Howdy Friends today I am going to share Few Introductory steps on Blockchain. And I am sure after going through this post you will get to know complete overview of Blockchain.
Introductory Steps On Blockchain – What is Blockchain ?
Block chain is only a record, a ledger(record book) of all the Bitcoins transactions that ever taken place. It is like a ledger maintained by the bank to keep the record of all the transactions carried out by the customers of bank.
But there is a difference in terms of security and access rights. In bank the ledger controlled by the bank people. Bank can see the transactions. Bank uses its own access system and security system to secure the ledger and to enter the transactions.
Whereas in Blockchain ledger file shared among thousands of participants across the globe these participants called miners. Anyone can become the miner by simply downloading the Bitcoin software that is open source.
Any new Bitcoin transaction added to the ledger by the consensus of majority of miners. Mining carried out by the people because in return they receive newly created Bitcoins for their efforts.
Any transaction entered in Blockchain can never be modified or erased.
Introductory Steps On Blockchain – Why it is called Blockchain?
Earlier register being used for maintaining the accounting records. At the end of particular period or after a particular duration like at the end of day accountant used to check all records keep note of balances and sign at end of page. It means that transactions till that page are fixed and there is no space for making any new entry in the past.
Similar in the case of Bitcoin fixed period is there that is around 10 minutes. Miners collect all the Bitcoin transactions that executed in the last 10 minutes across the globe. They all record it together and known as block.
When compare to the physical ledger each page linked with the previous page along with the running totals. Similarly in case of Blockchain each block linked with the previous block creates the chain of blocks and therefore it called Blockchain.
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Introductory Steps On Blockchain – How Blockchain works ?
There is only one possible way to secure the ledger is to trust the central authority such as bank or the credit card company. Since Blockchain discovered with the capability to securely manage such ledger without interference of any central authority but with a democracy miners always win to do the right thing.
Therefore miners collect all transactions in Bitcoin network that carried out in last 10 minutes. After that miners enter into the competition and the miner who wins declared. The miner who wins is responsible for creating the new block with all new transactions. On the other hand all the miners update their file of Blockchain to this new version and then the competition begins all over again, there are two condition which decides the wining Miner.
Introductory Steps On Blockchain – Miner Selection Ways
First, the miner that has the most common version of Blockchain e.g. if in a case miner cheats and make entry of wrong Bitcoin transaction to give benefit to himself then that miner will have minority version of the Blockchain as no one else will contain that transaction in their verson. As a result of which he will lose.
Second, the first miner who will be able to solve the complex mathematical puzzle will win. Since solving of complex mathematical power depends on the luck as well as on one’s computing power.e.g in the lottery system the chances of win increases with the number of lottery tickets i.e. computing power.
The miner with 1 lottery ticket has comparatively less chance than the miner with 1000 lottery tickets(computing power).Since the miner that posses common version of Blockchain and who first solve the mathematical puzzle updates the chain and in return he get rewarded by the newly created Bitcoins.Recently this reward is 25 bitcoins in every 10 minutes. At today’s rate about 28,000 Rs per Bitcoin that is around 7 lacs.
Introductory Steps On Blockchain – Why financial institution moving towards it?
Before the existence of internet the voice calling between India and US was very expensive as it requires a multibillion dollar company like AT &T to lay its own cable between the two countries. With the internet several apps are available through which voice calling can done like Skype and so on. Not even voice call video calls are also possible and are free.
In the same way banks, credit card companies require to build an infrastructure that secure their ledgers. This infrastructure requires to created and managed by each company separately and since it is very expensive.
Similar to that of internet these companies are also provided with the option of recording their transactions on block chain at minimal cost. These transactions recorded for lifetime and there is nothing to worry about their security. Hence several billion of dollars can saved
Introductory Steps On Blockchain – Blockchain work without Bitcoin?
Blockchain powered by Bitcoin only works with the Bitcoin.Hence this is the biggest and most secure Blockchain in the world.
Bitcoin and Blockchain cannot talk separately. Miners that work for securing the Blockchain receives the incentives in the form of Bitcoins.
In order to increase the mining power the demand of Bitcoin and its price should subsequently increase in value over time therefore Bitcoin need to fulfil its potential as global currency.
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Author: Poonam Kaushal
A blogger and passionate writer who always try to introduce new concepts to readers.Involved in blogging since 2014 and believe in “No pain No gain” if you have to achieve something then you need to work hard.Working as freelance blogger in many companies and also managing her own blog that you all know savenlike.com.