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Parag Chirde
Parag Chirde

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Explain Blockchain like I'm 5

  • The concept of blockchain came with Stuart Haber and W. Scott Stornetta when in 1991 they published a paper about how to timestamp a digital document. It was until Satoshi Nakamoto published a paper on Bitcoin: A Peer-to-Peer Electronic Cash System which was completely based on the Blockchain concept.
  • Blockchain lets us for the first time have a shared version of truth that is open, distributed and tamper proof in its nature. Blockchain is an emergent technology concept that enables the decentralized and immutable storage of verified data.
  • Blockchain has a wide ranging set of applications and almost any field can benefit from having such a technology at its disposal. Blockchain is also heralded as a way by which trust can be ensured in the online world and lets us have greater confidence in the range of products and services that we use online.
  • While previously we would have the backend code residing in a server or a set of servers, Dapps let us run web enabled applications where the back end is instead hosted on a blockchain network which executes the code that is needed for it.
  • Distributed Ledger( a collection of accounting entries consisting of debits and credits) Computing power and breakthroughs in cryptography, along with the discovery and use of some new and interesting algorithms, have allowed the creation of distributed ledgers.
  • Blockchain is a new technology that uses cryptography with distributed computing. It was Satoshi Nakamoto the genius behind building up the blockchain where a network of computers collaborate to maintain a shared and a secured database. So we can call blockchain as a secure distributed database. Mining computers or nodes on the network validate the transaction, have them the block they are building and once the block is verified it is broadcasted to other nodes that all have the copy of.
  • Now since there is no centralized authority to verify the transaction the blockchain depends upon a distributed consensus algorithm. In order to make an entry on to the blockchain network(database) all the nodes have to agree on the state of the block so that no one computer in particular can make an alteration without the consensus of the others. Once the block is accepted it is finally added to the chain which may contain countless number of other blocks.
  • Blockchain was designed so that the transactions are immutable. The first generation blockchain was much more like a database, but the second generation of the blockchain provides the facility to execute any computer code on the blockchain.

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