Blockchain In 7 Minutes What Is Blockchain Blockchain Explained How Blockchain Works By Abdul Raheem Tech
Blockchain In 7 Minutes What Is Blockchain Blockchain Explained
Ever wonder if
there's an easier way to complete transactions without having to deal with online wallets banks and third-party applications well it's possible thanks to
blockchain here's everything you need to know about blockchain imagine four
friends Jack Ted Sam and Phil meet up for dinner after they're done Jack pays
the bill and all of them decide to split the expense amongst each other now on
the next day when Phil sends his chair to Jack via online money transfer the
transaction goes through without a hitch then Ted and Sam's and their
respective shares to Jack but their transactions don't go through the failed
transaction sites some issues at the bank that's when Jack comes to know about
the many ways a bank transaction could fail it could be due to technical issues
at the bank one of their accounts were hacked daily transfer limits being exceeded
in sometimes additional charges like transfer charges associated with transferring
money to solve these problems the concept of cryptocurrency came into existence
cryptocurrencies are a form of digital or virtual currency that run on a
technology known as blockchain thanks to blockchain crypto currencies are
immune to counterfeiting don't require a central authority and are protected by
strong and complex encryption algorithms and in a market of more than thousands
of crypto currencies like litecoin aetherium c cache and so on one reigned
supreme bitcoin now let's go back to our previous example and have filled Ted
and Sam Sann Jack to bitcoins each as their contribution to the previous
night's dinner let's assume fill Ted and Sam have three bitcoins in reserve
while Jack has five first phil simms two bitcoins to jack a record is created
in the form of a block the transaction details between them is permanently
inscribed in this block this record also holds the number of bitcoins each of
the friendzone so after Phil's transaction jack has seven bitcoins while phil
has one following this Sam and Ted's and two bitcoins to Jack a new block is
created for each of these transactions these blocks hold the transaction details
as well as how many bitcoins Sam Ted and Jack have in reserve these blocks are
linked to each other as each of them takes reference from the previous one for
the number of bitcoins each brand owns this chain of Records or blocks is
called a ledger and this ledger is shared among all the friends which acts as a
public distributed ledger this forms the basis of blockchain so what happens
when phil has only one Bitcoin left and he tries to send two more bitcoins to
Jack the transaction will not go through this is because all his friends have
copies of the ledger and it's clear that phil has only one Bitcoin left his
friends will flag this transaction as invalid a hacker will not be able to
alter the data in the blockchain because each user has a copy of the ledger the
data within the blocks are encrypted by complex algorithms all of this is made
possible with the help of blockchain technology blockchain can be described as
a collection of records linked with each other strongly resistant to alteration
and protected using cryptography now let's have a closer look at the Bitcoin transaction
between Jack and phil and find out how it works every user in the Bitcoin
network has two keys a public key and a private key the public key is an
address that everyone in the network knows of like an email address of a user the
private key is a unique address that only the user has knowledge of something like
a password first bill passes the number of bitcoins he wants to send to Jack
along with his and Jack's unique wallet address through a hashing algorithm all
of this is part of the transaction details these details are encrypted using
encryption algorithms and using fills unique private key this is done to
digitally sign the transaction and to indicate that the transactions came from
Phil this output is now transmitted across the world using Jack's public key
with this the message or transaction can be decrypted only by Jack's private
key which only jack has knowledge of different crypto currencies use different
hashing algorithms while Bitcoin use is the sha-256 algorithm etherium which is
also a famous cryptocurrency uses one known as ether this transaction and several
other similar ones are taking place all around the world these transactions are
validated and then added block by block the people who validate these blocks
are called miners for a block to be validated and added to a blockchain miners
need to solve a complex mathematical problem the miner who solves this first adds
the block to the blockchain and is rewarded with 12.5 bitcoins the process of
solving the complex mathematical problem is called proof of work and the
process of adding a block to the blockchain is called mining with this Phil and
Jax wallets are updated just like every person in the network who has completed
a transaction now that you know about blockchain and it's important concepts time
for a small quiz what is the concept of blockchain that ensures data cannot be
altered by any of the users within the network a public distributed ledger be
proof of work see proof of stake D hash encryption let us know what you think
is the right answer in the comments below three lucky winners will get Amazon
gift vouchers details are mentioned in the description below let's have a look
at how Walmart uses blockchain to provide its customers with better service
Walmart was facing problems in delivering quality products to its customers
they were facing a high return rate and large amounts of refunds due to their
products bad quality they were unable to determine the point of failure in the
supply chain which started from farm to storage to transportation to processing
all the way to the customer then Walmart adopted blockchain technology with
blockchain the quality of the goods at each step was permanently inscribed
within a block for example when a customer Flags a product has damaged it can
be correctly identified where the product got damaged in the entire supply
chain thus helping Walmart to identify the problem areas and fixing them this
is just one of several ways blockchain is used in real-life applications can
you think of any others let us know in the comments down below that's all for
now thank you for reading and stay tuned for more you
Thank You So Much For Visiting My Blog Abdul Raheem Tech !
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