The rage is such that nearly everyone has heard of Blockchain by now in some form or the other. And that is not bad at all. But then again, not everyone can fathom the power it holds and the many applications it has in different verticals.
Even we as fellow researchers and writers were astonished to find how blockchain can be executed for the betterment of most companies out there, and how seamlessly it can transform the way we store, capture and utilize data bits.
Let’s delve deeper into the mysterious world of blockchain and try to analyse its potential.
What is Blockchain?
Plainly and simply, a blockchain is a diary which holds incredible amount of data which is potentially impossible to forge or be tampered with.
This is kind of self-explanatory; blockchain consists of 2 elements – a block and a chain. At a very high level though, it can be simply labelled as a chain consisting of blocks tied seamlessly together in a very random manner. Digital information is stored in the most secure manner possible.
Every chain consists of multiple blocks, which largely depends on the amount of data stored. Every new update, entry, change is recorded as a separate string, a new string in itself; there is no redundancy. And the best part is – that the entire data backlog is for everyone to see, ensuring maximum transparency. How is it safe then? It’s all encrypted and only the individuals access to that encryption can do something about it.
Every single block consists of something known as a hash. A hash is largely a set of characters like 1h515HA. The formation of hash is decided based on the information stored in it.
Safety Is Never Compromised
Now, every successive block holds the hash of the previous block as well, which is what binds these blocks together. It might not look it, but this simple phenomenon is what makes a blockchain more secure than a titanium vault. How? Is someone wants to tamper the block by adding some information, that block’s hash will change accordingly. But since the original block-hash was already stored in the successive block; there will be a mismatch which will break the chain instantaneously. Ergo, the one who’s overseeing will catch this in a jiffy and eliminate the error resulting in the data staying theft-proof.
If you’re smart enough, you will ask, “What if some changes the content of a particular block and then change the hash of the successive blocks as well?”
This is well and truly possible but then, there’s one key thing we missed out on. The overall blockchain data is not just stored on a single computer system. It is successfully replicated and updated in a real time manner on the computers of every single user of the network without fail. Hence, as soon as you join a blockchain network, your system will automatically download these blocks. And whenever there is a sign of tampering or theft, the network will consider the majority data to be true and authentic and reject the rest. Voila!
No Central Entity
It is worth mentioning now that not just data, but the entire program is replicated as well. Contrary to conventional systems and apps and websites, blockchain doesn’t have a central entity or repository to go back to. It relies on the computer systems of the users to host the overall program. So, if every computer on a blockchain network switches off; the blockchain will be no more.
Public Vs Private Blockchains
In a public blockchain, the tamper-proof blocks hold all transaction data and individuals who sacrifice their computer systems (miners) get rewarded in Bitcoins (a digital currency).
Whereas a private blockchain is the exact opposite of this. Many functions which are open to everyone on a public blockchain aren’t open to everyone here. One can only make changes or read the data if they have permission.
Private blockchains are owned by enterprises or a single entity in most cases. Since individuals don’t need to spend too much energy, money or time to reach a proper consensus, private blockchains are faster and cheaper.
However, when it comes to security, private blockchains don’t deliver as much as the data can be written/edited at will by the parties in charge, which is not the case in a public blockchain.