Introduction to blockchain technology

Introduction to blockchain technology

In 2008, the publication of the blockchain as the foundation of the first ever decentralized cryptocurrency take place but proved a boon for peer-to-peer information exchange in the most secure, efficient, and transparent manner. The blockchain system is a public ledger which works like a log by keeping a record of all online transactions in chronological order, secured by an appropriate consensus mechanism and providing a fixed record. Its exceptional characteristics include unchanging, irreversibility, decentralization, resolution and individual. With these advantages, it has found applications in almost all fields requiring data sharing among multiple parties but with secure authentication, anonymity, and performance. Some of the best applications are finance, real-estate, and IoT, the banking industry etc. Despite having several benefits, the blockchain technology also suffers from various disadvantages, particularly reaching consensus in a vast network quickly, energy consumption in computation, and requiring storage of the entire chain for verification. Here we discuss blockchain and, its working in its principles. learn more on blockchain in bitcoin course

Throughout time, the information technology and communication system have undergone numerous transformations for facilitating easier, quicker, efficient and secure sharing and exchange of data, information, and funds in many ways. With the broadcasting of the Internet, digital communications emerged, empowering all forms of data and information interchange through online transactions, such as financial transactions for making most secure payments and receiving funds. The entire transactional and communication system goes through a trusted intermediary which not only guarantees safe and secure delivery but in case of financial transactions, ensures accurate changes being reflected in multiple accounts. This trusted party is doubtable in case of any failures in updating data or delays in delivery or any fraud. But with just a single network controller multiple questions arise: What if this trusted party becomes dishonest and cannot be trusted?. What if it is hacked and an attacker gets carry of all the data? This intermediary here acts as a single point of failure. The solution for all the above problems is provided by the blockchain technology, the underlying technology invented by Satoshi Nakamoto. you can also learn more in blockchain education

Blockchain exchange and transfer occur by means of a shared distributed ledger, which records all the details of every transaction occurred among the network participants without involving any trusted centralized party. Each copy of the ledger occupies in synchronization with all the involved parties, thus reducing the risk of a single point of failure. Bitcoin works on Public Key Infrastructure (PKI) in the blockchain for authenticating users and controlling al the access. For source authentication and identification, each transaction is digitally signed by the owner with a separate key. To keep a track of on all transactions occurring simultaneously, multiple transactions are grouped together in a structure called ‘block’ uniquely identified by its separate hash and timestamps.

Validations of blockchain

Validation of each transaction and the block, among potentially distrusted users, is done using an agreement mechanism, which means the state of the shared ledger is updated by the accord of the majority of nodes. This updating in case of bitcoin employs the proof-of-work consensus algorithm, whereby miners attempt to find a special value to achieve the block’s hash, less than a target value, which is usually set to avoid any dispute and establish trust. This target value is set in such a way that miners compete to find a nonce in around 10 minutes, hence the block generation time is 10 minute. This process by which nodes perform accurate computations, thus giving their resources to find the nonce is called mining and the nodes doing so are called miners. Through this mining, nodes compute the proof-of-work which is a form of achieving agreement among the distrusted modes. you can follow out tutorials in blockchain online course

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