Blockchain - bitcoin technology
Blockchain technology is an invention Satoshi NakamotoThe blockchain is not just another technology for storing and exchanging data. However, since its creation, blockchain has become not just another technology for storing and exchanging data, but a whole revolutionary technological breakthrough that affects more than just the financial sphere.
Today we're going to look into what blockchain is.
The essence of blockchain technology
Blockchain (blockchain) is is an English word formed by the words block, chain, i.e., a chain of blocks. Simply put, blockchain is a database made up of blocks.
The whole essence of blockchain technology, which distinguishes it from its counterparts, is that the information stored in the system is decentralized. In simple terms, this means that there are not, for example, 10 servers to store information. all data, without exception, are distributed among the participants of the system.
Bitcoin and all other cryptocurrencies are built on blockchain technology. However, it can be used not only for financial transactions. The blocks that make up the blockchain can record all the information that is stored in paper form: credit histories, traffic violations, property rights, you name it!
How blockchain works
In fact, the principle by which it is arranged blockchain technologyThere is nothing complicated about it. Imagine a big ledger that records the financial transactions of money coming in and going out.
Each page of such a book is a block of information, and the whole book is a blockchain - a chain of blocks. But such a "ledger," as we have said, is not kept by an accountant, but by each user of the system at the same time.
Each block in the system has a link to the previous block, so if someone tries to change or simply "rip" a block out of the chain, the system will immediately detect a mismatch, because it constantly refers to hundreds of thousands of similar "books".
The closest analogue of blockchain is the Torrent network, which operates on the principle of P2P (peer to peer - all network members have equal rights). For example, information in the Torrent network is not stored on some central server either. By downloading a movie (which does not, of course, violate anyone's copyright), we do it directly, from the same network members as we do. That is, the information "lives" as long as there is at least one member of the network.
Blockchain is set up in exactly the same way. Participants seek information directly from each other.
What makes blockchain technology different
So how do the blocks line up in a chain? This uses an encryption process based on complex mathematical algorithms, also known as hashing.
Hashing is performed by computers that are on the same network. Simply put, the computers on the network solve the mathematical problem assigned to them. As soon as they get the same solution, a new block of data is created.
A timestamp is added to such a block, which is a hash sum. No two people on the planet have the same fingerprints. Similarly, each block has a unique hash sum.
Once the registry is updated, the created block can no longer be modified, but only new information can be written to it. The registry is updated simultaneously on all computers in the network. If you try to manually change the blockchain sequence, the blockchain system will not let you do so because of a hash sum mismatch.
Features of the blockchain network
As we said above, blockchain is a peer-to-peer network. Accordingly, the more participants in the system, the stronger and more stable the system itself is. At the same time, all users of the network have equal rights - there is no body that performs administrative functions.
Information stored on the blockchain is available to anyone.
Any block in the chain can be opened for examination. That is, blockchain allows you to track all the changes that have occurred to the information, as well as to verify its correctness. Therefore, cheating or any kind of manipulation in the blockchain system is impossible in principle.
Despite the openness of the data in the blockchain, it is well protected.
Simply put, the information provided by the blockchain allows us to identify all millionaires. To identify them, yes, but to determine who they belong to, no. To do so, one must have a special key with which the system identifies the user.
What are cryptographic keys
The keys we mentioned above are needed to simplify the process of verifying the veracity and correctness of the data. A cryptographic key is a group of numbers and letters calculated using a hash function. A cryptographic key in a blockchain network has two main features:
- With a key in hand, you can not know the original (primary) information;
- The possibility of a data packet to generate a key that already exists has been eliminated.
Simply put, having a cryptographic key makes it impossible to harm an individual user or the system as a whole. However, with the available data, it is possible to verify the correspondence of the information to a particular key.
It is with the help of cryptographic keys that the blocks are chained together. In addition to the key of the current block, the keys of previous blocks are also encrypted in it. If an attempt is made to change the information contained in a block, the block key will also be changed, which will be immediately detected by the system. In addition, the block key is a guarantee of network protection, which grows in proportion to the spread of the network.
Blockchain participants
Anyone with a computer can become a participant in the blockchain system. In a blockchain network, all users have the same rights. The system itself is set up in such a way that there are only two groups of participants:
- Simple participants - users who create records in blocks. They get blocks already prepared and stored on their computers to check other people's and their own data.
- Miners - are people who create new blocks using their computing power. The job of the miners is to collect the records of ordinary users, form them into blocks, and send them around the network.
Until an entry is entered into the block, it is considered invalid and requires confirmation. You must have seen a message when using a bitcoin wallet that a transaction will be made after several confirmations. Once an entry is confirmed and written to the block, it cannot be changed in any way.
Benefits of blockchain technology
- Data exchange between network members directly, eliminating intermediaries.
- Blockchain cannot be hacked - you have to have access to all the computers on the network to do that;
- Blockchain reliability - the more users in the system, the more secure it is.
- Security of personal data - the hashing process is irreversible.
Impossibility of changing or tampering with the data entered into the block - along with the change of data will change the cryptographic key, which will be immediately detected by the system.
Prospects for blockchain technology
Blockchain technology was originally the basis for the Bitcoin cryptocurrency. However, over time, its applications are expanding. Any industry with databases can be converted to blockchain technology.
In the concept of blockchain, it is impossible not to mention smart contracts, which, as you remember, are a kind of "integrity enforcement," saving users from legal delays. For example, the electronic notary Stampery uses blockchain technology to certify transactions.
In general, blockchain technology can be used almost everywhere, and it is likely that over time more and more companies and organizations will move to blockchain.
In any case, given the growing level of users of blockchain technology and the current scale of its application, you can't just "brush it aside.