What is Block Chain?
Blockchain is a technology where Bitcoin or other services
are transferred from one individual to other individual successfully.
Bitcoin is a type of digital currency where record of
transactions are maintained and new units of currency are generated by
computational solution of mathematical problems also it operates individually
to central bank.
Example:
If Person A need to send money to person B who resides in
London, obviously Person A needs a help of a trusted third party e.g. Bank/Western
Union etc, in this process it may takes nearly (1-3)days along with some extra
charges. But using Blockchain technology this amount can be send to anyone or
to anywhere who resides wherever in the world, it takes in minutes and
transaction fees is less compared to Third Party charges.
Simply say with the help of mobile phones we can talk
directly to our friends but through the same mobile if you want to buy
something then you need a Third person who guarantees the seller that an amount
has been credited. But is it Possible that buyer and seller would have an
understanding without any Third Party. Blockchain is the technology which makes
such transaction possible.
Block chain is a distributive database where data is stored
in 100’s or 1,00,000’s of computers. Here data is encrypted and recorded in
private basis.
Invention
Block chain is invented in 2008 S.Nakamoto(Pseudonym)
invented this from Bitcoin service, to serve as public transaction ledger of crptocurrency bitcoin.
Blockchain Technology
Block chain is such technology which acts a medium to send
money to anyone wherever he may reside, without any help of banking sector.
Block chain is started because of Bitcoin but new services are also joined
through Block chain. It is an open ledger, where for any network the people who
were connected with the network knows
well, who is the payer and payee and how much is to be paid. So no chances to
tamper. And in that network everyone eventually can decide either the network
is valid or not. If any transaction is
made then no worries that transaction would highly recorded in 1000’s of
computers.
Another important thing that we would mention hacking a
Block chain is not even an easy task because to do this hackers need to hack
1000’s of computer at a time which is highly equal to impossible so it is a
safe technology.
Block chain is first used in 2008 when digital coin bitcoin
is invented. Bitcoin is a decentralized cryptocurrency which is not under any
bank or any country as mentioned above. The use of Block chain has been started
through cryptocurrency but its use slowly been trying by government and public
sector. E.g. Government or legal paper which has been used through a public
register is a proof that for this property an owner is hereto. But now there is
a vast scope of placing Block chain instead of public register in future
because document registered in Block chain is as much as valuable in Public
register.
Block chain if becomes becomes Public Register no chances of
fraud to occur, Block chain is safe technology where even the stored data could
not be erased, e.g., if incase a computer RAM or Hardisk got damaged it may not
work but in Block chain 1,00,000’s of computers are working under this 1,2 or
100’s of computers even if are damaged still transaction is continued. Today in
Block chain cryptocurrencies has been used in coming days banking sector would
work on this because it is easy and safe. In Block chain every computer system
history is recorded and been stored and the data is totally private where to
enter a new partner need an approval of particular network partners. For any
digital information makes safe and secure Block chain has been used each and
every department would adopt Block chain technology either it may be university
or passport services if it would be recorded on Block chain then Zero chances to hack by
hackers.
As Per Government Schemes Poor people need help or students
scholarship or any natural calamity victim then through Block chain technology
amount will directly reach to people through phones. Through this corruption
chances due to Third Party may not occur at all and the victim or person would
would receive total amount.
Working of Block
Chain Technology:
Let me explain through some Illustration:
Illustration 1: Assume Girl 1 who is innocent enjoyed her
Trip in London with great experience and a huge shopping like jewels and
dresses,etc. and returned India and shared her experiences with Girl 2 all
about her shopping in London. This Girl 2 is cunning and clever she conveyed
the same content with bit changes to Girl 3 that Girl 1 went to Kolkata and had
a great experience and shoppings too. Now Girl 3 is little more clever then
Girl 2 she coveyed the same content with bit more change that Girl 1 went went
to local shop and bought all those in cheaper malls. Now what was the Actual
content that Girl 1 went to London and had a great experience and shopping but
what content coveyed to last Girl 4 that she went to some local shops and bought
all those in cheaper malls. Here what we can see is content started something
but till it reaches to last person content has totally been changed. The
information how its been originated should reach in the same prospect to last
person.
Let’s come to objective
So Replacing information let us use Bitcoins as Per Block
chain.
Girl 1 Transaction à Girl 2 Transaction
à Girl 3 Transaction
1 Paid 2 Ã
10 Bitcoins
So 1Ã -10
Bitcoins
And 2 Ã +
10 Bitcoins
|
2 Paid 3 Ã
10 Bitcoins
So 2Ã -10
Bitcoins
And 3Ã +
10 Bitcoins
|
3 Paid 1 Ã
20 Bitcoins
So 3Ã -20
Bitcoins
And 1Ã +
20 Bitcoins
|
This should be the original transaction where girl 1 paid 10
Bitcoins and so as Girl 2 pay 10 bitcoins to Girl 3, but if incase Girl 1 pay
10 bitcoins to Girl 2 and as Girl 2 is clever and only pay 5 bitcoins to Girl 3
then the transaction becomes invalid become the propect is show clear that
errors could be clearly visible.
