Blockchain is a growing list of records represented as blocks which are linked to each other cryptographically.
The blockchain was invented by a person (or group of people) using the name Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin. The identity of Satoshi Nakamoto remains unknown to date.
What all is present in the block?
2. Previous hash: 64 characters. Hash of previous block
3. Hash: Uses cryptographical algorithm like SHA256 to store all the information in a block using 64 characters (0-9 and a-f). It is created based on the information in the block. This algorithm gets applied in every block
Hacking blockchain is not easy. The blocks are interlinked and thus hash of previous block is available as previous hash in current block. If anyone tries to tamper the hash, it gets compared to previous hash and the change is rejected. This is why it was proposed to use blockchain in banking industry. The reason this idea was rejected since the personal information is hidden. There is no way to track the person.
Properties of hash algorithms:
1. One way conversion: Information is converted into 64 characters using algorithm like SHA256. You cannot use the 64 characters to trace back the information
2. Fast computation: Computation is very fast
3. Avalanche effect: Blockchain follows the concept Avalanche effect, where a slight change in the input results in a significant change in the output.
Advantages of blockchain:
It uses a digital signature feature to conduct fraud-free transactions making it impossible to corrupt or change the data of an individual by the other users without a specific digital signature.
Conventionally, you need the approval of regulatory authorities like a government or bank for transactions; however, with Blockchain, transactions are done with the mutual consensus of users resulting in smoother, safer, and faster transactions.
It is programmable and can generate systematic actions, events, and payments automatically when the criteria of the trigger are met.