If you think about blockchain technology, your first connotation
probably is Bitcoin. Nothing unusual. Bitcoin and other cryptocurrencies
were the first implementations of blockchain technology.
In the following paragraphs, I’ll try to explain what is blockchain and how does it work.
Try to imagine a distributed ledger used to register transactions. What is important, all
the transactions are saved, so that results in creating a chain. But blockchain isn’t only
full of information about transactions. It also contains smart contracts as a code. Each
one of the blocks is created approximately every 10 minutes. Blocks are filled with: block
header, size of a block, number of transactions and transactions themselves. Because of
transcription of blocks, there isn’t a chance to double spend Bitcoins. What’s more, blockchain
technology is characterized by publicity of all executed transactions. You can also check old
transactions in explorer blocks. If you make a mistake, there is no turning back as well. All
the transactions saved in blocks are unconvertible.
Why someone can’t imitate a block?
Hash of a block is a crucial element which guarantees uniqueness of transactions. Operation leads to creating a new hash is called proof of work. In easier worlds, this is how every block is signed. None of the blocks in blockchain technology can be pulled out of the chain. Why? Every block header contains a hash of the previous block. So if someone tried to change one piece of block, it would affect on all blocks. Hackers with that knowledge can think about imitating a chosen block, but it’s either impossible. Such an operation would require enormous computing power that’s why all the transactions in blocks can’t be changed.
Where can blockchain be used?
Internet of Things - tracking condition, history, exchange opportunities
Voting system - scattered, automatic counting votes with full history
Payments or loans Peer-to-Peer - global network of money order without any agents
Transport - renting rides, private drivers
Identity and verification - digital signatures, authorization
Smart contacts - automatically concluded and executed contracts that no one control but with high level of trust
… and much, much more. Every day new companies are discovering advantages of using blockchain technology in their structures.