What is “blockchain” ?
Despite its appearance, blockchain is actually extremely simple in concept. Databases come in many forms, one of which is blockchain. To comprehend blockchain, one must first grasp the concept of a database.
A database is a collection of digitally stored data on a computer system that can be accessed electronically. To make it easier to find specific information, database information is often organized in table style. Instead of a database, what’s the difference between using a spreadsheet?
One or a small number of people can use spreadsheets to store and access minimal amounts of data. A database, on the other hand, is built to accommodate far bigger volumes of data and to allow for easy access, filtering, and manipulation by a large number of people at the same time.
Large databases are created by storing data on powerful computers called servers. In order to provide enough computational and storage capacity for a large number of users to simultaneously access a database, these servers can occasionally be built employing hundreds or thousands of computer systems. While a spreadsheet or database can be accessed by anybody, it is usually owned by a business and maintained by a designated individual who has complete control over how it works and the data it contains.
A blockchain, on the other hand, differs from a database in several ways.
Structure for Keeping Things
The way in which data is structured differs greatly between a traditional database and a blockchain. A blockchain is a decentralized database that stores data in sets called blocks. The “blockchain” is a chain of data made up of blocks with varying storage capacities that are linked together when one is full. With each subsequent addition, all the newly gathered data is collected into a new block, which will be added to the chain when it is complete.
Unlike a database, which organizes its data into tables, a blockchain organizes its data into contiguous chunks (blocks). The result is that while every blockchain is also a database, this isn’t true for every database. When implemented in a decentralized manner, this method also creates an irreversible chronology of data. As soon as a block is full, it becomes a permanent fixture in the timeline. When a new block is added to the chain, it is assigned a unique timestamp.
Decentralization
Understanding blockchain is easier if you look at it from the perspective of how Bitcoin uses it. The blockchain of Bitcoin, like that of a database, is stored on a network of computers. This blockchain is nothing more than a special kind of database for Bitcoin, which records every single transaction ever conducted with the digital currency. While most databases have a number of servers located under one roof, the servers in the Bitcoin network are all operated by a single person or group of people, as opposed to most databases.
Consider a scenario in which a business owns a server with 10,000 machines and a database containing all of the account information for its clients. This business owns a warehouse where all of these computers are housed under one roof, and it has complete access to all of the data on each of those systems. In the same way, Bitcoin has thousands of computers, but each computer or group of computers that holds its blockchain is located in a different geographical area and is administered by different individuals or groups of individuals. Nodes are the machines that comprise the Bitcoin network.
In this strategy, the decentralized blockchain of Bitcoin is utilized. It is possible to have a centralized private blockchain that is owned and administered by a single entity, but this is rare.
The data that has been saved on a blockchain since its start is available to every node. The data is all of the Bitcoin transactions in the past. If a node’s data has an error, the hundreds of other nodes can be used as a point of reference to help fix it. This ensures that no single node in the network may alter the data it contains. As a result, the history of transactions in each block of the Bitcoin blockchain cannot be reversed once it has been recorded.
All nodes will cross-reference each other and readily identify the node that has inaccurate information if a single user tampers with the Bitcoin ledger. This technique aids in the creation of a chronological timeline that is both precise and comprehensible. Blockchains can store many more types of data in addition to transactions, such as legal contracts, state identifications, or goods inventories.
A majority of the decentralized network’s processing power must agree on changes before the system’s operation or the information stored there may be altered. As a result, any adjustments made will benefit the vast majority of people.
Transparency
Bitcoin’s blockchain is decentralized, which means that anybody may witness all transactions in real time by running a personal node or by using blockchain explorers. As new blocks are confirmed and added, a copy of the chain is stored on each node. As a result, if you wanted to, you could keep tabs on the whereabouts of Bitcoin.
In the past, exchanges have been hacked, resulting in the loss of all Bitcoins held by users. Even if the hacker is completely anonymous, the Bitcoins they stole can still be tracked. Those who have been hacked would know if any of their Bitcoins have been moved or spent.
