Blockchain is a medium for secure and private transactions. There is no central body monitoring all the transaction history. In other words, it's a decentralized method of doing transactions that are used by big companies/individuals. Sounds confusing let me simplify it for you.
Blockchain Architecture
A group of nodes/computers are connected together in a network. There is no central controlling body. Every node in the network has the right to do transactions and make changes in the block until all changes are accepted by every node in this distributed system. This decentralized network is also known as the ‘P2P’ network (peer to peer) is not dependent on any central server. So in a client-server model if the server crashes the clients cant access the server and the model is destroyed. But in a decentralized network, every node has a copy of the ledger, so even if a node is removed from its network there is no harm.
Blockchain in working
A transaction is done from person A to person B
A block containing the transaction is created
This block is sent to all nodes in the network
All nodes are required to validate the block
Nodes receive cryptocurrency(eg:bitcoins) after validating the blocks
After consensus of all nodes, the block is added to the blockchain and can never be changed at any point of time in the future (its immutable)
Your transaction has been processed(as long as it was genuine) and the amount has reached person B !
Block validation
The number of nodes that validate a transaction depends on the amount of transaction. If it's a small amount the 2 to 4 nodes/people are sufficient if its a large amount then more validators are required. There can be several chains but only the longest is chosen. But this isn't safe what if a bad miner just keeps creating false blocks and makes it the longest chain? (You can't trust people on this network as its mainly done to earn big revenue).Hence the proof of work principle came where miners have to solve complex encrypted algorithms (which protects the transaction) to validate it. This prevents extra-long chains and only valid blocks will be added to the person chain. So if a,b,c miners approve of a block at the same time then the longest chain is chosen as he/she has decoded the encryption faster.
Linked List application
Blockchain works solely on linked lists.Each block represents a node, the pointers represent the links/chains between the nodes, and the chain of blocks is called the blockchain. You may see that each node is divided into two parts,the first one contains the transaction history and the second part contains the address of the next block.
Bitcoin-the first blockchain
Bitcoin is a cryptocurrency. This is an example of a blockchain that consists of several blocks containing a certain amount of transaction data. Bitcoin like all other blockchains believes in transparency hence no third party interference is allowed, ensuring it to be a highly secure mode of transactions.
Spotify using blockchain?
Spotify has had issues
Unfair revenue sharing
Improper rights and royalty management
Blockchain ensures that people go through a fair and transparent process hence many companies including Spotify have adopted this technology.
Comments