Table of contents
What is Blockchain?
Blockchain Technology is a software we use to transfer unique instances of values (money, property, contracts etc.) securely via the internet without requiring a third-party intermediary such as a bank or government.
At the most basic level, blockchain technology is composed of cryptographic algorithms.
Satoshi Nakamoto created the blockchain and implemented in the bitcoin cryptocurrency.
Concepts in Blockchain technology :-
1. Cryptography :-
- Cryptography is the method of securing important data from unauthorized access.
- We can break down the word cryptography into two parts; Crypto meaning “hidden” and Graphy meaning “writing”. Therefore, cryptography is a method of converting plaintext into unreadable coded text.
- Two main concepts behind cryptography are Encryption and Decryption.
- Encryption :- In the Encryption process we generate or convert plaintext into unreadable coded text (ciphertext). We use key to encrypt the data.
- Decryption :- Decryption is opposite to encryption. we convert ciphertext to plaintext. We use key(same or different from encryption key) to decrypt the data.
There are two main types of cryptography :-
- Symmetric key cryptography : Use same key for encryption as well as decryption.
- Asymmetric key cryptography : Use two different keys one for encryption and another for decryption.
For more on cryptography you can refer [data-flair.training/blogs/blockchain-crypto..
2. Hash Functions :-
- Hash function is a mathematical function which takes data and converts it into random fixed length arbitrary value.
- In order to be considered secure, a hash function needs to be collision-resistant, this means that it’s extremely difficult (to the point of being nearly impossible) to find two inputs that create the same hash output.
Accomplishing this requires a few different features :
- No weaknesses in the hash function.
- A large number of possible outputs.
- A one-way hash function (can’t derive the input from the output).
- Similar inputs produce very different outputs.
Examples of hash function :-
- SHA-256 (used in Bitcoin)
- Keccak-256 (used in Ethereum)
If a hash function meets these requirements, it can be used in blockchain. However, if any of these requirements are violated, then the security of the blockchain is at risk. (I will cover everything how its implemented in blockchain in upcoming blogs)
3. Blocks :-
- The purpose of the blockchain is to act as a distributed ledger that stores data in a secure fashion. The blocks are the place where this data is stored.
4. Ledger :-
- A ledger is like a database, a Google or Excel spreadsheet. It records all the transaction.
- Ledgers may contain detailed transaction information for one account, one type of transaction, or in the case of a general ledger summarized information for all of a company's financial transactions over a period.
Thank you for reading this blog it means a lot. I hope you understand some terms that used to create blockchain. In upcoming blogs I will share some more concepts and working of blockchain. In this series of Blockchain next blog will be published on 6th September 2022.
Feel free to comment your thoughts and what next things you want me to include. :)