A Blockchain is a type of distributed ledger technology (DLT) that consists of growing list of records, called blocks, that are securely linked together using cryptography.
Let's breakdown the terminologies in the above definition. We find below terminologies,
- Digital Ledger Technology (DLT)
- Blocks
- Cryptography
It is otherwise called as distributed ledger technology. It is simply the opposite of centralized database. Firstly, what is a ledger? A ledger is a book or collection of accounts that records account transactions.
Why is Blockchain addressed as digital ledger if it can record more than account transactions? What other transaction details and information can it hold?
Digital Ledger Technology is just a ledger which is shared among multiple nodes. This way there exist no need for central authority to hold the info. Okay, how is it differentiated from central database and what are their benefits?
There is an organization which has 4 branches whose data are stored in a centralized database. So even if one branch needs any data from ledger they need an approval from database in charge. And if one hacks the central database he gets to tamper and control all the data.
Now lets assume every branch has a copy of the ledger and then once anything is added to the ledger by anyone branch it is gonna automatically reflect in all other ledgers available in other branch. This is done using Peer-to-peer network.
So this means even if information is tampered in one branch we can find out. If one branch is hacked we can be alerted ,so we can safeguard other branches. Now, assume these branches as computers or nodes and the ledger is a transaction record or digital receipt. If one ledger is hacked in a node we can detect since there will be a mismatch in comparison with other node information. So this is the concept of Digital Ledger Technology.
Is it required for all nodes to have access to all information in other nodes? Wouldn't this require enormous storage space in each node?
In short a block is nothing but collections of records with a labelled header. These are connected cryptographically. Once a new block is added to a chain, the previous block is connected, more precisely said as locked and hence, will remain unaltered. We can understand this concept once we get a clear understanding of working mechanism of blockchain.
It is the practice and study of secure communication techniques in the midst of adversarial behavior. More broadly, cryptography is the creation and analysis of protocols that prevent third parties or the general public from accessing private messages.
Which cryptography technology is most widely used in blockchain and why?
So, in general, blockchain technology is a distributed record holder which records the information about ownership of an asset. To define precisely,
Blockchain is a distributed, immutable ledger that makes it easier to record transactions and track assets in a corporate network. An asset could be tangible (such as a house, car, cash, or land) or intangible (such as a business) (intellectual property, patents, copyrights, branding). A blockchain network can track and sell almost anything of value, lowering risk and costs for everyone involved.
So this is all about introduction to blockchain technology. To learn more about the topic refer below links....