Blockchain technology means a decentralized, distributed ledger that records the origin of a digital asset. Blockchain, also attributed as Distributed Ledger Technology (DLT), making history of digital assets unalterable and transparent over the use of decentralization and cryptographic hashing.

A simple comparison to understand blockchain technology is Google Doc. A document created and shared with a group of people, the document is shared rather being copied or transferred, and thus it creates a decentralized distribution chain by which everyone can access the document at the same time. Any modifications done in the doc will be recorded, thus making changes absolutely transparent.

The “Blocks” on blockchain are comprise of digital pieces of information. Mainly of three parts:

  1.  Transactions like the date, time and the amount of your latest purchase from online sites are all stored in the blocks.
  2. Information on the participants are also stored. If there has been a splurge in purchase on the online site, the same will be recorded along with the customer name with the online site’s address. A “digital signature” is used to record a purchase by a customer instead of an actual name.
  3. The information stored in the blocks are separate from other blocks, just as each individual has different name to distinguish us, there is a unique code called “ hash” that reveal it apart from every other block. Special algorithms are used to create Hashes which are cryptographic code.

How does a block chain work?

  1. A transaction has to occur: During an impulsive purchase, one goes against their better judgement and makes a purchase, a block will group and compose probable other thousands transactions, so that an online purchase will be grouped in the block along with other user’s transaction information.
  2. Verification of transaction is a must: A transaction of a purchase is a must. There’s someone in charge to audit any new data entries along with other public records; and this job is left to a network of computers. When an online purchase is made, that network of computers rushes to check the transaction has happened the way it was said. In short the details of the purchase is confirmed along with the transaction’s time, Rupee amount, participants.
  3. The block stores the transaction: Only after the transaction has been verified does it get a go signal. The block stores the transactions of the amount purchased, one’s digital signature and online company’s digital signature. Thousands of other such transactions also join.
  4. A hash must be given to the block: A unique identifying code called a hash will be given to all transactions once the verification has been done. Once block gets hashed it is added to the blockchain.

The Blockchain is publicly available for all to view once the new block is added.

How safe is Block chain?

Issues of security and trust are accountable in blockchain technology. The new blocks are stored linearly and chronologically, by which they are added at the “end” of the blockchain. It is difficult to alter the contents of the block once added, as each block contains a hash along with the hash of the block before it. A math function creates the hash codes by which the digital information turns into string of numbers and letters. The hash code changes if there is editing in the information.

Another importance to security; in case a hacker tries to edit somebody’s transaction on an e- purchase the buyer ends up paying double the purchase. The block’s hash will change accordingly, and the hacker will have change the earlier, thus making it difficult to edit and impossible to delete. So in order to address the trust issue, the implementation of tests for computers that wants to join or add blocks to the chain are done in blockchain network.

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