What is Blockchain and Blockchain Technology? How does it work and how secure is it?

What is Blockchain and Blockchain Technology? How does it work and how secure is it?

It is made up of two words. The chain of the first block and the second chain. Block means a lot of data blocks in Blockchain technology. Meaning that the data of cryptocurrency is kept in these blocks. Different boxes contain currency, ie data, and they are linked to each other.

You must know about bitcoin, but do you know on which technology bitcoin works. If you do not know, then it does not matter, in this article, we will talk about 'Blockchain Technology' on which bitcoin works.

Apart from Bitcoin, all the cryptocurrencies that we call Alt Coins also work on the blockchain. We will be able to see Blockchain technology all around us in the coming few years, today even big companies of the world are using Blockchain in their business.

The importance of blockchain for us humans is going to increase a lot. In this article, we will know what is Blockchain? Where can it be used, how Blockchain technology can be important for us humans, and much more, so by reading this article from beginning to end, you are going to know a lot about Blockchain.

Blockchain is a database of blocks made up of many chains that collect and store information in blocks. Now you must be thinking that what is this database, then let me tell you that a database is a collection of many information which is stored electronically on the computer.

The biggest advantage of the database is that it can be used by many people at once, the purpose of blockchain is to record digital information and easily reach people.

But once the information that has been stored in the blockchain cannot be changed back and also due to the blockchain being decentralized, it is not under the control of anyone person or organization, which makes it the most different and unique.

Whatever information is generally kept in the computer, can be easily changed because it is under the control of an individual or organization. Due to this, it becomes very easy to fraud.

The information once stored in the same blockchain cannot be changed again, due to which fraud in it is almost negligible.

Blockchain collects the information in groups and can collect the information of each block.

Due to this, a very large chain of data is formed which we call Blockchain.

Beginning of Blockchain

The famous cryptographer David Chaum proposed a protocol like Blockchain in the year 1984, which was carried forward by Stuart Haber and W. Scott Stornetta in the year 1991, they wanted to create such a system in which the information kept could not be tampered with.

He also succeeded, but at that time Blockchain Technology was much ahead of its time. Blockchain got its real identity after the year 2009 when a person or group named Satoshi Nakamoto discovered Bitcoin.

And Blockchain Technology was used in Bitcoin, and from then till today is the time where everyone is talking about Blockchain and it is being used in many places.

Blockchain Technology is mainly of 3 types Public Blockchain, Private Blockchain, Hybrid Blockchain, let us understand these four types.

1. Public Blockchain

As the name suggests, public means anyone can use this public blockchain. Bitcoin, Ethereum, Litecoin, etc. are all public blockchains, in this, whatever information is gathered in the network, is not stored in one place but stored in many computers, which we also call Nodes.

If you have a good internet connection, then you can also become a part of the public blockchain, after which you will get all the records of all the activities that have happened in that network so far and you will also be able to do mining.

2. Private Blockchain

The way Public Blockchain is an Open Source Private Blockchain is the exact opposite of it, it is a Closed Source network that you have to get permission to use. Because it is controlled by a single party.

Therefore, only selected people can use this network, although Private Blockchain works like Public Blockchain it works within a radius so that not everyone can use it.

It is used by the company or organization for voting, supply chain management, or using a digital identity. Hyperledger, Multichain, Ripple are examples of private blockchains.

3. Hybrid Blockchain

Hybrid Blockchain is made up of Public Blockchain and Private Blockchain. It uses both Private Permission and Public Permissionless systems. With the help of which any organization can decide which information should be kept public and which information should be kept private.

Generally, whatever records and transactions happen in Hybrid Blockchain are not made public but they can be verified in Public Blockchain. Dragonchain is an example of a Hybrid Blockchain.

How does Blockchain Technology work?

The three most important parts of Blockchain are Blocks, Miners, Nodes, let's know about these three in detail.

Block

As you know Blockchain is made up of many blocks in which data is collected, each block has a different hash number which is associated with the previous block and this hash is created when there is a transaction. Is.

