Blockchain

by TrendBitcoin , October 23, 2018

What is the blockchain technology?

Explained in a simple and concise way the BlockChain or Block Chain is a record of facts, something like a ledger, which is reproduced through several computers, connected peer to peer to a network. The facts can be from monetary transactions to contract signatures. The members of the network are anonymous individuals which are called nodes. The communications that happen in the network are secured with cryptographies so that the sender and receiver can be identified in a secure way. When a node wants to add a fact to the book or record, a consensus is formed in the network to determine where the fact should appear in the record, this consensus is called block.

How do you ask for the facts?

Decentralized peer-to-peer networks are nothing new. Napster and BitTorrent are examples of P2P networks. The difference is that instead of exchanging movies, members of the blockchain network exchange facts.

P2P networks, like other distributed systems, must solve a complex problem related to computer systems: conflict resolution or reconciliation. Relational databases offer referential integrity but the same does not exist in distributed systems. If two incompatible facts arrive at the same time, the system must have rules to determine which of the facts is considered valid.

Take for example the problem of double spending: Ana has $ 10, and she sends $ 10 twice to Peter and John. Who will get the $ 10 eventually? To answer this question, the best way is to order the facts. If two incompatible facts reach the network, the first one to be registered is the one that will win.

In a P2P network, two events sent at almost the same time can arrive in orders at distant nodes. How then does the network agree on the first fact? To guarantee integrity over P2P networks, a mechanism is needed to make everyone agree on the order of events. A consensus system is necessary.

Consensus algorithms for distributed systems is a very active field of research. Surely you have heard about Paxos or Raft Algorithms. The blockchain implements another algorithm, the consensus test work, using the blocks.

The easiest way to understand BlockChain is to look at it from different perspectives:

What it does: A BlockChain or a Block chain allows data to be processed and/or shared among various parties over a network of unreliable parties. The Data may consist of anything, but the most interesting uses have to do with the information that currently requires a third party to guarantee the exchange. Examples are Money (Requires a bank), proof of ownership (requires a lawyer), a loan certificate, etc. In conclusion, the blockchain removes the need to have a third party as a guarantee.

How does it work from the technical aspect?

The Blockchain is an innovation that is based on 3 concepts: peer-to-peer networks, public-key cryptography, and a distributed consensus based on the resolution of random mathematical problems. None of these three concepts is new. It is the combination of the same that allows a novel system. Not everyone has the ability to create a blockchain system, very few people in the world, but the fact that it is a complex system does not prevent us from being able to use it.