it is immutable ,sequential chain of records called Blocks. They can contain transactions,files or any data you like .They are chained together using hashes.
It uses hash functions :it takes in input value and that creates an out put value deterministic of the input value. It takes an input and outputs a hash . A hash is usually as a hexadecimal number.
Blocks have three parts:
- Blocks store information about transactions
- Blocks store information about who is participating in transaction
- They need hashes to distinguish similar blocks
In order for a block to be added to the blockchain , four things must happen:
- A transaction must occur
- Transaction needs to get verified
- It must now be stored in a block
- That block must be given a hash
Transactions on the blockchain are not completely anonymous, personal information about users is limited to their digital signature or username.
It’s very difficult to go back and alter the contents of the block.That’s because each block contains its own hash,along with the hash of the block before it .If that information is edited in any way ,the hash code changes as well.
To address the issue of trust , blockchain networks have implemented tests for computers that want to join and add block to the chain. for ex :”proof of work”
For example:
When a person is buying groceries , he has to pay to the vendor . A user runs a program on their computers and try to solve a complex mathematical problem , called a "hash". When a computer solves the problem by “hashing” a block, its algorithmic work will have also verified the block’s transactions. The completed transaction is publicly recorded and stored as a block on the blockchain, at which point it becomes unalterable.
The transactions are publicly recorded on the block chain , user-data is not completely available (only data that the user allows is available on the block chain).
In order to conduct a transaction on the Bitcoin network, participants must run a program called a " wallet". Now each wallet contains 2 keys
1.Public key :location where transactions are deposited to and withdrawn from
2.Private key: user's digital signature ,which is shortened and processed through a series of complicated mathematical arguments to form public key
A real life example for this will be :
a school locker and the private key as the locker combination. Teachers, students, and even your crush can insert letters and notes through the opening in your locker. However, the only person that can retrieve the contents of the mailbox is the one that has the unique key.
Single Public chain:
Block chain discourages the existence of multiple blockchains through a process called
"consensus" .This protocol is often refereed to as it's greatest strength and greatest weakness.
Theoretically ,Hacker proof :
- 51% attack rule
- double spending
Applications:
- Bank Use
- Use in cryptocurrency
- Healthcare Uses
- Property Records use
- Smart contracts
- Supply chain use
- Uses in voting
Advantages of a block chain:
- Accuracy of the chain
- Cost Reductions
- Decentralization
- Efficient Transactions
- Private Transactions
- Secure Transactions
- Transparency
Disadvantages of block chain:
- Technology Cost : the computational power that is being used to validate transactions ,such as “pow”
- Speed Inefficiency
- Illegal Activity
- Central Bank Concerns
- Hack Susceptibility: 51% attacks and double spending .
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