If someone tries to tamper with these blocks, then these hash numbers get changed, so that it can be easily known that someone has tampered with the block.

Miners

Miner has a very important role in Blockchain because it is the miner who makes new blocks by mining. For example, whenever there is a transaction/transaction in bitcoin or any cryptocurrency, the information about that transaction first goes to the miner.

The miner verifies this information, now for this, the miner has to extract the information of whatever transaction data is in that block, which is like a mathematical puzzle that is solved only with the help of a computer.

But it is not as easy as it sounds or looks, after extracting the information of the block, the miner gives it a hash number that is different for all the blocks.

And the hash number of each block is associated with the previous block, for example, let's take two blocks Block A and Block B. Now to verify Block A the miner has to first extract its transaction details and after that, the miner will give him a hash will give the number which we consider as hash A.

Now, in the same way, the miner extracts the transaction details of Block B and assigns its hash number to hash B. Now, this hash B will be composed of the earlier hash A i.e. hash B + hash A.

Now whatever transaction will happen next will be associated with hash B, if the hacker attacks hash A and try to change that hash number then hash B will also change with him because it is linked to hash A and so on. All blocks ahead of it will also change.

Due to this, it will be very difficult for the hacker to attack the blockchain because he will have to hack all the blocks at once, and to do all this he will need a much more powerful computer which is almost impossible.

Nodes

The biggest feature of Blockchain Technology is Decentralization, that is, it is not controlled by any one person or organization. Blockchain is like a book of accounts that stores all kinds of information.

Nodes are maintained in this account book, which is computers in a way that keep the entire network connected. There are many similar nodes in the blockchain and each node has a copy of the blockchain.

Nodes verify whatever transaction or whatever activity happens in the network and update it in the network, if they feel that some kind of wrong activity or transaction has happened, then all the nodes together cancel it.

Advantages and Disadvantages of Blockchain Technology | Advantages & Disadvantages Of Blockchain Technology

Advantages of Blockchain Technology

Security

Blockchain technology is an open-source platform, in which everything from transactions to activities is available to the public. Due to this it becomes almost impossible to fraud in it, all the nodes in it have their eyes on every single activity and as soon as there is some change in it, they get to know immediately.

Traceability

The most important thing about Blockchain Technology is that whatever activity takes place in it can be traced very easily, like at what time any transaction took place, how much amount was transacted to whom all these can be easily traced. could.

Fast Process

Generally, the banks that are there, take a lot of time to do any transaction, for example, if we want to send money from India to America, then it takes many hours and days, but with the help of blockchain technology, it Happens in a few minutes.

Where we have to pay a lot of fees in the bank to do these transactions, the same fee would have to be paid almost negligibly in the blockchain.

No 3rd Party

Due to being decentralized, there is no need for any 3rd party in Blockchain, where Rupee, Dollar, Euro are under the control of the government, whereas cryptocurrency is not under anyone's control due to Blockchain technology.

Disadvantages of Blockchain Technology

Cost

Using blockchain technology is very expensive, if you use it, then you have to pay network fees to use it, which is very high.

Although many blockchain platforms have found a solution, the problem still persists in the big cryptocurrencies such as bitcoin and ethereum.

Scalability

As more and more people use blockchain, its problem will increase and it will not be able to do transactions and other activities as fast. And Ethereum is also facing the same problem.

And to address this, Ethereum is now upgrading itself to Ethereum 2.0, and its co-founder Vitalik Buterin says this will greatly increase the speed of Ethereum.

High Power

There are still many blockchain platforms that use a large amount of electricity, and the biggest example of this is the world's most famous cryptocurrency, Bitcoin, which works on Proof of Work.

Bitcoin uses more electricity in a year than in countries like UAE, Netherland does not use electricity in a year, which is a matter of great concern.

Immutable

Once the data goes into the blockchain, it cannot be changed back, let's say you have 10 bitcoins, out of which you want to sell 5 bitcoins, which are worth crores, but you send them to the wrong address and by mistake, You send 10 bitcoins instead of one.

So once this transaction is done it cannot be refunded. That is, to say clearly, now you have lost all your bitcoins, forget them.

