What is Blockchain? Real-world application of blockchain? | Bitcoin

What is a Blockchain?

Blockchain is basically a technique to store information, To store the data in a decentralized manner. Decentralized means that there will be no central authority to control the entire data and information. Take the Reserve bank of India (RBI), for example. Indian rupees, a note of ?500, are printed by the RBI. RBI guarantees that its value is ?500. Neither ?501 nor ?502. It's even written on the note that RBI guarantees it. So RBI is basically a central authority controlling all the Indian rupee notes around the world. RBI can change the value of the notes if it wants to. Can increase the note production or decrease it.

But on the other hand, currencies like Bitcoin are decentralized. There are no central agencies or authorities controlling Bitcoin. It is possible because Bitcoin is based on Blockchain. And Blockchain is the technology that actually makes Bitcoin decentralized. There can be many ways to store information. Writing down something on paper is a way to store information. Writing something on an excel file on the computer is a way to store information. On an excel file, your information is structured as a table. Similarly, in a Blockchain, the information is structured in the form of blocks. Each block is made up of three main things. First, any data or information you store in the block. Second, each block has its fingerprint known as Hash. This is the way to uniquely identify a block among other blocks. Every block has its own fingerprint. And third, each of these block stores the fingerprint of the block before it. This is a Blockchain. This block will have its own fingerprint and of the block behind it. And thirdly, any information you put into it will be stored here. This is how all the blocks are linked with each other. And the most unique thing about this is that If you want to change the data in any block, if you try to tamper with the data, then the fingerprint, or the hash, of the block will change. And if the hash of one block changes, the hash of the next block will also change. And the next and eventually the entire blockchain will be destroyed. For this reason, it is next to impossible to alter or tamper with the data in a blockchain. Because once a block is defined and becomes a part of the blockchain It cannot be altered after that.

The second major reason for Blockchains being secure is Decentralisation. You will not find a blockchain stored in only one computer. Blockchains are stored in a network of computers. All the computers around the world belonging to the participants of the blockchain will have one copy of this blockchain. Instead of one central authority, it is managed and run by a network of computers collectively. The people who are connected to the blockchain through their computers and those who allow the blockchain to run on their computers they are known as Nodes. Some Nodes among them are Minors. Whenever new data is added to the blockchain, it's the work of the Miners to verify it. Whether the person adding the data has done so properly or not. Or whether it is an attempt at tampering. All the Miners verify and record this. Any computer connected to this network can see the data added to the blockchain. There is no need for any third party. No need for any Central Authority. You too can connect your computer to the network and verify this.

Let's see some practical, real-life examples. one of the biggest use case is the Education system. Where people forge mark-sheets for submitting them to places So much so that people can't even believe that the person has studied in IIM. Or studied from IIT. If I ask you to prove it, you might not have any proof apart from your certificate. You have no other proof that you can attach. So it can be used there reliably and people are working on it as well. So it means that we can upload our mark-sheets and certificates online And then they cannot be changed. This is the benefit of using the Blockchain. Yes, and the biggest benefit is that the mark-sheet uploader, let's say the CBSE Board, all the boards, can directly use Blockchain to upload the mark-sheets so that if any corrupt person gets into the Boards and wants to change the mark-sheets, you might not believe it, but it is possible to do that even today, But doing it through Blockchain means that it can never be changed. Your old mark-sheet cannot be changed. And even if someone changes it, you'll get the details. About who made what change and where.

You might wonder that if everyone can see the information in the blockchain, and the copy of the blockchain will be present in every computer of the network, so any information you put in will cease to be private and can be seen by anyone. So what about your privacy? Actually, friends, the information in the Blockchain is not only secure but also is privacy protected. It can be so because each computer in the network has its own Private Key, and a Public Address. Think of them as the email address and email password. When you log into your email account, you enter your email id and the password and only you can log into your account. It is the same with Blockchain. But when you share your email id with others you share your public address, not your private key. And this Public Address is a random combination of numbers and digits. Somewhat like this. suppose elections happens using blockchain then, if you vote for some candidate using your Public Address through the Blockchain system, then even your name will be private. The other computers on the network will see that this Public Address has voted for this candidate. But who the person is behind the Public Address, their name, age, address, nothing will be revealed. Privacy will be maintained.

