Blockchains are incredibly popular nowadays, due to the emergence of cryptocurrency such as bitcoin, but this technique was originally described in 1991 by a group of researchers and was originally intended to timestamped digital documents so that it’s not possible to backdate them or to tamper with them almost like a notary. However, it went by mostly unused until it was adapted by Doce Nakamoto in 2009 to create a digital cryptocurrency Bitcoin, now a blockchain as a distributed ledger that is completely open to anyone. 

What is a blockchain?

As the name indicates a blockchain is a chain of blocks that contains information.


 How do they work?


 What problems do they solve and how can they be used? 

Blockchain data
                                        blockchain works

They have an interesting property. Some data has been recorded inside the blockchain. It becomes very difficult to change it. So how does that work? Well, let’s take a closer look at a block. Each block contains some data, the hash of the block and the hash of the previous block. The data that is stored inside a block depends on the type of blockchain, the Bitcoin blockchain, for example, stores the details about a transaction here, such as the sender-receiver and the number of coins a block also has a hash.

blockchain hash

You can compare a hash to a fingerprint. It identifies a block and all of its contents, and it’s always unique, just as a fingerprint. Once the block is created, its hash is being calculated, changing something inside the block will cause the hash to change. So in other words, hashes are very useful when you want to detect changes to blocks. If the fingerprint of a block changes, it no longer is the same block. The third element inside each block is the hash of the previous block, and this effectively creates a chain of blocks and it’s this technique that makes the blockchain so secure.

blockchain explain

 Let’s take an example here. We have a chain of three books. As you can see, each block has a hash and the hash of the previous block. So block number three points to block number two and number two points to number one. Now, the first block is a bit special. It cannot point to previous blocks because while it’s the first one, we call this block the Genesis block.

Now, let’s say that you tamper with the second block. This causes the hash of the block to change as well. In turn, that will make block three and all following blocks invalid because they no longer store a valid hash of the previous block. So changing a single block will make all the following blocks invalid. But using hashes is not enough to prevent tampering. Computers these days are very fast and can calculate hundreds of thousands of hashes per second.

blockchain explain
blockchain explain

You could effectively tamper with a block and recalculate all the hashes of other blocks to make your blockchain valid again. So to mitigate this, you have something that is called proof of work, it’s a mechanism that slows down the creation of new blocks. In Bitcoin’s case, it takes about 10 minutes to calculate the required proof of work and add a new block to the chain. This mechanism makes it very hard to tamper with the box because if you tamper with one block, you’ll need to recalculate the proof of work for all the following blocks.

So the security of a blockchain comes from its creative use of hashing and the proof of work mechanism, but there is one more way that blockchain secures themselves, and that is by being distributed, instead of using a central entity to manage chain blockchains, use a peer-to-peer network and everyone is allowed to join. When someone joins this network, he gets a full copy of the blockchain. The node can use this to verify that everything is still in order.

Now let’s see what happens when someone creates a new block. That block is sent to everyone on the network. Each node then verifies the block to make sure that it hasn’t been tampered with. And if everything checks out, each node adds this block to their own blockchain. All the notes in this network create consensus. They agree about what blocks are valid and which aren’t. Blocks that are tampered with will be rejected by other nodes in the network.

So to successfully tamper with a blockchain, you’ll need to tamper with all the blocks on the chain, redo the proof of work for each block, and take control of more than 50 per cent of the peer to peer network. Only then will your tempered block become accepted by everyone else. So this is almost impossible to do. Blockchains are also constantly evolving. One of the most recent developments in the creation of smart contracts. These contracts are simple programs that are stored on the blockchain and can be used to automatically exchange coins based on certain conditions.

You can watch videos on Blockchain smart contracts. The creation of blockchain technology peaked a lot of people’s interest soon, others realized that this technology could be used for other things like storing medical records, creating a digital notary or even collecting taxes. So now you know what a blockchain is, how it works on a basic level, and what problems it solves once to learn how you can implement a simple blockchain and JavaScript.

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