BLOCKCHAINS: Overview

(Introduced in 1991 by Stuard Harber and W. Scott Stornetta)

Blockchain are a kind of Database.

PURPOSE OF BLOCK CHAIN: It’s a technology which gives permission to record and distribute the
data or transactions, but NOT to edit it.
It came to application for the first time in 2009 with the introduction of Bitcoin.

Why is it called the Blockchain?

Blockchain collectes data in groups and these groups are called Blocks.
Every block has limited storage capacity.
When one block gets filled it gets attached to the previous block and thus creates a chain. Hence, called
Blockchains.
Every block contains the Cryptographic Hash of the previous Block.

What is Cryptographic Hash?

Cryptographic Hash is a string of numbers and letters which is created after every transaction.
Hash is the connection which converts input of numbers and letters into fixed length of encrypted output.
It not only depends on the transaction, but also on the previous Hash.
If there is even a small change in transaction, a new Hash is created. Hence, it is easy to detect any
change or fraud in the record.
These are spread and shared through many computers(Nodes) and they check if there is any change in
Hash.
If most of them approve the transaction, that transaction is written in the block.
These nodes form the infrastructure of blockchain.
These blockchain store, spread and preserve the Data/Transaction.
Nodes keep history of transaction and Hash for future verification.
The blockchains update themselves from time to time.

For crypto currency like Bitcoin, blockchain is a specific kind of database which stores every bitcoin
transaction. Blockchain helps to spread the bitcoin option on computer networks, which makes it possible
to operate and regulate the currency without any central authority.
It reduces many risks and eliminates most of the processing and transaction fees.

Blockchain in bitcoin stores its monetary data, but it is capable of storing different kinds of data as well. It
can make services to many areas more efficient.
For example,
In Banking, through integrating blockchains, the transaction process can be completed in 10 minutes.
Also, Exchange between Banks and institutions can be fastened up.
In the Health care sector, Blockchains can be used to securely store medical reports of patients, ensuring
the safety of their record. These blockchains can be further secured by private keys for privacy.
Block chains can be used in supply chains. In the supply chain, suppliers can store records of their
products in blockchains, which can be used to check authenticity of products, etc.

Blockchain improves accuracy, creates cost deduction, gives security and privacy to data.
Apart from its pros, it also has few cons, that is it is not free, due to its super speed it can do Limited
transaction at a time, since it is still new to society and market there is less awareness about it, it has used
for many illegal work from long, there is no strong regulating laws, etc.