Blockchain technology has become incredibly popular over the past few years thanks in part to the growth of cryptocurrencies like Bitcoin. To learn more about cryptocurrency and how it works, please read our article Everything you need to know about Cryptocurrency.
Like the name describes, Blockchain is a chain of blocks that store information. The system is designed to be a secure open ledger. This means anyone can access it while keeping the data safe inside it. Once information has been recorded inside a blockchain, it becomes very difficult to change it.
How does Blockchain work?
Each block contains data, a hash, and the hash of the previous block.
The data depends on what type of blockchain it is. For the Bitcoin blockchain, transaction data is stored in the block such as who was involved in the transaction and the amount of bitcoin that was exchanged.
Each block also has a hash, which is like an unique digital fingerprint that identifies the block and all of its content. If you change the data content of a block, you will also change the hash. This makes hashes useful when you want to detect changes made within a block.
Finally, a each block will also contain the hash of the previous block. This is what creates the chain of blocks. If the hash is changed in one block, all following blocks will become invalid as the hash no longer matches.
How is it secured?
On top of this, Blockchain as an added security feature called Proof-of-Work. What this does is slows down the creation of hashes by adding an extra layer of calculation needed. This means that it has harder to tamper with the information inside each block.
Blockchain uses a Peer-to-Peer (P2P) Network where everyone gets a copy of the blockchain and check that everything is in order. When someone creates a new block, it is sent to everyone on the P2P network to check that it hasn’t been tampered with. Once it is verified it is added to the blockchain.
Blockchain is not just used for cryptocurrencies. The Plaas App is used by African farmers to seamlessly trade their animals and crops at market prices.