Blockchain technology in general
The protocol (the rules) of a specific chain
The cryptocurrency that is running on the chain (if any)
When it comes to blockchain and what it allows the user to do, the technology can be viewed from many perspectives depending on the context, but here we will focus on two specific approaches. On the one hand, we will see the chain as a way to store information and, on the other, as a language or protocol to transfer value.
Blockchain is a type of data structure
To a computer engineer, a blockchain is fundamentally a data structure. The fabric reliably stores information even when in an unsecured digital environment. The concept of a data structure may sound technical, but it sounds exactly like what it is, an information structure. For reference, consider that lists and tables are a type of data structure.
There are many types of data structures in the digital world, one of them is the blockchain. This nomenclature comes from the way a string structures its information; So he takes it and separates it into blocks. Each block contains information about the block before it, thus creating a chain. The declaration of which block precedes which is called a reference.
The database: efficient but centralized
A database is a very efficient data structure; they are an excellent way to store a large amount of information, but they are operated by a central entity. The bank, social networks or online stores are examples of databases that store user information.
The central entity decides who can access the database to add or delete information. The user can edit their own network profile and their friends can see that information, but if the user’s content violates the terms of the agreement, other users can report it for removal. Blockchain development company It is the central entity, however, that ultimately decides what content remains on its platform. This can be good or bad in the case of social networks, but it is very dangerous if the data structure in question saves the money of a group of users.
The blockchain: not as efficient, but decentralized
There are several entities, or peers, that operate a chain of blocks. The peers do not know or trust each other, giving them the name trustless peers. The good thing is that, in this case, having confidence is unnecessary. Many peers keep a copy of the information, but none can change or censor it. The participants (or nodes) communicate constantly to stay updated on any new events. In a blockchain, events are usually transactions.
In the chain there is no central entity, such as a bank or clearing house, responsible for capturing and processing new transactions. Thanks to this, anyone who follows the rules of the protocol can create a wallet and make transactions with cryptocurrencies without having to register to use the service. The transaction is broadcast to the network, and each participant (node or peer) then keeps a copy of the transaction. Behind a node there can be a person, a store that accepts crypto or a bank. There is no difference. The number of copies kept on the chain makes it slower, but more copies make the database more secure.
Where does the term blockchain come from?
The blockchain does not keep the information in a single ledger, but separates it into blocks. Each block connects to each other like the pages of a book. This is how the term blockchain (literally, a chain of blocks) came about. The chain operates like a ledger that records entries on sheets. Every few minutes, a sheet is filled and moved to the next sheet in the book. In the header of this new sheet write something like “Last sheet was X; this is sheet Y.” These references link the sheets together. If the sheets get out of order, they can be easily rearranged thanks to their references.
Each leaf in the book represents a block in the chain, so the number of blocks used forms the body of the chain. References link blocks to each other. Instead of having a single bookkeeper in charge of the book, there are many users working on it simultaneously. In the case of a blockchain, it is the miners who act as accountants, and their role will be explained in detail in later sections.
The blockchain is simply a way of storing information, just like lists and tables. Public chains have useful security features that were not possible before. Thanks to them, it is impossible to modify the information registered in the chain once it has been written. For this reason, they are the ideal means to support a cryptocurrency system.
Another way to understand the blockchain is as a protocol for transferring value , just as the internet is a protocol for transferring information. This aspect of the blockchain will be discussed in the next article. Blockchain Development services