The term ‘blockchain’ came to the market in 2008, when the first cryptocurrency Bitcoin was launched.
Blockchain is a new way to secure data and create transactions. It is a distributed database or ledger system. The blockchain was first defined in the original source code for Bitcoin. Blockchain removes the deadlock occurring between different parties.
The traditional way of sharing document with collaboration is to send a word document to other recipient and ask them to provide a revision of the document.Here the problem occurs that you can’t do anything with the document until the other person is done with it. Traditional databases are also working in this way.
That’s how banks maintain money balances and transfers: they briefly lock access (or decrease the balance) while they make a transfer, then update the other side, then re-open access (or update again).
Two parties can’t be messing with the same record at once.
If you use Google Docs,multiple parties can access the same document at the same time and all changes are visible to all users. The distribution concept plays an important role in the form of Google Docs.
One of the key features of the blockchain is that it is a distributed database. There is not a single centralised system in blockchain, but rather the blockchain database exists across a distributed network of machines, each acting as a node on that network.
It’s a hard task for hacker to hack a system based on blockchain. If a hacker wants to hack the system, he will not have to hack a single centralised system – he will have to hack all the nodes.
A computer containing a block of data that is identical to other blocks in the network is known as node of a network. Node automatically imports block data, once connected to network and is responsible for validating and relaying transactions.
These nodes are used for the mining purpose, from where a user can earn money by mining the database or ledger.
Stay tuned for Bitcoin and Bitcoin Mining.