This concept actually originated in 1991 but started using
in 2008, now its been a famous when Bitcoin became popular. Now how Bitcoin
works.
Transaction 1 Ã Transaction 2 Ã Transaction 3
A Paid B Ã
10 Bitcoins
So AÃ -10
Bitcoins
And BÃ +
10 Bitcoins
|
B Paid C Ã
10 Bitcoins
So BÃ -10
Bitcoins
And CÃ +
10 Bitcoins
|
C Paid A Ã
20 Bitcoins
So CÃ -20
Bitcoins
And AÃ +
20 Bitcoins
|
Note: Hash
means any transaction finger print or you can say a digital signature or a
thumbprint. Previous hash means
in earlier if me make a transaction then it stores
If Instead of 10 Bitcoins I change 5 Bitcoins the
Fingerprint changes. If any small thing I try to change then automatically
finger print changes. It means for a particular transaction only this is the
unique finger print.
Previous Hash will be hash of transaction 1 now e.g., if transaction
we change B paid C as 5 Bitcoins then what happens the hash in transaction 1
changes as ACHKL021 which completely mismatches. It indicates that the Block
chain is tampered/hacked/fraud so is not valid. Coming to 3rd
transaction the previous hash would be the hash of 2nd transaction
(so as applicable in transaction 1&2).
Through this table what we can completely understand is how
the data originated will reach to the last person in same sense.
Now coming to hack this data let us hack then let me change
the Bitcoin and also the hash transaction 1, also let us change hash and
Previous hash in same as Transaction 2 and 3 also.
Note:
Proofs of Block chain
Concept :
1. It takes approximately 10minutes to
generate one hash valueà It keeps on getting
tougher and tougher.
2. Multiple copies of chain are maintained
1. It takes
approximately 10minutes to generate one hash valueà It
keeps on getting tougher and tougher.
If I would generate a finger print either in A to B
transaction or hash value then I would mention that it takes 10 minutes to
generate a finger print. Now how big the chain is, it takes such time either it
may be 10minutes/15 minutes/20 minutes, now such transaction takes place in
crores. To change only a hash value it takes 10minutes now think that to change
values/transaction/fingerprint.. how much time will it take 10minutes * 1
change = 1crore minutes nearly it takes 2years.
2. Multiple copies of
chain are maintained.
Now we heard that Bitcoin is a distributive network not a
central depository which is a main single ledger and keep going on. It is a
Peer to peer network/distributed network whoever wants to generate crypto
currency they must have copy of this ledger.
Person 1:
A Paid B Ã
10 Bitcoins
So AÃ -10
Bitcoins
And BÃ +
10 Bitcoins
|
B Paid C Ã
10 Bitcoins
So BÃ -10
Bitcoins
And CÃ +
10 Bitcoins
|
C Paid A Ã
20 Bitcoins
So CÃ -20
Bitcoins
And AÃ +
20 Bitcoins
|
C Paid A Ã
20 Bitcoins
So CÃ -20
Bitcoins
And AÃ +
20 Bitcoins
|
Person 2:
A Paid B Ã
10 Bitcoins
So AÃ -10
Bitcoins
And BÃ +
10 Bitcoins
|
B Paid C Ã
10 Bitcoins
So BÃ -10
Bitcoins
And CÃ +
10 Bitcoins
|
C Paid A Ã
20 Bitcoins
So CÃ -20
Bitcoins
And AÃ +
20 Bitcoins
|
C Paid A Ã
20 Bitcoins
So CÃ -20
Bitcoins
And AÃ +
20 Bitcoins
|
Person 3:
A Paid B Ã
10 Bitcoins
So AÃ -10
Bitcoins
And BÃ +
10 Bitcoins
|
B Paid C Ã
10 Bitcoins
So BÃ -10
Bitcoins
And CÃ +
10 Bitcoins
|
C Paid A Ã
20 Bitcoins
So CÃ -20
Bitcoins
And AÃ +
20 Bitcoins
|
C Paid A Ã
20 Bitcoins
So CÃ -20
Bitcoins
And AÃ +
20 Bitcoins
|
These are the
multiple copies where every person in the network carries a copy of
transaction, Now assume that the 2nd person seems little clever and
changed the hash as given below
Person 2:
A Paid B Ã
10 Bitcoins
So AÃ -10
Bitcoins
And BÃ +
10 Bitcoins
|
B Paid C Ã
10 Bitcoins
So BÃ -10
Bitcoins
And CÃ +
10 Bitcoins
|
C Paid A Ã
20 Bitcoins
So CÃ -20
Bitcoins
And AÃ +
20 Bitcoins
|
C Paid A Ã
20 Bitcoins
So CÃ -20
Bitcoins
And AÃ +
20 Bitcoins
|
Now comparing Person 2 copy with Person 1 & 3 Person 2
transaction appears little different, it means fraud has been happened in this
case. So Bitcoin Block chain eliminates 2nd transaction as it is an
invalid transaction and copy the correct transaction and enter such transaction
in Person 2 database. This is how Block chain works. To develop our country a
proper technology should be adopted.
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