing devices. These computing devices are called “nodes”, all run the same software, and simultaneously update and broadcast transaction data synchronously with each other, realizing the real [and] decentralized characteristics of blockchain data. 

  1. What is the value of blockchain

Blockchain builds trust because it represents a shared record of truth. Data that everyone can trust will help drive the development of other new technologies, and will greatly increase the efficiency, transparency and trust of working with each other.

In addition, the applications of blockchain include: medical care, finance, games, cryptocurrencies, Internet of Things, securities , etc.

  1. How the blockchain is classified

Blockchain can be divided into: private chain, public chain, alliance chain according to different occasions

Public chain:

A public blockchain is one that anyone can join and participate in, such as Bitcoin.
Disadvantages may include: most public chain systems require high hardware resources to ensure security,
Transactions have little or no privacy at all. And these are important considerations for blockchain enterprise use cases.

Private chain:

A private blockchain network is similar to a public blockchain network and is a decentralized peer-to-peer network, with the notable differences being,
The entire network of a private blockchain is managed by one organization. The organization has full authority to control who is allowed to participate in and maintain the blockchain network.
Depending on usage, trust and confidence among participants can be significantly improved.
Private blockchains can run behind corporate firewalls or even be hosted on-premise.

Alliance chain:

Multiple organizations can share responsibility for maintaining the blockchain. These pre-selected organizations will decide who can submit transactions or access data.
  Consortium blockchains are ideal for business when all participants need to be permissioned and share responsibility for the blockchain.

  1. What are the advantages and disadvantages of blockchain

advantage:

1. Decentralization

 The blockchain uses peer-to-peer network technology to store data, using distributed accounting and storage, and there is no centralized hardware or management organization.
 The rights and obligations of all nodes are equal, so the stoppage of any node will not affect the overall operation of the system.

2. Collective maintenance

The system is open, except that the private information of the transaction parties is encrypted, the system is jointly maintained by all nodes with maintenance functions,
Anyone can query blockchain data and develop related applications, so the entire system information is highly transparent.

3. High security

Once the information is verified and added to the blockchain, it is stored permanently. Generate a set of chronological records that cannot be tampered with.
A trusted database so that relevant wrongdoing can be limited. Therefore, the data stability and reliability of the blockchain are extremely high.

4. No need to trust the system

Since the information exchange between nodes follows a fixed algorithm, participants do not need to trust anyone. As the number of participating nodes increases,
The security of the system increases instead. Therefore, the counterparty does not need to make the other party trust himself by revealing his identity.
It is very helpful for the accumulation of credit.

shortcoming:

1. Security issues

A major feature of blockchain technology is that it is irreversible and unforgeable, but the premise is that the private key is safe. The private key is generated and kept by the user,
No third party involvement. Once the private key is lost, you cannot do anything with the account's assets.
With the development of new computing technologies such as quantum computers, asymmetric encryption algorithms will have a certain possibility of being cracked in the future.
This is also a potential security threat faced by blockchain technology.

2. Delay in data confirmation

In the financial blockchain, the time for data confirmation is relatively long. Take Bitcoin as an example, the validity of the current transaction is affected by the network transmission,
The exact time for each Bitcoin transaction is about 10 minutes, and it takes an hour for 6 confirmations.
Therefore, the transaction data of the blockchain is delayed.

3. Regulation

The decentralized and autonomous features of the blockchain dilute the concept of state supervision. However, all innovations need to meet regulatory requirements.
The supervision of blockchain, in a certain procedure, promotes the commercial application of blockchain and better provides compliance protection.
On the other hand, there is a lag in the establishment of laws and systems for this new technology by the regulatory authorities.
It may also destroy the blockchain, and you need to grasp the scale.

  1. What is the relationship between blockchain and Bitcoin

Bitcoin is the first and largest application of blockchain, and blockchain is the underlying technology of Bitcoin.
The birth of blockchain is inseparable from Bitcoin. It can be said that there is no blockchain without Bitcoin.
In other words, blockchain technology is extracted from Bitcoin technology, and the advantages of blockchain are all Bitcoin.

Supplement: What is the difference between a blockchain and a traditional database?

Traditional database:

The database can be modified, managed and controlled by the administrator. The database will always have an administrator and have full control over the database.
They can create, delete, modify any record in the database.
They can optimize the performance and size of the database.
The larger the database, the slower the performance, so administrators can take various measures to optimize it.
Administrators can also transfer this permission to others. So the database is centralized.

Blockchain:

Blockchain is a decentralized and distributed network architecture. It does not require a centralized database, all nodes in the network will be connected to each other.
So, no one can control all the nodes, and there is no need for administrators on the blockchain. What if someone in the node is cheating?
Will this affect the entire network? The theoretical answer is that if they get the majority of the computing power, then it is possible.
In theory, if someone can control 51% of the computing power, they can control the network.
This requires a lot of computing resources, so it is very expensive to generate an attack.

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