bsv logo

©2019 by 22nd Century Crypto. Proudly created to support you.

What is a blockchain? ep. 5

Before I even start to explain what a blockchain is, lets get some things clear first.

  • Blockchain is not the actual crypto asset.

  • Blockchain exist because OF bitcoin and bitcoin because of the blockchain.

  • The two are not inseparable but they can serve very different purposes.

  • Blockchain is not some program language or anything to do with coding in general. It is the outcome of the bitcoin protocol.

So now that we have that out of the way you should be well versed in what the blockchain is, now go out and educate other.

Oh, you want more. Fine. So what exactly is the blockchain then? If you can visualize a series of interconnected block that are increasingly growing and depended on each other then you have a general grasp.

Quick video:

So a blockchain is the name given to a sequence of blocks (groups of transactions) that are linked together. These blocks are then distributed to all the users on the network. If you were to download the Bitcoin Core , software that allows you to sync with the blockchain, you would immediately begin downloading the entire blockchain from the very first transaction back in 2009. Depending on your computer this can take hours or days and it is only getting bigger. Ah, but thats what makes it so cool. !0 years of every move every bitcoin has made, linked and now sitting on your computer. That's cool and one of many things that makes this technology so great.

Basically it is an "immutable record of transactions (LEDGER) that does not require to you to rely on an external authority" to validate the data. This makes it "trustless".

The thing about the blockchain is that it can contain virtually any type of data. Yes you will mostly hear about it being associated with financial transaction, but like I have said in previous posts, that is on a small part of what this thing can do.

Here is a great article on some of the uses for a bitcoin blockchain:

Seems simple right? So how does this whole thing work?

The blockchain comes from the distribution of computers on the network, this provides the security of bitcoin. There are 5 concepts of blockchain technology:

  1. Cryptographic Hash

  2. Immutable Ledger

  3. P2P Network

  4. Consensus Protocol

  5. Block Validation or ‘Mining’

I know, things are getting a little more complex, bare with me as I try to make it easy to grasp. Lets define those features.CRYPTOGRAPHIC HASH- is a hash function which takes an input (or 'message') and returns a fixed-size string of bytes. The string is called the 'hash value', 'message digest', 'digital fingerprint', 'digest' or 'checksum'.

The ideal hash function has three main properties:

  1. It is extremely easy to calculate a hash for any given data.

  2. It is extremely computationally difficult to calculate an alphanumeric text that has a given hash.

  3. It is extremely unlikely that two slightly different messages will have the same hash.

Hashing as been around forever and this has led to many different algorithms that create different types of hash outputs.

The blockchain uses the hash function to make a unique ID for a given block. Also every block includes the Hash of the previous block, more or less. Basically it will include a segment of the previous has so the two are linked, this is why it's so secure. You can not insert your own Hash into the string because it will not be recognized and in return gets kicked out of the system.

IMMUTABLE LEDGER- The term used to refer to blockchains to describe the way in which blocks cannot be changed after they are recorded.  This is related to Hashing, its the outcome of Hashing. Since every block of the chain contains the Hash of the previous one, it is not possible to modify any block without changing the entire chain. I am going to steer clear of the advanced details for now. Hopefully you have a general idea.

PEER-TO-PEER (P2P) NETWORK- The blockchain information is distributed among all of the users. As I mentioned before, when you download Bitcoin Core you will get a copy of the blockchain. Now any new transaction goes through you and everyone else running the program. So the entire network can communicate and verify with each other, consensus. So even if an some attacker were to modify a part of the chain, the network will not accept it. Unless there is a 51% attack, highly unlikely and something you do not need to know right now, just beware of the term. You will see it again.

CONSENSUS PROTOCOL- These protocols create an irrefutable system of agreement between various devices across a distributed network, whilst preventing exploitation of the system. Everyone needs to agree about the validity of the blockchain data before adding more information, blocks. Every time a new block is added, all the "nodes" validate the block. If there is a difference in the chain the nodes will pick the most common one and disregard the other.BLOCK VALIDATION OR ‘MINING’- the most famous area of Blockchain thats is owed to the Bitcoin blockchain.

Mining is the act of meeting the Proof of Work (POW) requirements for adding a new block with pending transactions to the Blockchain. For bitcoin it is solving an extremely hard mathematical problem, these problems gradually get harder as more miners come onto the chain.

This is a warehouse full of miners. Each computer is attempting to solve a very complex problem in order to validate the block and claim the reward.

So, to sum it all up, the Blockchain allows users to create an immutable system for recording any kind of data. There is no need for an external or internal party. Users rely on the technology by following the rules to meet consensus on that protocol and thus ensuring the integrity and security of that data.