As the name implies blockchain is a chain of blocks, these blocks have records that are linked to each other via cryptography. Every block has a cryptographic hash of the last block in the chain, it also has a timestamp and all the data regarding the transaction. Once the record has been formed, block chain data cannot be altered. To alter the data all the data on other blocks will also have to be changed. Therefore, blockchains are extremely secure and are managed by a peer to peer network who are adhering to a specific protocol. Blockchain therefore is a distributed ledger which is open and it has the ability to record the transactions in an efficient and permanent way.
Blockchain is an invention of a person or a group of people referred to as Satoshi Nakamoto in 2008. It serves as the transaction ledger for the bitcoin which is a cryptocurrency. The identity of the founder of the bitcoin is unknown till date. The blockchain is helpful in solving the problem of double spending without the need of a centralized server. A central server is a trusted authority like a bank which manages all the data. The blockchain bypasses the need of any such authority.
The concept of block chain is not new, it was proposed already by a cryptographer David Chaum in his 1982 dissertation. The system deals with documented timestamps and hence in it cannot be altered or corrupted. Nakamoto was the one to conceptualize it and hence improve it using a hash-cash method with the help of which he timestamped the blocks. Now these blocks do not require any signing by a trusted party.
Nakamoto implemented this design in 2009 as a preliminary part of the bitcoin. The size of this blockchain for bitcoin has started from 20 GB and has reached 200 GB. It contains the record of every transaction that occurred through the system. In Nakamoto’s research paper blockchain was written as block chain, separate words but as the term gained popularity it started getting referred to as blockchain, one word.
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The structure of the blockchain is such that it consists a digital ledger of blocks. These blocks record the transactions across a number of computers without any changes in the previous blocks. The participants are able to keep a record of their transactions without third party interference and without paying a lot of money. The database of blockchain is managed without the interference of a centralized authority. Its source of authentication is everyone taking part in the system. So basically it is powered by a mass collaboration. The blockchain does not render an infinite reproducibility of digital asset possible. It makes sure that transfer of each unit occurs only once and hence double spending does not occur. Blockchain ensures the rights of parties in transaction. The structure has blocks. As mentioned earlier, each block has a cryptographic hash of the previous block. This helps to link the two blocks. These blocks when linked together form chains. These connections of blocks with each other confirm or ensure the integrity of all the blocks back to the first, foundational or genesis block. Sometimes a temporary fork can be formed because of linking together of a group of separate blocks. Because the history is based on hashes, every block in the chain has specific algorithm for a specific version of the history. The one that scores high is then selected over the other. There are blocks such as orphan blocks which are not included in the blockchain. The ones with the highest score are kept. However, it cannot be guaranteed that such blocks can remain in the history forever.
Block time is referred to as the time the network takes to form one more block in the block chain. The average time for the formation of a new block is 5 seconds. Every five seconds. A new block is formed. When a block is included, it can now be verified. When a transaction is fast the block time will be shorter.
The blockchain is therefore a user friendly platform for performing fast transactions. The data is stored across this peer to peer network. It also prevents the risks of data manipulation when data is held centrally. However, a controversy has arisen that as transactions require no permission for the processing, this might lead to privacy concerns. On the other hand, if privacy concerns are met, transparency can be breached. Those who hold privacy concerns in high regard state that these blockchains ought not to be trusted.