Blockchain is an advanced way of recording information. A blockchain is a distributed list of databases in a wholly digital format. It stores data in small digital blocks. When the data fills the block, it adds to the next block. This way, a chain of blocks generates. Now you can understand why it has been given this name.
Blockchain technology was first introduced in 1991 by Stuart Habber and W. Scott. Although it was introduced, Only a few people knew about it. It came into the mainstream in 2009 when an unknown developer Satoshi Nakamoto created bitcoin using this technology.
Since then, almost everyone has known about blockchain technology in some manner. One of the main reasons behind the rapid growth of blockchain technology is bitcoin. Since bitcoin established itself as a new asset class, it has become popular among more people. The growth was so immense that even ordinary people started investing in bitcoin.
How Does Blockchain Work?
Blockchain aims to store data or transactions in blocks so they can be transparent but not editable at the same time. Earlier, we depended on centralized entities to create and manage databases. Because of this, the data can be easily editable without any transparency.
Since blockchain technology came into the picture, everything has changed completely, as nobody imagined. Unlike the traditional system, blockchain uses a decentralized system. It means any organization doesn’t operate blockchain.
In the blockchain, whenever a transaction happens, it gets stored in a block. In other words, every transaction is assigned a unique code( also known as hash code). As a result, each transaction becomes completely different.
In addition, each block has a hash code of the previous block, called prevhash. Because of this, every block not just has its information but for the previous block also. Moreover, there is one block that doesn’t have a prevhash. This block is the first block from the chain starts. For this reason, the first block is called the Genesis Block. Now you learned what blockchain is and how it works. Questions like what if we change the hash code can come to your mind.
What will Happen if Someone Tries to Change the Hash code?
The answer to this question is fascinating. As you already know, each block has information of its own and the block previous to it. For this reason, If somebody tries or somehow changes the hash code, the block will become invalid.
In case of any modification, the hash code of this modified block will not match the next block, which continues until the last block. As a result, the whole chain after that modified block will become invalid.
Some may say what if someone tries to change all blocks? The solution may seem simple but believe me; it’s not. Let me explain why. Usually, it takes 10 minutes to modify a block. If a blockchain has 1 lakh blocks, you can imagine how much time it will take. Because of this, breaking blockchain technology is next to impossible.
In simple, the blockchain is nothing but a highly secure advanced database system. Because of its highly secure nature, more industries are now using blockchain. For instance, earlier, when we had to send money from one country to another, we needed to go to the bank. And the bank used to convert this currency in exchange for some fees.
The situation is much different now. Due to assets like bitcoin(based on blockchain), you can send money in the form of bitcoin. There is no need for currency conversion. This is one simple use of blockchain technology. There are numerous other industries benefitting from this technology.
For these reasons, blockchain technology has become a revolution in the form of a decentralized database system, and it will increase even more in the future.