Blockchain is the tech. Bitcoin is merely the first mainstream manifestation of its potential.

—Marc Kenigsberg

Blockchain is the tech that runs Bitcoin, Ethreum, Libra, and many other cryptocurrencies released and to be released out there, so what is blockchain? Let's bring it into focus.

What is Blockchain

Blockchain simply put is a software but to be more specific blockchain is a decentralized database or a set of information or what others may call a digital ledger for keeping track of any kind of data for example the movement of goods but we'll get to its applications later on.

Blockchain is not bitcoin despite their strong connection, bitcoin,ethereum and the rest of the cryptocurrencies are just digital currencies recorded on the blockchain depending on who owns them, when they are sold, and to whom they are sold to. Without blockchain, I don't think the inventor of bitcoin Satoshi Nakamoto would have been able to develop such a valuable cryptocurrency.

How Blockchain works

A Blockchain basically groups information into blocks that can't be altered hence considered immutable. This digital information can include ownership of a piece of the land, car, supply chain records, or anything that someone wants to permanently record.

Each block is linked to the next block by a code that references the contents of both blocks. A hash value is generated for every block created, this value is unique, encrypted and typically made up of letters and numbers.

To create a hash, you enter data, whether it be a photograph, a scan of a painting, a PDF, a Word document, or a financial transaction, into a program called a hash generator. To try this yourself, Google “256 hash generator,” and a generator will appear. Type a few words into the window. For instance, if you type abc (in lowercase), you will get this hash: ba7816bf8f01cfea414140de5dae2223b00361a396177a9cb410ff61f20015

so essentially a block contains a hash of the previous block and the current block, in an event that someone tries to change the data in one of the blocks the hashes linking them together will not be in sync causing an alarm to be signaled. Another cool thing is that a blockchain is replicated to everyone in the network(nodes) hence each person has a copy of the set of data for example if a million people exist in a network and in the remote event that someone tries to change the information in a block, he/she will have to change the other blocks chained to it making it an impossible task to tackle and that's what makes blockchain such a secure system.

Another security layer to mitigate interference of blocks is the Proof of work and Proof of stake concepts. Let's define each one of them.

Proof of work(PoW)

Proof of work is an algorithm used to form a consensus among various nodes(devices) in a network to confirm a transaction and create a new block to the chain upon confirmation. In this transaction, miners compete to solve complex mathematical problems, usually, a lot of computational power, energy and only increases as more miners join the network. Once a problem has been solved the block is added to the chain and the miner is rewarded in form of digital coins for example bitcoin.

To achieve security and consensus proof of work makes it extremely difficult to alter any aspect of the blockchain since such an alteration would require re-mining all subsequent blocks.

Proof of Stake(PoS)

Proof of Stake is a concept where a person can validate or mine a block transaction depending on how many coins they hold. The more coins owned by a miner the more mining power they have. Altcoins uses this concept to validate its transactions. Since you have to hold a large number of coins to be able to gain a significant amount of mining power it is seen as less risky in terms of the potential of a miner to attack the network as it structures compensation in a way that makes an attack less advantageous for the miner since you have to hold a lot of coins to able to get enough power to compromise a whole network.

What Blockchain offers

Blockchain offers a decentralized database that is unlike the normal databases that updates data and deletes the previous one, it maintains data of all the information recorded before and they're all immutable unlike a centralized system, the blockchain database is distributed all over the nodes in the network making it hard to change anything in it considering this will cause a mismatch in all the other node's databases enhancing trust, robustness, security and transparency.

Conclusion

This is just a basic overview of what blockchain is and how it works, you can go dipper to its applications and get to learn how disruptive this technology is becoming with things like smart contracts, how start-up tech companies are taking advantage of it to build robust systems that help with supply chain, crowdfunding especially with the ethereum blockchain, its application in the healthcare industry, banking, fintech among other sectors. Take your time to learn more and more and never stop learning.

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