Blockchain Basics:

Blockchain :

A blockchain is a digital, distributed ledger of all the transactions made in the system. It is open to anyone. The information is transferred to all the systems in that network, which results in a peer-to-peer network of systems. This technology emerged as a consequence of the cryptocurrency, bitcoin. As said by Sally Davies,

"Blockchain is to Bitcoin, what the internet is to email."

A blockchain is a chain of blocks that contain information about all the transactions. They’re immutable (very difficult to change), public, and shared which uses decentralization and cryptographic hashing as their primary feature. It is not possible to tamper with them, which preserves the integrity of the transactions.

What are Blocks in a Blockchain:

Each block contains some data, the hash of the block and the hash of the previous block. First, the data stored inside a block depends on the type of the blockchain. Second, a block hash is unique as it identifies the block and all of its contents. Once a block is created, the hash is generated. If we try to do any alteration in the block, the hash will change. So, it can be said that the hashes are very useful to identify any changes in the block. If the hash changes, it is no longer the same block. Third, a block contains the hash of the previous block. This results in the chain of blocks, which makes the blockchain secure. Each block points to its previous block. The first block cannot point to its previous block because it is the first block. This block is known as the genesis block. If the hash of any block changes, all the blocks after it will be invalid because they no longer store the hash of the previous block. But only by the use of hashing, we cannot prevent the tampering as computers these days are very fast and can recalculate all the hashes within seconds. To eliminate this problem, there is something called a proof-of-work mechanism.

Proof-of-work mechanism:

It is a mechanism that slows down the creation of new blocks making it very hard to tamper with the blocks. If one block is tampered with, proof-of-work’s recalculation has to be done for all the blocks which is very difficult to achieve. So, the security of the blockchain is majorly dependent on hashing as well as the proof-of-work mechanism. Also, as blockchain uses a peer-to-peer network mechanism, blocks that are tampered with will be rejected by other nodes in the network as each node has the full copy of the blockchain and they will not be able to achieve consensus due to the tampering in the blocks. Blockchains are constantly evolving. One of the recent developments in the creation of smart contracts. These are simple programs that are stored on the blockchain used to exchange coins automatically based on some conditions.

Applications:

Blockchain applications go far beyond cryptocurrencies and bitcoin. Some other major applications of blockchain include storing medical records, creating a digital notary, cross border payments, music royalties tracking, digital voting, etc.