Loading

Blockchain

What are the Key Elements of Blockchain Technology?. The Complete Blockchain Developer Course 2022 [Videos].

The entire concept of blockchain is a combination of a handful of different concepts and techniques i.e. a distributed ledger system, peer-to-peer network, key cryptography, hashing, and proof-of-work, etc.

1. Peer-to-peer Network

A peer-to-peer network is a decentralized and distributed network. In a P2P network, the participants nodes are not linked to a central body or server. Instead, all the nodes/computers are independent and are directly linked with one another to carry out transactions or information exchange. In a public blockchain, it is not necessary to know and trust each node in a network personally. The network and security are so designed such that authentic and legitimate transactions can take place even if the identities of sender and receiver stay anonymous. A peer-to-peer network is a secure network with direct contact between two nodes. A participant node of such a network has no geographical constraints, that is, it can be a part of the network from anywhere in the world.

2. Distributed Ledger System

Blockchain works on a distributed ledger system. By distributed ledger, we mean that the data record is not kept by any one central authority rather, it is available at every node of a P2P network. Every participant node in a network keeps updated copies of the data record or ledger in a blockchain. For instance, if you and I are two nodes in the Bitcoin public network, we both will have the same copy of the record of bitcoin transactions that took place till date. The record will not just show us our individual transaction but the transactions that took place between any two nodes in the network. This makes the entire network fraud-proof because everyone has a legitimate copy of the records and no one can falsify the transactions or double-spend the same bitcoins.

In every scenario, where blockchain is used, they adopt the same concept of the distributed ledger system.

3. Key Cryptography

Now, after understanding how a network is laid out to carry out transactions. The next natural question is of security of our data and the authenticity of participant nodes. If A wants to send a message or confidential information to B in a public network with hundreds of nodes, what is the guarantee that it reaches only B and not C? How can B assure that the message is coming from A? How can A and B both make sure that the message was not changed in the middle of transmitting?

Well, the answer to every question and solution to this problem of security, data integrity, and user authenticity is “Asymmetric key cryptography”. In such type of cryptographic arrangement, every node has two keys; Private key and Public key. The private key is known only to the node owner whereas the public key is known to all the nodes in the network. The combination of a private key and a public key makes a unique digital signature for every node. This makes the node authentic to carry out transactions and verifications. We will learn more about the cryptographic techniques in a separate post.

4. Hashing

Hashing is a non-reversible process of encrypting a blocks information. Every block in a blockchain is composed of a block header and transaction data. Hashing is encrypting an input value of variable length into an output of fixed length using SHA256 (Secure Hash Algorithm 256) algorithm. For instance, look at the image below to see how hashing encrypts a text value into a hash value. We will not go deep into the technicalities of the hashing algorithm as it is beyond the scope of our general discussion.


See All

Comments (687 Comments)

Submit Your Comment

See All Posts

Related Posts

Blockchain / Blog

What is Blockchain?

Blockchain is a secure series or chain of timestamped records stored in a database that a group of users manages who are a part of a decentralized network. Blockchain is a decentralized or distributed ledger where each node in the network has access to the data or records stored in a blockchain. The encryption of all the important data records in the blockchain is done using cryptographic techniques. This ensures the security of the data in the blockchain.
24-Mar-2022 /46 /687

Blockchain / Blog

What are the Types and Benefits of Blockchain Technology?

There are primarily two types of blockchains; Private and Public blockchain. However, there is a third type of blockchain too, known as Consortium blockchain. Before we get into details of the different types of blockchains, let us first learn what similarities do they share. Every blockchain consists of a cluster of nodes functioning as a peer-to-peer (P2P) network system. Every node in a network has a copy of the ledger which gets updated timely. Each node on all types of blockchain can verify transactions, initiate or receive transactions and create blocks.
24-Mar-2022 /46 /687

Blockchain / Blog

What are the Key Elements of Blockchain Technology?

The entire concept of blockchain is a combination of a handful of different concepts and techniques i.e. a distributed ledger system, peer-to-peer network, key cryptography, hashing, and proof-of-work, etc.
24-Mar-2022 /46 /687