Clarke’s First Law: Any sufficiently advanced technology is indistinguishable from magic.
Here is your answer, Blockchain is not Black Magic, and at Blockchains base level, it’s not that complicated. At the base level Blockchain is a new way to keep records. Records are bundled together into blocks and added to the Chain one after another.
- The record, which can be any data set. A recording of transactions, recording of some providence, maybe a history of something that happened on a specific date.
- The block is a bundle of records organized together in a precise way.
- The Chain is all the blocks linked together in a specific way.
It works like this:
Step One, A transaction is recorded. For example, let’s say Dave is selling two of his coins to Bill for $100. The record lists the details, including digital metadata (signature) for Dave and Bill.
Step Two The computers in the network called ‘nodes,’ check the digital metadata of the transaction to make sure it is valid.
Step Three The records that the network accepted are added to a block. Each block contains a unique code called a hash. It also includes the hash of the previous block in the Chain.
Step Four The block is added to the Blockchain. The hash codes connect the blocks in a specific order.
Hash codes keep records safe.
A hash code is created by a math function that takes digital information and generates a string of letters and numbers from it.
No matter what the size of the original file, a hash function will always generate code of the same length. Any change to the original input will generate a new hash. So if someone decided to delete just one comma from Tolstoy’s 587,287-word masterpiece, it would show up, because the hash would change.
This is a Test of an SHA-512 hash, and one hash will end with a period, one will not
The hash is
while for another example
This is a Test of an SHA-512 hash, and one hash will end with a period, one will not.
So in Blockchain, hashes are linked together, so a hacker would find out that the next block in the chain still has the old hash. So to restore the Chain, a hacker would have to recalculate that one, and the next, and so on. Recalculating all those hashes would take an enormous amount of computing power.
So, in Blockchain, any changed hash breaks the Chain and invalidates that copy of the chain, which makes the data in the Chain impossible to change.
Anyone can spend hours and hours, days, and days or months or even years talking, writing, thinking, about how this new record-keeping system works. Similarly, we can spend years talking about how an airplanes engine provides the thrust that affects lift on a wings surface. Thrust provides lift through a wings surface, and that is all we need to know to fly from Phoenix to Chicago.
At Blockchains base level, it’s not that complicated. Blockchain is a new way to keep records. But how it works, is not necessarily what it is.
The advantages of this new kind of record-keeping are:
First, never before has there been record-keeping that is this secure. Security threats in records management come from all directions ranging from malware and data breaches to theft, fire, or flood. Not the case with Blockchain.
Second, never before has there been record-keeping that provides options in terms of visibility. Blockchain record-keeping has options for sharing this data or who can see what. In theory and practice,
anyone can connect their user interface and access data stored on the Blockchain; however, if that data is encrypted, only the key holder can understand what that data says.
A blockchain is a database shared across a network of computers.
The network makes constant checks, to ensure all the copies of the database are the same.
Once a record added to the chain, it is very difficult to change.
Blockchains have been used to underpin cyber-currencies like bitcoin, but many other possible uses are emerging.
Now the real question is, what is your organization going to do with Blockchain?
Michael Noel CBP Certified Blockchain Professional
Is Blockchain Complicated? Is Blockchain Black Magic? was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.