Blockchain Technology

blockchain is a distributed database that maintains a continuously-growing list of records called blockssecured from tampering and revision. The first blockchain was conceptualised by Satoshi Nakamoto in 2008 and implemented the following year when the bitcoin network was started.

The blockchain is a core component of the digital currency bitcoin—conceived in 2008 and first implemented in 2009—where it serves as the public ledger for all transactions. In the bitcoin case, every compatible client is able to connect to the network, send new transactions to it, verify transactions, and take part in the competition to create new blocks. The competition creating new blocks is known as mining. Decentralised consensus can be achieved for the first time with a blockchain. The bitcoin design has been the inspiration for other applications.

Decentraliazed Digital ledger

The blockchain is a decentralized digital ledger that records transactions on thousands of computers globally, and the transactions cannot be altered retrospectively. A blockchain consists of blocks that hold batches of valid transactions. Each block includes the hash of the prior block in the blockchain, linking the two. The linked blocks form a chain. Variants of this format were used previously, for example in Git, and it is not by itself sufficient to qualify as a blockchain. The blockchain is parsed by software to extract relevant information. A blockchain implementation consists of two kinds of records: transactions and blocks.

In addition to a secure hash based history, any blockchain database has a specified algorithm for scoring different versions of the history so that one with a higher value can be selected over others. Peers supporting the database don’t have exactly the same version of the history at all times, rather they keep the highest scoring version of the database that they currently know of.

Whenever a peer receives a higher scoring version (usually the old version with a single new block added) they extend or overwrite their own database and retransmit the improvement to their peers. There is never an absolute guarantee that any particular entry will remain in the best version of the history forever, but because blockchains are typically built to add the score of new blocks onto old blocks and there are incentives to only work on extending with new blocks rather than overwriting old blocks, the probability of an entry becoming superseded goes down as more blocks are built on top of it, eventually becoming very low.