Here you cannot even complain to anyone, because it is a decentralized system, no one controls it, so there will be no one here to listen to your complaint. And this is its biggest disadvantage.

Real-world use of Blockchain technology

Apart from Cryptocurrencies, Blockchain Technology can be used in many places. There was a time when blockchain was used only in crypto and today it is being used in the real world. By using this we can save our time and a lot of money.

Financial Services

There was a time when Blockchain technology was called fraud, even Wikipedia itself deleted the article related to blockchain around the year 2010-11, but today Wikipedia takes payment in bitcoin.

Well-known big banks around the world like JP Morgan, Citi Bank, Morgan Stanley are using blockchain technology.

So that faster transactions can be done and time can be saved, similarly many banks in India have started using Blockchain technology. Whereat one time he was strongly against blockchain, today he is using it.

Smart Contract

There was a time when people used to contract simply and the opposite party agreed by signing on that contract but there was a lot of possibility of fraud in it.

But since the advent of blockchain technology, has made contracting a lot easier. Smart Contract is a computer program in which all types of contracts, agreements, terms, and conditions are made with the help of coding.

You can also call it a digital contract, which can be between two or more parties. Which is made with the help of coding, these smart contracts are automatically run and controlled with the help of Blockchain technology.

The main purpose of the smart contract is to remove the third party from the middle, once the smart contract is created, no one is required to run it, according to the terms and conditions, the smart contract continues to run according to the code that will be created.

NFT

If you know even a little bit about cryptocurrencies, then you must have heard the name NFT many times.

The full meaning of NFT is Non-Fungible Token, it can be an Art, Video Game, Music, Text, GIF, anything that is different and most different, NFT tells your Ownership that you can use this particular Art, Music, Video, etc. is the owner of.

NFTs are stored in the blockchain, which makes them much easier to track.

You can make and sell your NFTs on NFT platforms like Opensea, Raible, Binance Smart Chain and if someone buys your NFT and sells it to someone else, then you get some percentage of money on it.

Supply Chain

Blockchain technology is helping businesses a lot, if the business owner is aware that he has complete information about the goods used in his business from the time it is made to reach the customer, then that information can help him a lot.

At which place, what is the problem and why is it coming, due to which there will be transparency and the possibility of fraud or something wrong in the middle will be greatly reduced. And big retail companies like Walmart are using it.

Healthcare

Blockchain technology can be used very well in healthcare, the hospital can save the information of its employees, doctors patients, etc. on the blockchain. And when you want to use it, you can use it again through Private Key.

With this, whatever information is on the blockchain will be protected and confidential. And no one can change that data.

This is just a small glimpse, in the same way, Blockchain Technology can be used in many places. If I go to tell you then this whole article will fall short.

What is bitcoin?

As we have taken the name of Bitcoin in both the earlier parts. It is a type of cryptocurrency. Cryptocurrency means virtual currency. Which runs on Blockchain. Everyone has heard the name bitcoin for the past few months. You will also be surprised to know that while the year 2020 was a year of troubles for the country and the world, on the other hand, Bitcoin made its All-Time High this year. The value of bitcoin can be estimated from the fact that in 2010 the price of 1 bitcoin was less than just 0.06 US dollars (about 2.85 rupees), but now the price of one bitcoin is 30 lakh rupees. Our expert Kshitij explains that this has been possible because of Blockchain. Because it is so precious, secure, and popular because of blockchain.

What is bitcoin and who started it? Why are banks worried about this, know everything

What do experts have to say?

Now you must be wondering what is this blockchain? In response to this, Kshitij explains that it is made up of two words. The chain of the first block and the second chain. Block means a lot of data blocks in Blockchain technology. Meaning that cryptocurrency ie data is kept in these blocks. Different boxes contain currency data, and they are linked to each other. A long chain of data gets created. As new data arrives, it is entered in a new block. Once the block is filled with data it is appended to the previous block. Similarly, all the blocks are connected to each other.

