4 Key Fundamental concepts of Blockchain
Published: 2024-05-07 15:41:59




**The Concept of Blockchain and its Terminologies**

Thank you very much for clicking on and reading this article. My name is Ibukunoluwa Emmanuel Fajinmi, lets jump right into it.


What is Blockchain and Bitcoin?..

Bitcoin birth cannot be complete without the development of  blockchain. So what is Bitcoin?

**Bitcoin** is a crypto currency that is used as a medium of exchange when performing transactions and it is always done without the help of third parties. It is also a digital currency that can be converted into physical cash. It was developed in the year 2008.
Prior to this, Bitcoin stands on the foundation of Blockchain. This then brings us into the world of  blockchain. A decentralized database called blockchain is dispersed among the nodes of a certain computer network. In a blockchain, a block is a collection of verified data and information that is linked to its predecessor by a single data structure.

**Why Blockchain**

Yes, why blockchain really?
Blockchain creates a simple and secure environment for individuals, organizations and businesses to perform transactional operations thereby reducing data vulnerability and increasing data integrity. With the decentralized nature of blockchain, the controlling power of a particular type of network is distributed equally among its nodes. Nodes are devices or computers that are connected to a particular type of blockchain network.	

When a transaction is completed it is shared to all the network nodes this is to ensure transparency  and also within a blockchain network there is what we call consensus protocols where blockchain network nodes check and approve transactions before adding them to the blockchain network. This process helps to make sure that every activity or transaction is agreed to be true or not.
Transactional trust, transparency and instant traceability  is built on the foundation of blockchain enhanced security. Blockchain reduces paper works, errors and overhead transaction costs


**The Concept of Blockchain**
To understand blockchain, we have to understand the concept behind it. 

In order for blockchain to function effectively, it uses four basic concepts. Consensus is the first, distributed ledgers are the second, smart contracts are the third, and file storage systems (databases) are the fourth. A decentralized ecosystem governs how these characteristics communicate with one another.

1. **Decentralized consensus**: Since a blockchain lacks a central authority to regulate its operations, it raises concerns about the process by which choices are made. Consensus is the process by which blockchain nodes vote and decide whether or not to conduct a particular action.

2 **Smart Contract**: One of the key components of a blockchain is a smart contract. Credible verification within the blockchain network is made possible by it. 

3.**A publicly distributed ledger**: This is a kind of record book used to keep track of transactions. This is made available to all blockchain network nodes in a public manner.

4.**File Storage System (Database)**: Databases are used to store and retrieve information within a blockchain. However, because these databases are decentralized, nodes can regulate access, content, and context. denying someone central authority.


**Top 5 Blockchain terminologies**
Here are the top 5 blockchain terminologies. 

**Public Key**: To ensure transaction transparency, a public key is a digital code that is shared with the public and enables others to validate the signature. Using cryptographic techniques, a private key can be converted into a public key.

**Private Key**: To enable a specific user to sign transactions, a private key is a secure digital code that is generated and known only to that person. It gives a blockchain address's owner complete control over their cryptocurrency by sealing their ownership.

**Public ledger**: Public ledger: In a blockchain network, a publicly distributed ledger serves as a record book for storing and exchanging transactional data. 

**Proof of Work**: Digital currencies employ a process called "proof of work" to confirm the veracity of newly added transactions to a blockchain. New data integrity is guaranteed by the use of Proof of Work.

**Proof of Stake**: A consensus method used in cryptocurrencies called proof-of-stake is used to process transactions and add new blocks to a blockchain. A distributed database can be kept safe and its entries verified via a consensus technique.

**Mining**: Mining is the process of figuring out cryptographic riddles and finishing them in order to validate transactions on a certain blockchain network. People who perform this kind of workout or participate in it are referred to as Miners. Mathematical puzzles are solved by miners, and the first person to do so gets to add a new transaction block to the blockchain..

**Consensus Mechanism**:  A technique that unites every node in a distributed blockchain network around a single data set is known as a consensus mechanism. They serve as the criteria for verification that each blockchain transaction must pass to be accepted.

**Blockchain Development Tools**
Here are the top 10 blockchain development tools:
1. Geth
2. Web.js
3.  Solidity
4. Hyperledger Fabric
5. Ethereum
6. Solc
7. Truffle
8. Ganache
9. Metamask
10. Remix