Inside the Blocks that Makeup the Blockchain

The easy (and short) explanation of what blockchain is and how it works.

Blockchain in a nutshell

Blockchain is basically a public electronic ledger. It keeps a record of everything that happens on it, such as transactions and contracts. Three main things that blockchain is known for are trust, transparency, and privacy.

Trust

Ever since humans existed, we have relied on trust to stay alive- trusting that the cliff was strong enough to hold, trusting that everyone would do the job, trusting that there would be enough food to hunt and eat each day. That is, until 100 years ago. As society moves further and further away from the central government of trust, we feel an increasing need for it. Blockchain combines a network of many people in a P2P (or peer to peer) network of people who are constantly verifying transactions. Once someone joins the network, they receive a full copy of the existing ledger.

Transparency

Blockchain is 100% transparent. Unlike banks and corporations which operate through a middleman, blockchain is challenging the third party by creating an open decentralized database for any transactions which involve value.

Privacy

Bitcoin has a distributed ledger that gives each person on the network equal reliability. It operates on the 51% rule, in which the network must reach a general consensus (a majority agreement) in order to terminate or carry out big tasks that would alter any blocks. This makes it virtually impossible to hack, as well as making it difficult to tamper with any previously recorded information on the blockchain. Although the transactions made are not completely anonymous, the only public information that is susceptible to hacking is a personal username or something that someone solicited about themselves.

The Blocks

The blockchain is made up of blocks. Amazing. Each block contains its personal data, its personal hash, and the hash of the previous block. The hash on each block is completely unique, not unlike human fingerprints in the sense that there are no two identical ones. Each block also carries the hash of the previous block in order to prevent tampering or editing of previous blocks.

Creating the BlockCHAIN

New blocks can only be added on at a rate of 10 minutes per added block. This is a fail-safe to guarantee that the system is not flooded and allows time for all of the information to reach a consensus. As the blocks are connected, each block records the hash of the previous block.

The previous hash, which is recorded on every block, cannot be changed without the consensus, which means that if the beginning block was tampered with (the blue one in this case), then all of the rest of the blocks would be nullified since the second block (the orange one) would then have the wrong “previous hash.”

Blockchain Applications

There are so many ways that blockchain can be used to help people, but most of them aren’t in use! One such way is voting. Especially in the United States, there are always debates and rumors of political interference between elections and in votes during campaigns. The problem is that we have a non-secure voting system- where voters can be miscounted, hacked, or interfered with. If we were to use blockchain, then we would be able to have a relatively anonymous voting system and one that cannot be hacked. Other ways that we could possibly use blockchain in the future are in health records, ownership, and partnerships, for example.

Although not in a perfect state yet, blockchain is taking great leaps as more people hop on the tech and really dive deep into learning how we can use this technology to impact billions.