#BackToBasics: All Your Questions About Blockchain Answered
Tags: Blockchain, Blockchain Technology, Blockchain Development, Data, Basics

#BackToBasics: All Your Questions About Blockchain Answered moneyguru Follow Dec 30 · 3 min read

We have written many articles related to Blockchain, however, sometimes it’s important to go back to the basics and understand in and out of a topic in the simplest language possible, and that is what this article is about.

What is a blockchain?

In the most basic sense, Blockchain was originally created to timestamp digital documents so that it becomes impossible to backdate them or meddle with them.

So, imagine this. Blockchain is just like the old style ledger. In the olden days, once some data has been entered into the ledger, it is physically impossible to alter the data or backdate the data because there would be no space in the physical ledger.

That’s why blockchain gets all the praise. It’s a digital ledger with no edit option.

The structure of blockchain

Let’s take one block. Each block contains some data, hash of the block and hash of the previous block.

What data will be stored in the block?

That depends on the type of the blockchain. If it’s a blockchain for a particular bank, it will contain details of transactions and such.

What is a hash?

A hash is like a fingerprint. All of a block’s contents are identified by the hash and it differs from block to block, just how a fingerprint differs from person to person. Since they are unique, if you change the contents of the block, the hash will also change, making it easy to detect changes in a block.

Why does a block have the hash of the previous block?

To make the blockchain secure.

Let’s say, a blockchain has 5 blocks in a chain. If someone changes the contents of the 3rd block, they not only change the 3rd block, they will also change the 4th block. Because, the 4th block will consist of the hash of the 3rd block.

So, if you make changes in one particular block, the following blocks will also be changed, making the entire blockchain invalid.

What if someone tampers with one block and changes the hash of other blocks as well?

Not possible. Because of ‘proof of work’.

To prevent tampering with blocks, blockchains have ‘proof of work’. For example, in bitcoin, it takes around 10 minutes to calculate the required proof of work and add a new block to the chain. So, as per the above example, if you meddle with the 3rd block, you need to calculate the ‘proof of work’ for all the other following blocks to make your meddling go undetected.

What if someone does the proof of work for all the blocks? Will they be able to go undetected then?

Nope. Because of the usage of a ‘peer-to-peer’ network.

In the TED talk given by Lorne Lantz, he says how blockchain is a decentralised network and he gives a great example for this.

In earlier days, if you want to know something, you turn towards an Encyclopedia. But the encyclopedia is a centralised database because Britannica will hire its own editors and they will edit and update the content periodically. However, Wikipedia is a decentralised database and it has hundreds and thousands of editors, updating the content immediately after something happens, which makes Wikipedia more efficient.

In the same way, blockchains use a peer-to-peer network and everyone is allowed to join. So, if you join this network, you will get a full copy of the blockchain. So, if someone tampers with a block, then all the other nodes in the network will reject that block. Unless and until the new changes are accepted by every node in the network, that block can’t be added to the chain.

Hope the above explanation cleared all the questions you had about this technology in the simplest way possible.