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Blockchain Technology: All You Really Need to Know

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blockchain fraud

The Blockchain is perhaps the most ingenious invention of Satoshi Nakamoto. Unfortunately, most of today’s population don’t even know how the technology works, and where it can be useful. Before we proceed to its various, let’s have a quick look at what the technology entails.

What is the Blockchain?

A Blockchain is a combination of two things, a block of data and a chain of blocks. A list of all transactions over a specific time is a block. Each transaction has a specific value. This value helps to interpret the data.

The chain is the chain of transactions done with a hash code. The encryption and trust of the technology is based on this hashing. The hash code is as unique as finger print technology. Consequently, it locks the data by time and order once the nodes approve it. Since it is a one way function, it cannot be decrypted.

In a Blockchain network, nodes verify records, and store them in blocks. People operate the nodes, and can be quite expensive. Similarly, a node operation can be complex and time consuming. The incentives for operators managing or operating a node is payment in cryptocurrency. Naturally, this technology is the underlying infrastructure for cryptocurrencies.

Durability & Robustness of the Blockchain

For any technology to thrive, it has to be durable and robust. Blockchain technology is no different. Naturally, the technology comes with built in durability, which makes it easier to harness in other industries.

Node & the Blockchain

Since the Blockchain implements the node concept, it cannot be controlled by a single entity. Additionally, it doesn’t have a single point of failure. Ever since its inception, the Bitcoin Blockchain has been working without noteworthy disruption.

Another advantage of the technology is that it is incorruptible and transparent. Since it is a public network, transparency is an embedded feature. Therefore, no one can corrupt the Blockchain by altering a unit of information. Since any change in a unit need verification from nodes, fraudulent activities require more effort.

While it might be possible to modify a unit without alerting the nodes in theory, it is impossible in practice. Additionally, taking control of the nodes will destroy the value of the network, as is the case with Bitcoin. Essentially, the nodes act as administrators of the whole network. This means, in addition to verifying, the nodes can also ‘mine’ coins. However, the mined coins will have to be verified by another node for it to be effective.

 

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