What will happen when a person tries to alter the data in the Blockchain? How can the system prevent it from happening? Let's take the example of the Bitcoin Blockchain. Suppose ?50 is to be transferred from A to B. A new block will be created with A and B's Public Addresses. And the amount being transferred. ?50 in this case. Now, the other computers on the network will record this. They'll record that A initiated the transfer to B and the amount transferred. And then they'll verify the transaction. But if one of the computers says that the transfer isn't from A to B instead from A to itself. But the other computers on the decentralised network recording the transaction will refuse the claim because they can see that the transfer is between A and B. This is why the system will listen to the other computers and allow the transaction from A to B. If one wants to alter or do fraud in the Blockchain, one would need the majority of at least 51%. This is also considered a disadvantage of Blockchain. If someone hijacks or hack 51% of the computers on the network fraud can be done or allowed to be done on the network. But realistically, to hack 51% of the computers on the network is next to impossible Because all of them are decentralised, they're not connected to each other. It is not that if one is hacked, the others are hacked as well. They will have to be hacked individually at their locations. And in a large Blockchain, like Bitcoin's, where millions of computers around the world are connected on the network there it is almost impossible. Because who can hack millions of computers from every corner of the world? The larger the Blockchain and the more computers and people connected to the network it will become increasingly difficult to hack the Blockchain. You may also wonder that the computers connected to the network they keep on verifying the new blocks added to the Blockchain 24*7 they verify which block is authentic and which isn't.

But what do they get out of it? Why would a person keep their computer connected to the Blockchain network and let it do this 24*7? What will the person get out of it except a huge electricity bill? There has to be some reward. So there are rewards, friends. In the case of Bitcoin Blockchain, this reward is in the form of Bitcoins. Every computer mining for Bitcoins and connected to the Bitcoin Network gets some Bitcoins. And if any computer falsely verifies something, it is punished as well. And there is a penalty. So the whole decentralised network works on the basis of reward and punishment.

Talking about some more examples where Blockchain is implemented in real life The most shocking and interesting fact will be that it has already been used for elections. There is a country in Africa, Sierra Leone. There Blockchains were used during the elections for voting. But I should also tell you that many experts believe that using Blockchain technology for elections and voting is not right. According to them, the disadvantages are more than the advantages. The chances of getting hacked increase. Even though it is difficult to hack the Blockchain, but on an individual level, it may not be that difficult to hack the phones of individuals. And attacks can be carried out where the network can be switched off. So this is not a simple solution, it is a topic for debate. About how can it be implemented and whether it will be right to implement it or not.

But there are some other sectors where Blockchain is definitely very useful. And it is already being used there. Like in the Healthcare sector. Blockchain can be used to store medical data. So that the medical record of the patients is not stored in a database in a centralised way. A doctor cannot access them unless there is a need. Patients will have more privacy. And the data will be more easily accessible.

It can be used for trading as well. Whenever you order something from somewhere, and you don't know much about the supplier and how reliable they are. You're unsure if they will be able to deliver the goods or not. And the supplier doesn't know much about you either if you can pay on time or not. Here, Blockchains are used to enter into Smart Contracts. Contracts that are based on Blockchains. Because of these contracts, you wouldn't need to trust any third party. Once the goods are delivered, money from your bank account will be transferred to the supplier's.

Similarly, property management, crowdfunding, and the management of Government data can be done efficiently by using Blockchains. Nowadays, the Government stores so much of our data on its servers where they fail to keep it protected. Often we get to hear that government databases are hacked and so much data has been leaked, the Aadhar data kept here has been leaked there. Personal information of people is leaked. But if Blockchain is used it will not happen. Because we will not have to trust the Government to protect it. In a decentralised network, all of us can verify for each other. We can make it our work.

In the coming time, we're moving towards a decentralised future. It means that many websites and applications on cloud-based platforms soon will move to Blockchains. I believe that after the next 10-15 years the same applications that you use today, be it social media, censorship or copyright issue, video upload, streaming platform or any platform that you can name, All those companies will have to use Blockchains because the user today trusts and believes in the companies that are transparent with their work Not those who hide from the public eye and modify their processes. For this reason, some people believe that Blockchains can revolutionize the world. Like how the Internet had changed history. Now we can't even imagine life without the internet. Similarly, people believe that soon it will be difficult to imagine life without Blockchains. Let's see how it will be used in the future.