Blockchain = Block + Chain = listOf(block)
The concept of blockchain technology is set to revolutionize not just the finance or healthcare industry but many aspects of business, government and even our personal lives. The problem is that there is so much hype and misunderstanding out there, which made me take a step back and explain the basics of what blockchains are and how they work — in a very simple way, that hopefully, anyone can understand, even with no prior technical knowledge necessary.
Blocks in the blockchain consist of digital pieces of information and specifically have three parts to them:
- They store information about transactions like the date, time, and the amount transferred
- They store information about participants. For example, it will contain information for your purchase from Amazon on a record with your name along with Amazon.com. But instead of using your actual name, your purchase is recorded without any identifying information, it is referred to as “digital signature” and is sort of like a username.
- They store information that helps in differentiating them from other blocks.
A blockchain, on the other hand, is duplicated, in its entirety, across many computers.It means no one person or entity (such as a corporation, or government) has control over the content of the file. While whoever is in control of the computer storing the file which you are reading now can edit it, to make whatever changes they like, that isn’t the case with a blockchain. Editing the blockchain is only possible if there is a consensus between the network of computers storing separate, but identical, versions of the blockchain. And this is made possible thanks to the second fundamental innovation of blockchain — cryptography.
Blockchain is structured in a way that the clue to this one is in the name a blockchain is a computer file consisting of blocks of data chained together. Each ‘block’ which can be any size depending on the type of blockchain contains a link to the previous block hence forming a chain.
It also contains a timestamp to record when the information in that block was created or edited. Finally, it contains the data itself which is whatever the blockchain is being used to record. This could be the ‘value’ of the block, in the case of blockchain currencies such as Bitcoin, transactional data such as an exchange of goods or services between parties, or ownership rights, when the chain is used as a record of who owns what.
In fact, blockchains can be used for anything which requires transactions to be recorded in a secure manner.
• Storing government records such as marriage certificates, business registrations, health records and much more. Governments in countries such as South Korea, Estonia and Dubai are already advancing these concepts.
• Verifying and tracking ownership of intellectual property rights, from recording and tracking royalties for musicians to the rights to photos and images, as Kodak is developing at the moment.
Done by Santhosh Kumar (https://medium.com/@asanthoshkumar01)
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