BLOCK- CHAIN TECHNOLOGY
What is Blockchain?
- A blockchain is a database that stores and links encrypted data blocks in order to create a chronological single-source-of-truth for the data.
- Instead of being duplicated or transferred, digital assets are dispersed, resulting in an immutable record of the asset. The asset is decentralised, enabling complete real-time access and transparency to the public.
- The document’s integrity is preserved thanks to a visible record of alterations, which increases trust in the asset.
- The inherent security features of blockchain, as well as its public ledger, make it an ideal solution for practically any industry.
How Does Blockchain Work?
- The main purpose of a blockchain is to allow individuals — particularly those who don’t trust one another — to share sensitive information in a secure, tamper-proof way.
-MIT Technology Review
- The three major concepts of blockchain are blocks, nodes, and miners.
BLOCKS:
A chain’s blocks are made up of three fundamental elements:
- The data of the block.
- A 32-bit whole number is referred to as a “nonce.” When a block is created, a random nonce and a block header hash are produced.
- The nonce is related with the hash, which is a 256-bit integer. It’s got to start with a lot of zeros (i.e., be extremely small).
- When the initial block of a chain is produced, a nonce produces the cryptographic hash.
MINERS:
- Miners use a method called mining to add new blocks to the chain of events.
- Each block in a blockchain has its own nonce and hash, but it also references to the hash of the previous block, making block mining challenging, especially on large chains.
- The difficult mathematics challenge of creating a valid hash with a nonce is solved by miners using specialised software.
- Because the nonce is only 32 bits long and the hash is 256 bits long, there are around four billion nonce-hash combinations to mine before you get the right one.
- When this happens, miners are said to have found the “golden nonce,” and their block is added to the chain.
NODES:
- One of the most basic features of blockchain technology is node decentralisation.
- A single machine or entity cannot own the entire chain. The nodes that link to the chain instead establish a distributed ledger.
- A “node” is a piece of computer hardware that saves copies of the blockchain and keeps the network operating.
- Each node has a copy of the blockchain, and in order for the chain to be updated, trusted, and confirmed, the network must algorithmically approve each newly mined block.
- Due to the transparency of blockchains, any transaction on the ledger can be easily scrutinised and analysed. Each member is assigned a one-of-a-kind alphanumeric identification number, which is used to keep track of their transactions.
USES:
The Rise of Blockchain Technology Begins with Cryptocurrencies:
- Cryptocurrency is the most well-known (and maybe most disputed) use of blockchain. Bitcoin, Ethereum, and Litecoin are examples of digital currencies (or tokens) that may be used to buy goods and services. Crypto, which functions similarly to a digital form of cash, may be used to buy everything from lunch to a new home. Unlike currency, crypto relies on blockchain to operate as a public ledger as well as a better cryptographic security system, guaranteeing that all online transactions are recorded and safeguarded.
- There are around 6,700 cryptocurrencies in circulation now, with a total market valuation of nearly $1.6 trillion, with Bitcoin accounting for the vast majority of this value. These tokens have increased in prominence over the last few years, with one Bitcoin being worth $60,000. Here are a few of the main reasons why cryptocurrencies are gaining popularity so quickly:
- The security of blockchain makes theft far more difficult because each cryptocurrency has its own unique identifying number that is tied to one owner.
- Personal currencies and central banks are no longer required with crypto. Without the need for currency conversion or central bank involvement, crypto may be sent to anybody, anywhere on the planet, via blockchain.
BLOCKCHAIN’S EARLY YEARS
Despite being a relatively young technology, blockchain has a long and fascinating history. The timeline below summarises some of the most significant and well-known events in the development of blockchain technology.
2008
“Bitcoin: A Peer-to-Peer Electronic Cash System” is published in 2008 by Satoshi Nakamoto, a pseudonym for a person or organisation.
2009
Between computer scientist Hal Finney and the enigmatic Satoshi Nakamoto, the first successful Bitcoin (BTC) transaction takes place.
2010
- Laszlo Hanycez, a programmer from Florida, buys two Papa John’s pizzas with Bitcoin for the first time.
- Hanycez put down 10,000 BTC, which is currently worth around $60. Its current market value is $80 million dollars.
- The market capitalization of Bitcoin has surpassed $1 million.
2011
- In 2011, one bitcoin was worth one dollar, achieving cryptocurrency parity with the US dollar.
- Bitcoin is now accepted as a means of payment by the Electronic Frontier Foundation, Wikileaks, and other organisations.
2012
- Blockchain and cryptocurrency have been discussed on The Good Wife, for example, bringing blockchain into mainstream culture.
- Bitcoin Magazine was founded by Vitalik Buterin, an early Bitcoin developer.
2013
- In 2013, the market capitalization of BTC surpassed $1 billion. Bitcoin reached a price of $100 per BTC for the first time.
- Buterin publishes “Ethereum Project,” a document that argues blockchain technology might be utilised for purposes other than Bitcoin (e.g., smart contracts).
2014
- In 2014, Zynga, The D Las Vegas Hotel, and Overstock.com all started accepting Bitcoin as a form of payment.
- Buterin’s Ethereum project was funded by a crowd sale, which raised more than $18 million in Bitcoin and opened up new blockchain possibilities.
- R3, a collaboration of over 200 blockchain companies, was formed to identify new ways to apply blockchain technology.
- PayPal has announced that Bitcoin will be accepted.
2015
- The number of Bitcoin-accepting merchants has topped 100,000.
- The NASDAQ and Chain, a San Francisco-based blockchain firm, have partnered together to investigate the technology for trading private company shares.
2016
- For cloud-based enterprise applications, IBM has unveiled a blockchain approach.
- The legitimacy of blockchain and cryptocurrencies has been recognised by the Japanese government.
2017
- Bitcoin has surpassed $1,000/BTC for the first time.
- Cryptocurrencies now have a market capitalisation of more than $150 billion.
- JP Morgan CEO Jamie Dimon has stated that he believes in blockchain as a future technology, indicating that Wall Street believes in the ledger system.
- At $19,783.21/BTC, Bitcoin sets an all-time high.
- Dubai has said that by 2020, its administration would be blockchain-based.
2018
- Facebook has stated that it will form a blockchain group and has hinted at the prospect of developing its own coin.
- Large banks including Citi and Barclays have signed on to IBM’s blockchain-based banking infrastructure.
2019
- China’s President Ji Xinping has openly backed blockchain, and the country’s central bank has stated that it is working on its own cryptocurrency.
- According to Twitter and Square CEO Jack Dorsey, Square will hire blockchain experts to work on the company’s future crypto plans.
- Bakkt, a digital wallet and cryptocurrency trading platform, has been launched by the New York Stock Exchange (NYSE).
2020
- Bitcoin will almost hit $30,000 in value by the end of 2020.
- Users will be able to buy, sell, and hold bitcoins through PayPal, according to the company.
- The Bahamas has become the world’s first government to issue its own digital money, dubbed the “Sand Dollar.”
- Blockchain plays a key role in the fight against COVID-19, primarily for securely storing data.
– By: Harsh Preet Kaur
Tag:Blockchain