What is it?
Block = Set of information & Chain = It’s storage(database).
So in total, this can be said as set of information residing in an open database. You, me or anyone can become a part of this open(public) database.
Information in blocks would contain following:
Information about one or more than one transaction, usualy the size of the overall block is of 1 MB.
Information about each transaction such as – timestamp, amount, your masked name(not actual name) which will be a digital signature.
Information about itself with an identifiable unique code, which is called as “hash”, this distinguishes itself from other blocks.
Chain (The Storage)
The storage can be your, mine or anyone’s system available over internet, a single block is replicated/stored in multiple places, so even if some system is not available on internet, respective information can be fetched from other available computers online.
How this thing function
Transaction Initiation —> Transaction Verification —> Transaction Added in Block —> Block is assigned unique code “hash” —> Block added to the blockchain
First of all a transaction is initiated example your are buying something from an online store, you select all the items to purchase & finally go through the checkout page.
Next after checkout the transaction must be verified with the available records in public over the network, this is taken care by the computers available over the network.
Next after the computers over the network responds to the accuracy of the transaction(purchase timestamp, amount etc.) it is added to the block.
Next, since the block may have other thousands of other similar more information, so it becomes mandatory to assign a hash to it.
Next, once hash is assigned, it’s ready to be added to the blockchain.
Area of it’s Use:
Since the action is actually happening within the netowrk of computers, so this technology does not require to be regulated by any authority. It also eliminates the extra charges like admin/transaction fee etc.
If you drop a cheque late Friday evening in bank, it normally gets cleared by Monday, leaving you with no money, whereas using this technology the transaction can take as much as 15 minutes for it’s verification, completion & processing.
If you are renting your apartment using a smart contract with another person. You agree to give the door code(or place where the key is kept) to the apartment as soon as he pays your deposit. Both agree to the deal of smart contract & would hold onto and automatically exchange the door code for his deposit on the date of the rental. If you don’t supply the door code by the rental date, the smart contract refunds his security deposit eliminating the fees that typically would have been gone to notary or third-party mediator.
- Voting, Supply Chain
- Real Estate/Property Records
- Healthcare records of patients
some pros & cons:
- Difficult to keep check if used for illegal activities
- High cost for mining bitcoin(Consumes huge electricity)
- From user perspective cost reduction in eliminating middle man.
- Hard to tamper
- Highly rated in accuracy
- Secure transactions
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