hat is Blockchain?
A Blockchain is a diary that is almost impossible to forge.
Hash function
Let's imagine that 10 people in one room decided to make a separate currency. They have to follow the flow of funds, and one person – let's call him Bob – decided to keep a list of all actions in a diary:
A hash is a string of numbers and letters, produced by hash functions. A hash function is a mathematical function that takes a variable number of characters and converts it into a string with a fixed number of characters. Even a small change in a string creates a completely new hash.
After each record, he inserted a hash. The new diary was as follows:
Nodes
Later, Bob realized that there were too many records and that he couldn’t keep the diary like this forever. So when he wrote 5,000 transactions, he converted them to a one page spreadsheet. Mary checked that all transactions were right.
Bob spread his spreadsheet diary over 5,000 computers, which were all over the world. These computers are called nodes. Every time a transaction occurs it has to be approved by the nodes, each of whom checks its validity. Once every node has checked a transaction there is a sort of electronic vote, as some nodes may think the transaction is valid and others think it is a fraud.
The nodes referred to above are computers. Each node has a copy of the digital ledger or Blockchain. Each node checks the validity of each transaction. If a majority of nodes say that a transaction is valid then it is written into a block.
Now, if Jack change one entry, all the other computers will have the original hash. They would not allow the change to occur.
Block
This one spreadsheet is called a block .The whole family of blocks is the Blockchain. Every node has a copy of the Blockchain. Once a block reaches a certain number of approved transactions then a new block is formed.
The Blockchain updates itself every ten minutes. It does so automatically. No master or central computer instructs the computers to do this.
As soon as the spreadsheet or ledger or registry is updated, it can no longer be changed. Thus, it’s impossible to forge it. You can only add new entries to it. The registry is updated on all computers on the network at the same time.
Important points:
A Blockchain is a type of diary or spreadsheet containing information about transactions.
Each transaction generates a hash.
A hash is a string of numbers and letters.
Transactions are entered in the order in which they occurred. Order is very important.