What is Blockchain? And What’s in it for You?
Blockchain is the biggest opportunity set we can think of over the next decade or so. — Bob Greifeld, Nasdaq Chief Executive
I am sure you might have heard about it or have some knowledge about it by now, if not then well, now you have heard about it. In this article, I aim to explain to you what is blockchain and why you should know about it.
In order to understand something, it’s important to know the history. So once upon a time…ahhhhh! No, let’s not deep dive into it now. Below is the list of milestones (or checkpoints) to note the rise of blockchain.
- A cryptographically secured chain of blocks is described for the first time by Stuart Haber and W Scott Stornetta
- Computer scientist Nick Szabo works on ‘bit gold’, a decentralized digital currency
- Stefan Konst publishes his theory of cryptographically secured chains, plus ideas for implementation
- Developer(s) working under the pseudonym Satoshi Nakamoto released a white paper establishing the model for a blockchain
- Nakamoto implements the first blockchain as the public ledger for transactions made using bitcoin
- Blockchain 2.0 is born, referring to applications beyond currency. The Ethereum blockchain system introduced
- IBM announces a blockchain strategy for cloud-based solutions. Countries recognizing the legitimacy of blockchain and cryptocurrency
- Facebook commits to start a blockchain group. Bitcoin almost reaches $30,000 and continues to grow
What exactly is Blockchain?
Blockchain in simple terms can be understood as a chain of blocks that can carry certain information. Depending on the use case and application, the information can vary. A single block consists of three entities:
- Transaction data(Information)
- Nonce- A 32-bit whole number that generates a unique Hash for a block
- Reference of previous block’s hash
To create a block, one needs to solve the complex math problem of finding the nonce that can generate the acceptable hash, which is not so easy. Once the accepted hash is generated after a lot of computations and efforts, the data is signed in the block and it gets connected to the chain. The person which does this is called as miner. In order to make a change in a block, it not only requires to re-mine one block but also all the previous blocks which are linked to it, and hence it’s nearly impossible to manipulate blockchain technology.
Once a block is mined, it is then verified by the nodes in the network. Nodes are nothing but pools of blocks. So as the system is de-centralized, every node has its own copy of the blockchain and no one system would have control over it instead, there is a Distributed Ledger that logs all the actions happening between the blocks which thereby makes the system transparent. The diagram below can help us in understanding this with an example
The core reasons this technology and underlying applications are being recognized are:
- Promising more Secure and scalable systems which are revolutionizing the IT industry.
- Decentralized Approach- There will be no control of central authority over the system, instead it will be managed/validated by every node in the network.
- Ample of use cases and projects with the basic principle of blockchain in its core, a few of which are Cryptocurrencies, Smart contracts, Safer transactions, and NFT Marketplaces.
- Open Source- Almost all the prominent projects are available to the public and they can contribute to the same.
Impact on Developers community
Anything that can conceive of as a supply chain, blockchain can vastly improve its efficiency- it doesn’t matter if it’s people, numbers, data, money. — Ginni Rometty, CEO IBM
This rise and Significant features are encouraging developers and engineers to experiment and create systems on the blockchain. The impact is huge as it has a lot more potential than just cryptocurrencies.
source: LinkedIn (2020)
I hope we now have basic knowledge of blockchain but it would be more clear if we could see all of this in working right? Let’s not worry, cause I have it covered😎
I would be happy to read your thoughts on this and if you have any feedback /references, you can mention them in the comments belove. Thank you so much for your time. 🙂