What is blockchain technology?

What is blockchain technology?

Nowadays few people know little about 'blockchain', the record-keeping technology behind the Bitcoin Network. In trying to learn more about blockchain, you've probably encountered a definition like this: “blockchain is a distributed, decentralized, public ledger.'

What is blockchain?

If this technology is so complex, why call it “blockchain?” At its most basic level, blockchain is literally just a chain of blocks.

More about what is blockchain you can visit what is blockchain.

How Blockchain Works

When a block stores new data it is added to the blockchain. Blockchain, as its name suggests, consists of multiple blocks strung together. There are four things must happen when a block to be added to the blockchain.

  • A Transaction must occur. A block will group together potentially thousands of transactions will be packaged in the block along with other users' transaction information.
  • That transaction must be verified. A transaction in the block must be verified.
  • That transaction must be stored in a block. After your transaction has been verified as accurate, it gets the green light. The transaction’s dollar amount, your digital signature, and Amazon’s digital signature are all stored in a block.
  • That block must be given a hash. Not unlike an angel earning its wings, once all of a block’s transactions have been verified, it must be given a unique, identifying code called a hash.

If you take a look at Bitcoin’s blockchain, you will see that you have access to transaction data, along with information about when (“Time”), where (“Height”), and by who (“Relayed By”) the block was added to the blockchain.

bitcoin block explorer

Blockchain is safe?

Blockchain technology accounts for the issues of security and trust in several ways. First, new blocks are always stored linearly and chronologically. That is, they are always added to the “end” of the blockchain.

The blockchain contain the new and the old hash. In order to change a single block, then, a hacker would need to change every single block after it on the blockchain. Recalculating all those hashes would take an enormous and improbable amount of computing power.

Proof of work does not make attacks by hackers impossible, but it does make them somewhat useless. Given the tremendous size of the Bitcoin blockchain, a so-called 51% attack is almost certainly not worth the effort and more than likely impossible.