A blockchain is a decentralized database shared among computer network nodes. A blockchain acts as a database, storing information in a digital format. Blockchains are well known for their critical role in keeping a secure and decentralized record of transactions in cryptocurrency systems like Bitcoin. The blockchain’s novelty ensures the fidelity and security of a data record while also generating trust without the requirement for a trusted third party.
Blockchain and database
The structure of the data on a blockchain differs from a traditional database. A blockchain organizes data into groupings called blocks, each containing data collection. Blocks have specific storage capabilities, and when they’re full, they’re closed and linked to the preceding block, producing a data chain known as the blockchain. All additional information added after that newly added block compiles into a new block, which is then added to the chain after it is filled.
How does blockchain work?
The purpose of blockchain is to enable the recording and distribution of digital data without modifying it. In this sense, a blockchain serves as the foundation for immutable ledgers or transaction records that can’t be changed, erased, or destroyed. Blockchains are also known as distributed ledger technology (DLT).
The blockchain concept was first presented as a research project in 1991, and it before its first popular use in use, Bitcoin, in 2009. The creation of numerous cryptocurrencies, non-fungible tokens (NFTs), decentralized finance (DeFi) applications, and smart contracts has skyrocketed the use of blockchains in the years thereafter.
Because of the decentralized structure of Bitcoin’s blockchain, all transactions may be observed in real-time by utilizing a personal node or blockchain explorers. As new blocks are confirmed and added, each node’s copy of the chain is updated. This implies you could follow Bitcoin around the world if you wanted to.
Of course, the Bitcoin blockchain (as well as the majority of others) stores encrypted records. This means that only the record’s owner may decode it and reveal their personal information (using a public-private key pair). As a result, blockchain users can keep their identities private while maintaining transparency.
Are blockchains secure?
In a variety of ways, blockchain technology provides decentralized security and trust. To begin, fresh blocks are always placed in a linear and chronological order. That is, they are always appended to the blockchain’s “terminus.” It’s exceedingly difficult to go back and change the contents of a block once it’s been placed to the end of the blockchain unless a majority of the network agrees. This is because each block has its own hash, as well as the hash of the block before it and the time stamp indicated before. A mathematical function converts digital information into a string of numbers and letters, resulting in hash codes. If the data is changed in any way, the hash code will change as well.
Blockchain vs Bitcoin
Stuart Haber and W. Scott Stornetta, two researchers, initially proposed blockchain technology in 1991, with the goal of creating a system that could not be tampered with when it came to documenting time stamps. Blockchain didn’t have its first real-world application until over two decades later, with the launch of Bitcoin in January 2009.
A blockchain is at the heart of the Bitcoin protocol. Satoshi Nakamoto, the pseudonymous creator of Bitcoin, described it as “a new electronic cash system that is totally peer-to-peer, with no trusted third party” in a research paper introducing the digital currency.