Blockchain technology was invented by Satoshi Nakamoto in 2008. At first, blockchain acts as open, distributed ledger that record all the transaction between two parties effectively. Besides, it is a type of peer-to-peer software technology that enable to protect the integrity of digital piece of information and shared among participation parties. The transaction inside the public ledger is verify by the consensus of many participants in the system. So, once the information or block is entered, it cannot be erased. The distributed consensus and anonymity are the two important features of blockchain technology. Furthermore, it was invented to create the currency Bitcoin or maybe used for other type of cryptocurrency, online signature services and other applications. The advantage of blockchain technology exceed the regulatory problem and technical assert. There also contain “Smart contracts” which are a computer program that will execute the phrase of the contract.
How does the blockchain technology work?
There are three main technologies which are combined to form the blockchain. The three technology are private key cryptography, P2P in the blockchain and program (blockchain’s protocol).
– Private key cryptography in the blockchain
Step 1: Let A and B as the users who want to interact with each other over the internet.
Step 2: Each of them holds two important keys, which is private key (pink) and public key (green).
The purpose of these key is to generate a secure digital identity reference. This identity is based on possession of combination of public and private cryptographic keys which will then create a “digital signature” that provides strong control of ownership. It is more safe and secure as the combination of these two keys are unique and no one will have the same signature. Normally, digital signature depend on two functions:
a. Sign (Message, Private key)-> Signature
This function provides a unique digital signature for the message.
b. Verify (Message, Public key, Signature) ->True/False
This purpose provide a binary output depending on whether the signature is authentic.
– Peer-to-peer network in the block chain
In P2P network, it contain a distributed network and system of record. For a distributed network, it is the larger the network, the more secure it becomes. It is because the block chain make use of mathematical verifications as there is the full validators (the camera in the analogy) in the bitcoin which will reach a consensus that they witnessed the same thing at the same time.
For system record, when cryptographic keys combined with the network, a useful form of digital transaction emerges. The process begin with user A use the private key to send a sum of cryptocurrency and attach with public key of user B.
– Program (Network servicing protocol)
A ‘block’ containing a digital signature, timestamp and relevant information that is broadcast through all the nodes in the network.
Mining in other word is to let the user computer to do all the things. By having block chain, offering your computer manage power to service the network, there will be a reward obtainable for one of the computers. The use’s self-seeking is being used to assist service for the public need. The objective of the protocol is to remove the chance for a bitcoin to be used more than once in the transaction at the same time with bitcoin to avoid fraud. To let this happen, the nodes in the network will track all the transaction and save them, maintain a history transaction by going to solve the proof of mathematical problems. The CPUs show their agreement about the new blocks or reject the invalid blocks. By adding blocks, it produce the blockchain which can contain data or messages. Example of blockchain:
https://www.coindesk.com/information/how-does-blockchain-technology-work/
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http://coinnoob.com/blockchain-technology-work Jun 5, 2017