Blockchain is a word commonly associated with cryptocurrency and today, it is more commonly referred to as the Distributed Ledger. However, many do not know that though these two are related, blockchain can (and is) used for various other things besides cryptocurrency. Essentially, cryptocurrency needs blockchain to exist but blockchain does not need cryptocurrency to exist, just as emails need the internet but the internet does not need emails. It is deemed the most important invention in this century by a lot of tech experts. Here are all the basics about blockchain to get you started. What is Blockchain? Harvard Business Review describes blockchain as
“An open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.”Blockchain is composed of blocks which contain lists of records. These records are linked together via cryptography. What connects the blocks to each other is a thing called cryptographic hash or hash for short. The blocks are also linked to each other with timestamps and transaction data. Blockchains cannot be modified, meaning it is immutable. It can be viewed by everyone through the distributed ledger managed by a peer-to-peer network. This makes it extremely vital as every transaction and records stay permanent and transparent. The History of Blockchain Created by Satoshi Nakamoto, it was built as a public transaction ledger for Bitcoin, according to The Economist. It was created to ensure Bitcoin transactions will be secure and that there will be no double-spending since they do not have any kind of trusted authority or central server governing it. Nakamoto wrote that they actually began coding it in 2007 and the first bitcoin network called block number 0 which rewarded 50 bitcoins existed on 3 January 2009. Satoshi Nakamoto is a pseudonym for a person or a group of people, and their true identity remains unknown to this day. Benefits of Blockchain
- Storing Information
- Cryptographic puzzles must be solved to create the block. When a computer solves the puzzle, it shares the information to other computers which share the network. This is called proof-of-work.
- The network of computers will verify this information and if it is true, then the block will be added to the chain.
- The complex cryptographic puzzle and the verification from those other computers from the network create trust for every block on the chain.