The Complete ABCD of Cryptocurrencies

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Part-2: What is the stand of the Central Government regarding Cryptocurrency, will it be legal or banned in India?

What is data?

Each block contains the data, the hash, and the hash of the previous block. Now, what are these three things? Know this too. The data that resides in the Bitcoin blockchain contains the details of the transaction. Information like sender, receiver, and account are recorded in it. In these data blocks, data is encoded through cryptography technology and these blocks join each other to form a long chain. Each block contains a cryptographic hash of its previous block, a timestamp, and transaction data. Each block is connected to its next block.

What is Hash?

You can think of a hash as a biometric which is unique for everyone. That is, it is a kind of code. It is as unique as your thumb impression. If there is any change in the block, then it changes the hash code. All the blocks are virtually connected to each other. This is a kind of system in which there is no scope for tampering. If you change the data in one block, then you will have to change the data in the other block as well.

What happens after finding the hash?

When a miner secures a block by finding a strong hash, it is added to the blockchain and verified by other nodes in the network. This process is called consensus.

What happens after consensus is reached?

If the consensus is reached, the block is confirmed to be secure. If it is found to be correct, then the crypto coin is given to the miner who secures it. It is a reward that is considered to be proof of work.

What is crypto mining?

Buying through cryptography is called Cryptocurrency Mining because every piece of information has to be created digitally in the database. Those who do this mining are called miners.

Can it be hacked or tampered with?

Blockchain can be used not only in a currency like Bitcoin but also in many other sectors. It is a secure, safe, and decentralized technology that is almost impossible to hack or tamper with. But hackers can do anything.

What is Blockchain Technology?

In response, Gaurav Garg says that it is a kind of exchange process. Which runs on the data block. Each block is protected by encryption because these blocks are connected to each other through electronic means. This is very old technology. It was first adopted in 1991 by Stuart Huber and W Scott Stornato. The main purpose of its technology was to timestamp digital documents so that they could not be tampered with in any way. After this, in 2009, Satoshi Nakamoto revolutionized the world by inventing Bitcoin using blockchain.

What is the difference between Bitcoin and Blockchain?

There is a difference between the ground and the sky in both Blockchain Technology and Bitcoin. That is, both are completely different. Actually, Blockchain is a technology, a platform where not only a digital currency but also anything can be digitized and its record can be kept. That is, blockchain is a digital ledger. At the same time, Bitcoin is a digital medium, through which some things can be sold and bought. Although it is wrong to call it a currency because it has no value in the real world. Kshitij adds that however, bitcoin is just one example of a cryptocurrency; other cryptocurrency networks are also powered by blockchain technology.

What's going on in China regarding cryptocurrencies?

In recent weeks, China has taken a tough stance on crypto mining by shutting down operations in at least five provinces or regions rich in coal or hydroelectric power, with experts believing that China's own environmental policy is a key factor in crypto mining action. . In particular, China's carbon neutrality policy created an energy shortage within the country due to a sharp reduction in coal-fired electricity, which contributed more than 57% of the country's energy use.

What is the status of cryptocurrencies in which countries?

Gaurav says that the mining of cryptocurrency is banned in countries like China and Thailand. When China imposed the ban, the rates of bitcoin fell sharply. After that, it has now been banned in Thailand as well. The Thai Securities and Exchange Commission (SEC) has banned cryptocurrencies and non-fungible tokens (NFTs) over concerns about excessive betting. Horizon says that in recent weeks, China has taken a tough stance on crypto mining by shutting down operations in at least five provinces or regions rich in coal or hydroelectric power. The experts behind this belief that it has been done because of China's own environmental policy. However, cryptocurrencies will be legal or banned in India. The government has not said anything openly on this yet.

How Blockchain Helps Children's Education?

There has been speculation for some time about the potential use of blockchain in education. 92% of teachers say that technology has a big impact on the way students learn and interact with each other. One of those technologies that have positively impacted the learning process is blockchain. Learning Economy, a Washington DC-based non-profit company is using blockchain.

Using bitcoin's blockchain technology, the company is exploring a way to securely share skills, education, and work experience.