Basic of Blockchain {WEB3.0}

What happens when there is inside corruption? There are many black money transactions, and all these transactions must be stored in some database somewhere. But why don’t we consider the database reliable? The first reason is that we don’t have access to that database. The admin of the database can go and change the data anytime, so it’s not reliable. That’s why if we bring a system that is decentralized, meaning no single person has authority over it, and it is shared with everyone, it becomes almost impossible to change or modify it. Such a system or database is called blockchain. Blockchain research started in 1919, but it was actually implemented in 2009 by a developer named Satoshi Nakamoto with the creation of Bitcoin using blockchain. Since then, the boom of cryptocurrency has been spreading in the world.

To explain it in simple terms, it’s like a shop where there are many records of which item came, which item went, from whom it came, and where it went. This entire record book is like a ledger. Each record is a single block, and the blockchain is a chain of these blocks.

In a single block, some information or data is stored inside this block. The first thing stored inside the block is transaction information, like for Bitcoin, it stores who sent how much Bitcoin to whom. Different data is stored for different uses.

The second thing stored inside the block is a hash. We can understand this as a unique code, like how we get an Aadhaar number after providing our biometrics. Similarly, a unique code is generated based on the data stored inside the block.

The third piece of information stored in the block is the hash of the previous block. This means the previous block’s hash is saved in the next block, and so on, creating a chain of blocks. The first block in this chain is called the genesis block

In a blockchain, the “chain” refers to the way blocks are linked together.

WHAT WILL HAPPEN WHEN WE TRY TO CHANGE DATA IN A BLOCKCHAIN

As soon as we change its data, it will be altered. Changing it means that the next block will also have invalid information, which means incorrect data. The block after that will also have incorrect data. So, wherever there is a change in the chain, all the subsequent data will become invalid. It will be incorrect.

Now, if we say we will change everything, it will take so much time that we can’t even imagine. This is where the concept of time and computational power comes into play

In a blockchain network, every participant has a copy of the entire blockchain. This means you can’t just change the data in one copy. To make a change, you would need to share the altered block with everyone in the network. Then, a vote would take place to determine if the change is valid. If the majority votes that the change is not valid, your altered chain will be rejected, and you won’t be able to make the change. This voting system is known as the consensus mechanism

If you want to add new data or a new block to the blockchain, you first create it, which takes about 10 minutes. Then, you share it with the entire network. Only when the majority agrees that the new change is valid will it be added to the blockchain.

So, to hack a blockchain, you would need a lot of time to make changes and control more than 50% of the network to achieve a majority vote. This is why blockchain is used in many domains today due to its security and reliability.

USE OF CRYPTOCURRENCY IN BANK TRANSACTION: -

Cryptocurrency (Bitcoin)and other cryptocurrencies have eliminated the need for traditional banking intermediaries. Previously, if you wanted to send money from India to another country, you had to go through a bank. The bank would convert your rupees to dollars and then send it. This process took time and incurred fees.

Cryptocurrency has simplified and sped up this process. Now, you can directly send cryptocurrency from your wallet to another person’s wallet without any bank or intermediary. This process is not only faster but also incurring lower fees. This is why the popularity and value of cryptocurrency (Bitcoin) have increased.