Did you know that Cryptocurrencies and Blockchain are not the same? Blockchain is the underlying technology that is revolutionizing how business is done in a transparent and incorruptible manner, whereas cryptocurrencies are financial instruments riding on the Blockchain. Today let’s understand what is Blockchain? Next week we’ll discuss cryptocurrencies, their creation and their uses.
What is Blockchain? Stated simply, a Blockchain is nothing more than a chain of blocks. But this is where it gets revolutionary, and we’ll explain why organizations and indeed countries are embracing it. The Blockchain is an open ledger where every single transaction is recorded. Thousands of computers from around the world are tapped in “watching” the transactions that appear on the network be it a “Buy” or a “Sell” order. Now these computers are run by individuals and corporations, and no one knows the identity of the other as they’re scattered all over the planet. So, these anonymous entities are “watching” each transaction that shows up for fulfillment.
This, therefore, brings us to the 1st important aspect of Blockchain technology; that the ledger is TRANSPARENT. It can be viewed by anyone [even you and I can also download the chain and “look” at every activity that’s occurring]. If the transaction appears fake when it arrives - say someone is trying to sell a cryptocurrency but there is no record of this entity ever having purchased that same cryptocurrency – then all these computers [called Nodes], reject the transaction and disallow it from taking place.
This then brings us to the 2nd important aspect of Blockchain technology; that it works by CONSENSUS. Once a transaction is approved by all, this then goes into a holding area called the MEM Pool. Once the MEM Pool is full (it holds a maximum of 2MB of data), the block gets approved and appended to the existing chain thus forming the next block in the blockchain. One block is approved and added to the chain every 10 minutes. It is important to note that each block contains the DNA of the previous block so if anyone tries to change an approved transaction in any one block, they would then have to change every single preceding block going back to 2009 when the first Genesis block was created. To alter the Blockchain would take thousands of years and cost trillions of dollars to reverse – all the while new blocks were still being created every 10 minutes. The DNA of these blocks forming every 10 minutes would have to be altered too!
Obviously, tampering with the Blockchain would be an exercise in futility and not even nation states would attempt it. This brings us to the 3rd important aspect of Blockchain technology; that it is INCORRUPTIBLE. Indeed, Blockchain is ushering in a new dawn of TRUTH!
Written by, Ravi Bahal
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