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BLOCKCHAIN

What is Blockchain
Technology? 01
A blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block a timestamp, and transaction data (generally represented as a Merkle tree).

By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way
How Does
Blockchain Work? 02
Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain.

Information held on a blockchain exists as a shared — and continually reconciled — database. This is a way of using the network that has obvious benefits. The blockchain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralized version of this information exists for a hacker to corrupt. Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet.
The Three Pillars of
Blockchain Technology 03
The three main properties of Blockchain Technology
which has helped it gain widespread acclaim are as follows:
    Decentralization
    Transparency
    Immutability

# Decentralization

In a decentralized system, the information is not stored by one single entity. In fact, everyone in the network owns the information.

In a decentralized network, if you wanted to interact with your friend then you can do so directly without going through a third party.

That was the main ideology behind Bitcoins. You and only you alone are in charge of your money. You can send your money to anyone you want without having to go through a bank.

# Immutability

Immutability, in the context of the blockchain, means that once something has been entered into the blockchain, it cannot be tampered with.

The reason why the blockchain gets this property is that of cryptographic hash function.

In simple terms, hashing means taking an input string of any length and giving out an output of a fixed length.

In the context of cryptocurrencies like bitcoin, the transactions are taken as an input and run through a hashing algorithm (bitcoin uses SHA- 256) which gives an output of a fixed length.

# Transparency

One of the most interesting and misunderstood concepts in blockchain technology is “transparency.” Some people say that blockchain gives you privacy while some say that it is transparent.

Why do you think that happens?

Well… a person’s identity is hidden via complex cryptography and represented only by their public address. So, if you were to look up a person’s transaction history, you will not see “Bob sent 1 BTC” instead you will see “1MF1bhsFLkBzzz9vpFYEmvwT2TbyCt7NZJ sent 1 BTC”. The following snapshot of Ethereum transactions will show you what we mean:
So, while the person’s real identity is secure, you will still see all the transactions that were done by their public address.
Why do people use the
peer-to-peer network? 04
One of the main uses of the peer-to-peer network is file sharing, also called torrenting. If you are to use a client-server model for downloading, then it is usually extremely slow and entirely dependent on the health of the server. Plus, like we said, it is prone to censorship.

However, in a peer-to-peer system, there is no central authority, and hence if even one of the peers in the network goes out of the race, you still have more peers to download from. Plus, it is not subject to the idealistic standards of a central system, hence it is not prone to censorship.
If we were to compare the two :

What is Blockchain?
And What New Applications Will It Bring Us? 05
The blockchain gives internet users the ability to create value and authenticates digital information.
What new business applications will result from this?
※ Source : blockgeeks
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