Today we will guide you through “All You Should Know about Blockchain”. So what’s a Blockchain? A blockchain is a public journal of all Bitcoin transactions that have ever been executed. It is continuously growing as ‘completed’ blocks are added to it with a new set of recordings.
The blockchain is a sort of disseminated consensus system, where no one person controls all the data. Thus far it’s gotten the most press as the technology behind bitcoin, but everyone agrees that bitcoin probably isn’t the blockchain’s killer app. The cryptography team at Blockstream recently launched its first prototype “sidechain,” which functions as a separate ledger with its own code. Sidechains allow for easier verification. Blockstream and the sidechain projects that follow will turn the blockchain into a universal platform that can be used for anything requiring signatures or authentication. It will disrupt entire industries.
The blockchain enables people to participate in “trustless” transactions, eliminating the need for an intermediary between buyers and sellers. And it possibly eliminates the need for all intermediaries in most transactions, even those outside finance. The 21 Bitcoin Computer, is a small, bare bones, Linux-based piece of hardware in which the bitcoin protocol is a feature of the operating system. Any products or services built with it — games or music or any online content—would have bitcoin built in as a component. It assimilates bitcoin so seamlessly into devices that you’d never know that you’re using the blockchain at all. It has the potential to eliminate thousands of intermediaries, such as payment services companies.
The blocks are added to the blockchain in a linear, chronological order. Each node (computer connected to the Bitcoin network using a client that performs the task of validating and relaying transactions) gets a copy of the blockchain, which gets downloaded automatically upon joining the Bitcoin network. The blockchain has complete information about the addresses and their balances right from the genesis block to the most recently completed block.
The blockchain is seen as the main technological innovation of Bitcoin, since it stands as proof of all the transactions on the network. A block is the ‘current’ part of a blockchain which records some or all of the recent transactions, and once completed goes into the blockchain as permanent database. Each time a block gets completed, a new block is generated. There is a countless number of such blocks in the blockchain. So are the blocks unsystematically placed in a blockchain? No, they are linked to each other (like a chain) in proper linear, chronological order with every block containing a hash of the previous block.
To use conventional banking as an analogy, the blockchain is like a full history of banking transactions. Bitcoin transactions are entered chronologically in a blockchain just the way bank transactions are. Blocks, meanwhile, are like individual bank statements.
Based on the Bitcoin protocol, the blockchain database is shared by all nodes participating in a system. The full copy of the blockchain has records of every Bitcoin transaction ever executed. It can thus provide insight about facts like how much value belonged a particular address at any point in the past.
The ever-growing size of the blockchain is considered by some to be a problem due to issues like storage and synchronization. On an average, every 10 minutes, a new block is appended to the block chain through mining.
Great, now you know the concept behind blockchain in the Bitcoin network. Feel free to comment your idea about the future of Blockchain in the comment box below 🙂