The Noob Way - Blockchain and it's Importance - Part 1

Everyone of us knows the term Blockchain in today's world and the first thing that comes to mind is the Crypto currencies like Bitcoin and Etherium. A lot of us also knows that that to "mine" a coin, you need to have a Proof of Work (PoW). But do we actually know what exactly is Blockchain, what is it actually solving and what all this tandrum of PoW, mining and everything is?

I am writing a series of articles on Blockchain that will actually make us understand -

• What is Blockchain?
• Why is it so important?
• How can you use something like this to create applications / games / etc?
• How can you use it to make money?

So sit tight and lets begin from the very core concepts...!

It's just a Linked List.. Or is it?

People have often been saying that Blockchain is a simple Linked List. Indeed, it is a Linked list, but rather not that simple.

The initial block of understanding Blockchain is that it is made up of Blocks and chained together in a form of a Linked List, calling itself Blockchain. Each block of the Blockchain contains some information / data and the "Hash" of the previous Block in the chain. You can think of Hash as the "next" (or "previous" in this case) pointer in a Linked List, computed as the SHA256 Hash of the whole block. More on this here.

This means that if Block A's hash is present in Block B, Block B's hash is present in Block C, then if anything happens to the data of Block B or block A, the hashes in the next blocks will never match and would mean that the Blockchain is now broken or corrupt. This is the most important principal of Blockchain.

But why is it SOOO important?

Okay, let's start with a short story. Let's assume you are an Authority which registers properties and deals that happen in your area/country. Any person who buys/sells any House (property) needs to come to you and record their transaction.

So, initially House A was owned by Owner A.

Now, Owner A sells House A to Owner B. Owner B comes to me and says that I have the house deed and now House A belongs to me. I record this in my diary / journal and acknowledges this person.

Over the period of time, Owner B sells to C then it goes to D, E, F and so on... All of these transactions are recorded with me (the govt authority) in my journal / diary. This diary is called a Ledger.

One day, a scamster comes and tampers with my Diary. It removes the page saying Owner B had sold the property to Owner C. Now this means, as per govt records, the house is still the property of Owner B and all transactions C-D, D-E and so on are actually invalid transactions and cannot be verified. This creates a lack of trust in the system, leading to corrupt practises and problems.

One may argue that let us store all these transactions into a digital store and secure them in a database. Agreed. However strict or immune we make this system, there could always be a security threat / issue due to which someone can access our database and change the rows..!!

Then how do we solve them?

Enter Blockchain.

As we said, Blockchain is an immutable record (that can never change) which stores our Ledger or transactions as and when they happen. If you argue that it is also a digital record and needs to be stored on a computer, then yes..! It will be. Then how do we say that it can't be tampered with or changed by any scamster?

As I recall the starting of this article, I told you that every transaction (or block) contains the Hash of the previous Block. This means, if any block changes, it breaks the chain and corrupts the blocks ahead of this tampered block.

Now let's assume the hacker is smarter than this and tries to update ALL the blocks ahead of the tampered block and mimics a wrongly formed Blockchain by validating the chain again. It changes the tampered block, recreates it's Hash, tampers the next block by putting the new hash and keeps on doing this till the end of the Blockchain list. Simple, but then why do we say Blockchain is immutable?

Distributed P2P network

This forms the main crux of security in Blockchain, saying that we will copy the Blockchain to every Mobile/Computer/device we have and we will maintain it over all the devices. There is no Master host or centralised system which "monitors" or controls this Blockchain. Each "node" or computer is linked to All or Many other nodes and keeps it's Blockchain updated with those other Computers.

Now, if a hacker tried to alter a Blockchain on a single computer, by tampering the required Block and all the blocks in front of it, this particular node (or computer) would have a different Blockchain when compared to its peers (or connected computers). Once other computers realise this, they check that is the Blockchain on the infected computers the same as "majority" of computers in the network? If yes, it's correct, if no, it's corrupt.

As soon as this happens, all the peers in the network try and restore the Blockchain on the corrupt/infected computer back to it's original state.

More pressure on Hacker?

So to hack the system, now the Hacker doesn't have to hack the whole list on a single computer but atleast 50% of systems that too within seconds or minutes, which is an impossible condition taking today's computer power. Modifying millions of blocks on millions of devices at the same second, it's nearly an impossible task.

Conclusion

Hence, as seen in above concept, we know that Blockchain is an immutable device to store and record transactions / data in an ordered manner. This was just the starting of our Blockchain journey as to How and Why and What so stay tuned for next updates to this newsletter..! Don't forget to subscribe to this newsletter so that you don't miss any updates..!