Blockchain :- The Enigmatic tech of the future

BlockChain, What is the buzz all about? When we hear this term we seem to correlate it to Bitcoin, actually, they’re connected but not in the way we think! Let’s dive in!

Many of us must’ve heard people saying that Blockchain & Bitcoin are two different things, as in Bitcoin is a cryptocurrency & BlockChain is the underlying technology. Before we try to figure out what’s what, let’s understand some basic things about BlockChain: So what’s a BlockChain?

It’s simply a chain of blocks, which consists of data & some cryptographic hashes which make sure that the data stored is not tampered with. But How? So, each of the blocks along with the data consists a Hash, which can be thought of as an alpha-numeric ID to the block (Basically a primary- key) & the block also contains the Hash of the previous block. Thus creating a CHAIN! If tampering is done in a block its hash would change and this chain would break.

There always remains a risk of changing the hashes of all the blocks in the chain using computers & joining the chain again after tampering. To prevent this from happening the BlockChain run on a concept known as Proof-of-work which essentially slows down a process of creation of blocks & adding it to the BlockChain irrespective of the computational power!

What?! Slowing down a process is a part of technology?

The answer to that is YES!

As when the process is slowed down, one cannot tamper with a block and get away with re-calculating the hash of all the subsequent blocks & joining the chain again.

 Once we know this, we have to know that the BlockChain has a peer to peer distributed network. This is the reason some people also call it a distributed ledger. This is the peculiarity of the BlockChain as it adds the extra security cover. We are so used to centralization that even our transactions are approved by the central authority i.e. Banks; however, BlockChain is precisely converse to that; as its structure is peer to peer & everybody that has the requisite computational power can participate in the network & get a copy of the whole chain! This secures the network even more as all the blocks are added only on approval from all the nodes (i.e. such participants).

To summarize, in order to hack a BlockChain one would require to recalculate the hashes of all the blocks, do the proof-of-work & get control of at least 51% of the total participating computers! When even one participant does not know who the other participant is! Seems pretty difficult, right? If you think this makes BlockChain really awesome, you haven’t heard of Smart contracts! Sounds similar to Smartphones, but believe me they’re smarter!

Smart contracts are basically contracts which are coded in such a way that when the conditions mentioned in them are satisfied, they’re executed, they even move money from one person to another! Their existence is one of the reasons why BlockChain has become so famous! So much time we have invested in understanding BlockChain but I haven’t mentioned cryptocurrency much (which runs on BlockChain, at least as they say!) 

The truth is – A BlockChain is as dependent on a cryptocurrency as a cryptocurrency is on a BlockChain.

This might be confusing, let me get it clear :-

As I said earlier, that BlockChain is based on a peer-to-peer network & that anyone can be a part of it & get a full copy of the BlockChain.

At the cost of repetition, this helps increase the security as now all the participants have to agree on a transaction before it gets in the block. However, some questions remained unanswered that why would the participants do all this? What is this trouble for? The answer is very very simple! They are rewarded, by paying them cryptocurrency! The participants are called miners, & the process of checking a transaction before adding it in a block is called mining!

Fun Fact: There are only 21 million Bitcoins in total & 2 million of them are not mined yet as Satoshi Nakamoto the founder of Bitcoin has saved it for the future. Now if it has to be asked who really Satoshi Nakamoto is, that would be a really difficult question. On a lighter note: some say Elon Musk is Satoshi Nakamoto!

Getting back, The BlockChain is supposed to be the revolution across all industries, it’s in a nascent stage of development but has a capability of doing a lot more than it’s expected to do.

Some people would still have a question in their minds as to, WHY BlockChain?

The answer to that would be :-

1. Saves time

2. Saves efforts

3. Saves MONEY!

An example could be: in a manufacturing of tomato sauce, if the tomatoes purchased from one farm were poisonous then a BlockChain has a capability to locate the bottles which contain the sauce from those tomatoes by just track back through the blocks in the BlockChain & provide you with the exact batch number & location of those bottles in literally no time! This thing would normally require days in a normal setup. It can also be used for the voting process, as in the citizens can vote to elect a government in the BlockChain network, this specifically will be welcomed in Indian context as then politicians claiming that EVMs are hacked will not be able to have any kind of baseless argument, knowing the nature of security in a BlockChain.

Its existence is being developed in the shipping & logistics space as well, also is a great measure to maintain land records of a state- so that we can have a definite title of the land and can know a lot more about the land, Building appurtenant, is it agricultural land, who held the title earlier, whether it is mortgaged, when was the last time it was renovated, and a lot more other information, This is currently used by the state of Andhra Pradesh!

The point is it has the capability of providing actionable data & thanks to smart contracts it also has the capability to act on it! It is expected to be a major disruptor in the BFSI (Banking & Financial services industry), the BFSI is among the early adopters of the BlockChain technology.

A very interesting topic which can be touched upon as a separate topic for discussion!

Hope this was value-adding, would love to know your thoughts in the comments section!