The blockchain was invented in 2008 by Satoshi Nakamoto, who published the first whitepaper under the pseudonym “Satoshi Nakamoto.” The blockchain is a public ledger that records all transactions across all users. It is distributed, meaning no single entity controls it; rather, it is maintained by a network of computers. Blockchain technology is a distributed database technology that uses cryptography to secure data transfer. Cryptography is the practice of converting information into an unintelligible format known only to those who possess special keys. In simple terms, it’s a digital ledger of transactions that are verified by network nodes (computers) rather than being controlled by a central authority.
A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block contains a timestamp and link to the previous block. The blockchain is decentralized, meaning no single entity controls it. Instead, anyone can download the full blockchain and verify the validity of any given block.
Facts about Blockchain
Because the blockchain is decentralized, it is extremely difficult to change anything about the history of bitcoin transactions without changing every subsequent block.
There are many different cryptocurrencies out there today. Most of them use blockchain technology as their backbone. Bitcoin was the first digital currency that was introduced and has been the most popular until now.
The blockchain is transparent, immutable, and open-source. These three characteristics make it perfect for tracking ownership of assets.
No single company owns the system of blockchain; instead, everyone shares the responsibility, and this is the reason it is not centralized.
The blockchain does not require permission which means anyone can join the network at any time and start verifying transactions. This can be a threat to security sometimes.
One benefit of using blockchain is that you don’t have the involvement of third parties, and this means there are no trust issues.
How Does the Blockchain Work?
The blockchain serves as a public record of all bitcoin transactions. Every time someone sends bitcoins, they enter the transaction into the blockchain. As soon as the transaction is recorded, it becomes permanent and unchangeable.
When a user wants to send bitcoins to another user, both users need access to the same blockchain. To do this, each user downloads the entire blockchain onto their computer. Then, each user checks if the current block is valid by comparing it to the last block. If the two blocks match, then the transaction is confirmed.
Once a transaction is complete, the bitcoin network automatically creates a new block that links to the completed transaction.
Read more about the blockchain and how it is used in the book The Block by John McMickle, which is a complete guide on the blockchain. In the novel, the author depicts a story of how the world would be when all of us started using cryptocurrency and blockchain. The book is a fictional story that takes thriller and knowledge together. A perfect read for you if you gain an interest in the future of the world.