WHAT IS BLOCKCHAIN?

Recently, a friend asked me to explain Blockchain to him and I referred him to Google. He left Google more confused, came back to me, and requested that I explain to him like he was a 10-year-old. I did. Yesterday, I searched Google for the definition of Blockchain out of sheer curiosity, and I was a tad annoyed at what I found on its first page. It seemed like everyone was trying to outdo one another for the most jargon-filled blockchain article, with a sprinkle of SEO tricks. My friend’s frustration made sense– it didn’t at first.

Blockchain and Web3 are the latest, and hottest buzzwords on the internet right now. Unlike most buzzwords; these are not fads that would go away soon. Blockchain technology, dubbed ‘The Internet of Money’ will disrupt a lot of industries, could also impact your life in a lot of ways, and brings with it a lot of life-changing opportunities. Therefore, you must pay attention. Understanding blockchain is crucial if you want to join the revolution. It’s still very early; if you are one of the people who would like to grab your early spot and ride the opportunity wave.

My aim is to help you on your Web3 journey by simplifying the concepts from the beginner to intermediate, and subsequently, advanced level.; one post at a time.

What really is Blockchain? When blockchain is mentioned, Bitcoin comes to mind for most people. Blockchain is not bitcoin; it is the technology behind bitcoin. As its name implies, a blockchain is a chain of blocks.

A block is a collection of records, depending on the product. For Bitcoin, it is a collection of transactions; for some, it can be medical data, and for others, it can be smart contracts( topic for another post). Blockchain technology is not recent; it was originally described in 1991 and was intended to be a timestamp for digital documents so that it’s impossible to edit them or backdate them.

It was adopted and made popular by Satoshi Nakamoto, the creator of Bitcoin in 2009.

The transactions that can be stored in a block have limits. For instance, bitcoin has an average of 1,500 transactions per block. Once a block fills up, it is added to the network via mining. Another block is created. It goes on until it forms a chain of blocks.

One of the major reasons for the security of Blockchain is that it’s a distributed network: a Peer to Peer technology. This means anyone can join a blockchain network as long as they have the computing power. Mining involves very high computing power. Anyone who joins gets the full copy of all the blocks in the chain from the first block. The first block on a blockchain is called the Genesis Block.

A new block is sent to everyone on the network. If there are 10,000 people(node validators) on the network, all of them will receive it and verify that it has not been tampered with before they pass the block to the blockchain. If tampered with, it is rejected. This is called the Consensus Mechanism. The supercomputers that used are called nodes. They store the blockchain data.

A block has these components which also ensure its security: Data or Information. The hash of the block The hash of the previous block. The timestamp

Examples of information are; X pays Y 70 usd Y's biometric data. P just deployed a smart contract..

Hash The hash of a blockchain is referred to as the digital fingerprint of the information on the blockchain. A hash identifies a block and all of its content. It is always unique. No two pieces of information have the same hash output. The same data will always give the same output.

Blockchain utilizes SHA256 cryptography. SHA means Secure Hashing Algorithm. 256 means it has 256 0s and 1s. The output is usually a limited number of combinations of letters and numbers. The tiniest of changes in the input change the output a lot.

E.g the SHA 256 Output for ‘Oluchi Judith’ 53af3dc3bdfa62a55924f9a0a0c93393baee6b054d2a9a5198cb18cad4437253

OluchiJudith: 6726ce3c876aeb3a3b493b09f9c7db87dd6f71cf15c4ac4d410e188b7fef64da Can you see how much the output changed when I removed the space between the two words?

If you input the entire texts of the Bible; the output will not exceed the length of the output above, and the output will never change no matter the number of times you tried it.

The Hash of the previous block

The hash of a previous block is added to a new block to link them together. It is a chain of information; the new is connected to the old.

For instance, the hash of Block 2 is added to block 3 to link them together: Blockchain. Block 2 contains the hash of block 1(the fingerprint of block 1, its own data, and its own hash); block 3 contains the hash of block 2, its own data, and its own hash.

A tiny change or a tamper to the data in block 2 will change the hash of Block 2 and also reflect in block 3 and above. Everyone on the network sees this and the request to add the block to the network will be rejected.

When a block is added to a blockchain, it is called mining. BTC, for instance, uses the Proof of Work concept. This is where the computing power comes in. To be able to add a block to a network, everyone works hard at solving a high-level, time-consuming task. The first to solve it adds the block to the network. Bitcoin is issued to reward the person. This is how the bitcoin in circulation is mined. The process of mining is carried out with power-consuming, supercomputers.

Has this post helped you understand blockchain better? Let me know in the comment section.

Read my next post where I broke down SHA256 and the Proof of Work connection.