What Is Blockchain
Blockchain is the combination of the words “Block” and “Chain” it is primarily a storage of Chunks, bits or Blocks of Information that are joined together to form a Compilation of Blocks or Blockchain.
Blockchain was created, so that people can save their money, without the fear of losing their investments to Hackers, Thieves or being robbed as they made their way out of the bank after a Withdrawal.
Some people have been wondering what really makes CryptoCurrency special and different from the others. I dare say that Blockchain is the Backbone of CryptoCurrency.
Information is power, but a lot of people don’t understand the Technology behind Crypto currency.
They’re only in the game for the pumps and dumps and that’s all there is to it for them.
Not to waste too much of your time. What Is Blockchain? How does Blockchain Operate? These are questions people ask. But before I provide the Answers, let’s first go back to the question and understand The history of Blockchain Technology.
History of Blockchain
David Chaum a Cryptographer first proposed a blockchain protocol in his 1982 Research paper “Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups”
The research was carried on further in 1991 by Stuart Haber and W. Scott Stornetta. They wanted to bring about a System where Document Timestamps could not be tampered with and were Irreversible.
This were the original Idealists behind Blockchain Technology, until Satoshi Nakamoto ( The Pseudonymous Creator of Bitcoin) adopted it for Bitcoin.
What is Blockchain
Blockchain is a Computer system and database, that keeps records of Transactions, between the Sender and the Receiver and stores the Transaction details. It is created in a way that doesn’t allow a 3rd party Interference and all parties involved have control collectively.
Blockchain assembles tiny bits (Blocks) of Information, joins(Chain) them together to Form a Blockchain in a system that secures the Information from 3rd party Interference. The decentralised database managed by multiple participants is known as Distributed Ledger Technology (DLT).
Blockchain was created so as to make the Information stored Irreversible, Immutable and Unchangeable. As each transaction is carried out, the Information about the Last transaction is added to the previous ones or The Genesis (first) Block to form the Blockchain.
If someone were to attempt to Tamper with the Information on a Blockchain. He would have to change every Information on the Block. This means that as each Block is added to the Chain, it becomes more difficult to Tamper with the Information on the Blockchain.
What Really Makes Blockchain Technology Important
Blockchain Uses an Algorithm method called Cryptography, which allows only the sender and the Intended Receiver of the Information to read it. Cryptography uses a line of codes that prevents 3rd parties or Intruders from accessing the Information.
For example someone uses J3-16 w6 to replace the word “World” only the Intended reader will understand that the sender is saying world from the Bible as the both of them have agreed based on the fact that J stands for John, 3 stands for Chapter 3, -16 stands for verse 16 and w6 stands for the 6th word of that verse. ( Note that this Illustration is just an explanation of what Cryptography offers. It is not Factual at all)
There have been Incidents where banks closed due to bankruptcy, and a lot of people couldn’t access their money and lost their investments.
In other instances, Investment companies that offered people huge interests on their Savings and Investments. Absconded with everyone’s Funds as the System failed and a lot of people lost their investments.
Blockchain offers you Privacy and Security: There are people who lost their Life Savings and Investments, due to their inability to come forward with concrete Evidence, that the money in their Bank Accounts belong to them, and they didn’t make it through Illegal means.
Others were locked up behind bars for Financial crimes they did or didn’t commit and lost their Investments in the process.
Blockchain offers you the opportunity to Hold your assets away from the Supervision of Government and Financial Regulation agencies, without the fear of losing your Money to Armed Robbers or Investment Institutions who would run away with your Money and other Men of the Underworld.
Also Read: What Is CryptoCurrency And How Does It Work
Types of Blockchains
- Public Blockchains
Bitcoin which is the First CryptoCurrency adopted this Type of Blockchain Technology.
Public Blockchains are Decentralized in nature. They’re open networks that allow anyone connected to the internet to access them and Verify Transactions (Mining) while earning rewards in the process.
Public Blockchains use the Proof of Work (PoW) and Proof of Stake (PoS) mechanisms. Anyone can access public Blockchains, and even propose modifications that will improve the smooth running of the Blockchain. Which will then happen once all parties reach an agreement. Although Informations that have been Published on the Ledger can not be Altered or Changed.
Ethereum Blockchain is another Example of Public Blockchains.
Private Blockchains
2. Private Blockchains
Like the name implies, Private Blockchains or Permissioned Blockchains are not open to the public and sometimes they operate within a restricted area. An example of Private Blockchains are Ripple ( XRP) or Hyperledger.
Anyone who wants to access them needs to ask for permission from the Administrators or authorities that control it.
Think of Private Blockchains as Facebook. Anyone on the Internet can’t just login to Facebook without the permission of the owners of Facebook, The person has to seek their permission by opening a Facebook account of which If they approve he becomes a Facebook user.
3. Hybrid Blockchains
Hybrid Blockchains are a combination of features of Public and Private Blockchains, they’re used when the Organizations want to decide on which Information a certain amount of people see and which ones are open to the public.
Transaction Information and other records are Private but can be accessed by verifying through Smart Contracts.
Users gain full access to the blockchain when they join, Each user’s identity is protected from other users but revealed when they engage in a transaction with other users. To the Users they have Transacted with.
Sidechains
4. Sidechains
Sidechains are Blockchains that run on another Blockchain, They make it easy to use Tokens on another Blockchain apart from their native Blockchain.
This mechanism allows Interchangeability of Tokens between the Parent Blockchain and the Sidechain, for a smooth, more scalable and efficient operation.
The Liquid Network and Alpha are examples of Sidechains.
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