Basics of Blockchain & Bitcoin (Cryptocurrency)

Category: Technology

First proposed in 1991 as a research project, blockchain has now gained momentum and is more likely to stay as the technology has already been implemented and explored to make business and government operations more accurate, efficient, secure, and cheap with fewer middlemen and manipulations. A block comprises of three basic elements namely: Data-structure blocks containing data or programs. A random whole number, which is a 32-bit (4 bytes) field, is adjusted by the miners to generate a block header hash. The hash is a 256-bit number associated with a nonce. Generally starting with a series of zeroes. Blockchain is also known as Distributed Ledger Technology (DLT). A blockchain has data stored in ‘’blocks’’ of information and then linked together in a permanent “chain”. Every time a new block is added the previously added block becomes harder to modify, over time the old blocks become more and more secure. Several factors make this technology difficult to alter thereby making the whole process transparent. These blocks are added to the system by miners. Every block that enters the system has a unique set of combination identities; every time a new block is added miners have to make sure that the previous combinations are not used. Out of a possibility of four billion combinations once the miner has found the “golden nonce” the block is added to the chain. Making a change or correction to a previously mined block is not possible and would require re-mining of the said block, and then ones that follow. It is extremely difficult and time-consuming to orchestrate successfully mined blocks. This is because a miner spends a lot of time computing the combination of the “golden nonce”. Once the block is generated and accepted by all the nodes on the network the miner is rewarded financially. However, in bitcoin, a collection of commuters is used to store its blockchain. But each computer is operated by a different individual or a group of individuals. These computers make Bitcoin’s network called nodes. This makes the decentralization of Bitcoin possible. There is also a possibility of centralization of Bitcoin, where these computers are privately owned by a single entity. A bitcoin’s decentralized and irreversible nature makes the entire chain transparent since each transaction can be viewed using a personal node or by using a blockchain explorer. Every node has an updated fresh block verified and added enabling you to track the Bitcoin wherever it goes. As of November 2020, the block’s height had reached 656,197. Hacking an insurmountable number is an expensive and time-consuming feat to achieve since a hack would require altering 51% copies of the block since the one hack block would no longer align with everyone else’s as they would have different time stamps and hash code. Making a blockchain a reliable way of storing data and numerous other transactions. Numerous businesses can incorporate blockchain F&B by tracking their food product’s route from origin to delivery, Banking can initiate and complete transactions within 10 minutes despite working or non-working hours. However, the most interesting and significant discovery is of Blockchain forming the bedrock for cryptocurrency like Bitcoin. However, industries like healthcare and real estate are also considering the possibility. It can also be beneficial in voting moving forward.