Basics of Blockchain technology

Blockchain technology is popular these days. In this blog, let us understand some of the basic concepts.

What is blockchain?

Why do we need this blockchain?

How does blockchain ensure trust?

Who invented it?

When to use it?

When not to use it?

Let us start.

What is blockchain?

In simplest words, blockchain is a chain of blocks. Okay, then what are blocks? Blocks contain some information:

  1. Transaction details

  2. Participants

  3. Something unique about that block

So, block is a digital information holder.

Okay, now why do we need this blockchain?

Blockchain is like a ledger or a record keeping book. Problem with record keeping book is that anyone can steal it or modify it. However, blockchain overcomes this problem. 

But how does blockchain ensure trust?

  • Blockchain is like a distributed ledger. Instead of one person owning it, here ledger is collectively owned.

  • Okay, now since it is a distributed ledger, consensus of the majority is needed to change or write new information on a block.

  • Further, once data has been written on a block, it cannot be changed retroactively since we cannot fool all.

Who invented it?

A person (s) by the name Satoshi Nakamoto in 2008 whose identity we don’t know yet.

When to use it?

When there is a need for decentralization or need for a shared ledger/database.

When not to use it?

Since transactions take time in blockchain and consume lots of resources, if there is a need for faster performance then blockchain is not suited.