Blockchain: A group of technologies

Cryptographic Algorithms:

Blockchains are secured with strong state-of-the-art cryptographic mechanisms. Everything stored on the Blockchain is encrypted.

To give you a better idea of how it is used in Blockchain, let’s get back to our previously discussed example where Kevin transfers 5 BTC to James. This transaction goes into the network in the form of an encrypted message. This message is unique is for every transaction.

Now, you would ask what makes the message unique? It is because the transaction is signed by the senders unique key called a private key, hence the digital signature. The mechanism looks something like this:

Miners verify this digital signature for validating a transaction in the network.

Cool.Isn’t it? Let me tell you some more fascinating stuff. Ever seen these numbers before: 09bed8e02e49277378f256c9d93ba4e408771088483f3955c6b1186ac8c7630a. Looks gibberish right? Well, it’s called Secure Hashing Algorithm (SHA-256).

The function is so powerful that if you pass anything through this algorithm, it gives you a digital fingerprint of that input. Even if a single space is altered, the fingerprint changes completely.

Wondering how is it used in Blockchain? Remember I told you that blocks are back linked to each other in Blockchain. Well, there you go. If you do the hashing of a bunch of transactions i.e. give that whole ‘block’ of transactions a unique fingerprint!That is it.

Now, your next block of transactions has the new transactions — plus that hash from the previous block.

And this is how the blockchain system is made cryptographically secure.

Distributed Network:

Blockchain uses distributed network where two or more nodes work with each other in a coordinated fashion in order to achieve a common outcome.X All users on the Blockchain are nodes (or peers) who maintain their own ledger.

Program(Blockchain Protocol):

Blockchain uses network servicing protocol for smooth and secure running of the system. The nodes serve the network by maintaining a record of transactions. The verification process can be customized for each blockchain. Basically, it is the consensus mechanism that governs the network of Blockchain. Example Proof-of-work in Bitcoin Blockchain.

Blockchain