Bits Of Blockchain
Shruti Mishra
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The world is going gaga over crypto currency and you’ve been through hundreds of blogs over the internet and still uncanny about the thing called Blockchain & few of its key terms which complicates your?brain, whenever to try your head out over the same.
Hey! calm down your nerves. you are about to overcome those intricated terms which are taking over the world by its impact.
This guide is for anyone who wants to understand the technicalities of the blockchain and is going to take you deep down to the bits and bytes of blockchain in next 3 minutes.
Recently, the headlines were,
Bitcoin Has Split Into Two Cryptocurrencies.
(Source: slate.com)
After the Bifurcation news, we heard that :
?
BITCOIN traders are braced for further uncertainty and price swings after the world’s biggest cryptocurrency forked on Tuesday. But what is the fork and what will happen next??(Source : Express.co.uk)
The way this term “BLOCKCHAIN” and “BITCOIN” is trending in media, I am sure you must have an at least some ill-defined idea of what it is and how it works, if not, you are still going to enjoy this guide.
An exaggerated?definition of the?Blockchain?is not something I am about to give. Rather being precise let’s learn its bits and bytes first.
An indubitable genius invention by,??Satoshi Nakamoto?Bitcoin is a decentralized ledger. which is,”cryptographically?secure”.
“The first Bitcoin was minted on January 4th, 2009, the first payment occurred on January 11th and the software was released as open source on the 15th, enabling anyone with the required technical skills to get involved.” (Source: Wikipedia)
Let us talk about few key concepts in the context of block chains, to make things simpler.
Decentralized ledger?– A Decentralised ledger is a database which is stored on 1000 computer running altogether, all connected in a similar way.
These are two types :
Public Block Chain?–?which can easily be written or read by any body publicly
??????????????????e.g – Bitcoin / Ethereum, though it is highly secure.
In public block chain, the data is recorded by consensus of the majority of network and the ledger exists over P2P network i.e peer to peer.
Private block chain?– can be controlled / read / write by an authority or a group of people.
How the blockchain is hack-proof??
Unfortunately, nothing really is hack proof but this block chain system is more secure than our current system and reduces the risk of breaches.
Block chain relies on public block chain as stated earlier. since anyone can aggregate & publish those transactions, you might think how it can be secure in that case.
It’s just like your residential address. You can show your residence address publicly, but that is not going to give any information about what your home looks like on the inside. You’ll need your private key to enter your private residence, and since you have claimed that address as yours, no one else can claim the same address as theirs.
So what you need to understand is the algorithm the blockchain implements, that is the?proof-of-work?consensus, using blocks. The cryptographic hash function that is also regarded as the digital fingerprint, in which the blocks are identified throughout.In order to be the considerable value, the cryptographic hash function needs to be smaller than the last value.
A?nonce?(i.e a 32-bit field in a Bitcoin block whose value is set)?therefore included in a block to change the data in one block, in the proof-of-work method, all successors of that block must be re-written and a huge amount of calculation is necessary. In addition, the longest chain would be accepted by the network whereas the shorter ones would be discarded at the situation of branches of the chain. This made the data in blocks practically unmodifiable, and moreover, the more blocks built upon the block in which the data is contained, the harder the processing of overwriting the data.
What is the double spending?
We already know it’s a digital cryptographic file but since it’s digital, there is no hard way we?can’t?duplicate it. Which can lead to manipulation by paying more than once by using the same bit coin which can easily be done by some fraud, which is regarded as Double Spending.
How double Spending can be avoided?
You can easily make a transaction and send a single bitcoin twice, Let’s take an example, you have two friends, Lily & John and you are about to make a bitcoin transaction of $10 to both of them.using a single Bitcoin.(let’s consider the block of John & Lilly to be L & J ) Now, let me tell you, these transactions are taking place at the unconfirmed transaction pool and they are checked for the validity when pulled out of the pool, thereafter only they are inserted into a blockchain and the validation process occurs simultaneously for both the Lily and the John’s transaction, both transactions completed by you will show here that you already have enough amount of money, needed to make the transaction.
Now the race begins between those two block L and J for the next confirmation i.e a linked list structure (here the block needs confirmation from the next block sitting next to them for the transaction and validation) that it needs from the next blockchain and similarly, we will wait till 6 confirmations of those transactions which take place one after the another and then we will be having only one transaction as a winner which will be confirmed. Noticeably, until this result, both transactions are at the risk of being canceled. The combination of cryptography & the blockchain technology, altogether ensures that the identical recording of the same transaction does not take place.
Now let us talk about the cryptocurrency, among which the few famous crypto currencies are – Bitcoin, Ethereum, Ripple. They all differ in purpose and capability.there are few distinction among them. I am here to talk about the Bitcoin & the Ethereum :
领英推荐
BITCOIN :
ETHREUM:
The difference between MySQL and the Blockchain?
Block chain is decentralized it has some pre agreed technical and business logic criteria in synchronization with the p2p merchant and have some consensus algorithm with respect to immutability.
Few differences or you can advantages blockchain have over other databases are :
1.Performance – Blockchain is slower than centralized databases since it has to carry various mandatory processes for the security of the block chains.
Various Processes are :
What is Centralized, Decentralized?& Distributed network ??
Centralized – client-server architecture. one node is the server, another is the client. eg-a website. eg-any website.
Decentralized – we create a small network and connect central node among each other forming decentralized network.
Distributed – also regarded as peer to peer, a p2p-multiple computer is connected to the same network and forms a complete network, which is more safe and reliable if one goes down other goes down too.
What is Fork in Block Chain?
The fork is what happens when a?blockchain?diverges two paths forward that could be with regard to new rule or a network transaction history.it mostly occurs when the developers seek to change the rules.
When a Blockchain forks?you get two chains with a shared Genesis and are identical up until the forking point, after which they happen to be in parallel, creating two separate networks.
What are smart contracts ??
A self-executable set of instructions which are able to send transactions to other accounts on the blockchain,?i.e programmed in languages. the languages used are -solidity, Viper and much more.
What are the primary uses of the block chains ??
Blockchain technology can be applied to identity applications in the following areas:
These days cloud storage solution are?build on block chains, smart?contacts technologies etc. recently non-financial use cases have been recognized, so it is making a lot of buzzes.for eg.- you can visit?https://recordskeeper.co/,?https://storj.io/?etc. Among all of the primary uses, highly used is smart contracts.
What is a mining a blockchain?
Adding a new block to the block chain.
Who are miners?
Computer/owner doing the task of mining.
What is mining reward?
When miner uses CPU power to identify next block in block chain i.e a nonce which is a random no. which helps in creating the signature of next block, that should be less than the previous block which comes into validation after guessing 1 million times at least and the time limit is only 10 minutes to mine a new block.
Then miner gets a virtual token or crypto currency in form of appreciation, 22-23k$ while mining a blockchain in bitcoin because it is difficult to mine a new block.
If you aren’t a tech-savvy person, it is obstructive to stay away from cryptocurrencies, as they are gaining momentum. Try to gain insight and learn much about them or go and work on some Block chain.