What is blockchain and why it is so much of hype?
What if I see the next big thing in the industry is blockchain, as Internet has affected all major industries in the same, the blockchain will also be affecting it. And that's why. Sure. Maybe next two years or three years or even five years, the blockchain will be there. But
>> what is blockchain and why it is so important.
Welcome back Aliens. And let's get started with blockchain if you have heard about bitcoins, you might have heard about blockchain as well. So they work on Bitcoin, They're started in 2008 by a pseudo name. What is pseudo? It baby of one week, maybe one plus like maybe a group of people. And The Pseudo name is Satoshi Nakamoto . So that person or you can just say that pseudo created bitcoins with blockchain.
So the technology behind bitcoins is block chain. But what exactly blockchain is? You know, if you talk about Bitcoin, it is basically a digital currency. Right. And it works on Peer-to-peer Network, which we can call it as distributed systems . So there's no central system example when you wanted to ask for money. Now you have a bank in between. But in Bitcoins, you don't have any central bank. Right. Everything is distributed.
So when you talk or distribute, there's one problem. The first problem is security. And the second problem is just trust how can you trust this technology and how much security? Now, there's one solution for security. We can use cryptography so we can we can use a concept of asymmetric of cryptography and we can achieve security. But how what trust how we trust someone that you are sending data to or you're sending money to help you trust the data?
Because I've been a bit on the Internet, because when you say on the Internet, if one person is transferring the money to other person who is maintaining the database, that's a big issue. Right, because let's see if I transfer all five Bitcoins to you, how can you be sure that you have five bitcoins? I have. And I don't have those five bitcoins which I've sent to you. Who is maintaining the system? So that's where. This ledger comes with the picture.
Now, what is that ledger? Will it be an online database? I'll think about it. What if what we can have a central database? Oh, that's a problem, though, because we are talking about distributed systems. Right. And and distributed why you need something in Central. OK, so that's one problem. So what if every node or what's node here? So let's see if there are five people working with bitcoins or if you have five people in this network, every machine will be called as node
So can you maintain the ledger on every machine? We can do that. But how can we trust that? Because there's one problem. If you have a ledger that anyone can tamper it with right. If you're getting confused with the ledger. Imagine a simple database or you can imagine a simple file Excel file or any file. let's Say It's a text file because if you have a text file and anyone can change the data right.
OK. Think about this. Let's say if we talk about government. OK, so let's say in government we have a corruption right. and everyone want to stop corruption. And the one way to do that is look at database. So what ever they worked on? Everything will be stored on database. Right. So what if we as normal people can see that database? We can do that, but then have the power to change database.
Right. They can change the history of that database. OK. So we want something where you should not be changed. So we want a Ledger, which will be available on every machine. But no one should be able to change it. And that's when blockchain comes into picture. So once you save data on block chain, no one can change it. And even if someone changes it, you will know that something has changed. But how? So let's try to understand this concept.
So what happens in blockchain ? We have list of blocks. OK, so let's start with one block. So if we talk about bitcoins in Bitcoins, we do a lot of transactions. All of this transaction would become one block. That's a bitcoin, right. Can we use this this concept anywhere else. Yes, we can. We can also use this data for your personal information. We can use this blog for the yard of your Facebook data.
We can store anything, literally anything on this block. But for Bitcoin to be stored transactions. Right. So far, different purpose. We can use this block. We can use this for bitcoins. We can use this for hospitals. We can use this for government information, everything that is stored inside this block. Okay, now. Now what I'm saying is you cannot change block but can be, you can change the block Right. Because if you have a block, anyone can change it.
But that's not how bitcoin works. So what bitcoins do is they use a concept of hashing what is hashing now. So hashing means we use different algorithms to generate a simple hash key. Now, it can be any algorithm we can use. We have empty five. We have SHA So we have different different length SHA. So what we can do is we can use this algorithm on a specific input. Let's say the input is.
My name is David Driti. So if this is the input, you can perform the operation, which will give you a key. Now, the awesome thing is it doesn't matter how big your input is. It can be a simple line, as my name is Levene's Joydeep, or it can be a entire Wikipedia database. If you pick wiki database And if you apply the algorithm, you will get a key lens which is different up on what you use.
Example, if you're using SHA 256 algorithm. You will be getting the same length. Give it just to have 256 bits. So even if I apply a. On the Saiteja, you will get the same length key, but the key will be different. OK, for every data you would be getting different keys. And that's the part of hashing, because if you perform with the hash on one input, it will give you the output, which is different from all different data.
So if you have two different data you can You will not be having same hash. Sometimes we do have it. And that's why we say hash collision. But thats A very rare case. So normally, if you apply hashing on different data, you will get different keys. But how that is useful. The important thing is if you have let's say if I would text me just my name is saiteja. And for that, if I'm getting this one key, if I change a even one letter in my name, for example, if I say my name is a saiteja, when I'm gone, I'm changing that.
I too double E normally if I do that for me, it will either to make a small change that it will affect your key as well. So even if you change something in that data, it will change the key as well. So you can imagine your key as your fingerprint. Right. Your data is yours. So you are data and this is your Hash key and the advantages. The moment you change something from that body or something from the data, it will affect the hash as well.
So how do we know if someone has tempered your data? But your data just take the key. Right. Because if key is different. Of course, there's been some some change in the hard data. But how that is useful in blockchain. So what we do is remember that block. So we have a block. So what we do is once you got this block here, you will apply hash. So let's say for block A, have a hash something, hash
And then let's say you have a next block. Now the next block will have the data, of course. Plus, it will also have a key. Of the previous block or the hash of the previous block. So let's say the block A. And then we have a key. That's a key one. Then the second block B will have key one. Which means if you'll find a key or the hash of this block. Now it's a combination of the data
And the previous key. So now you will get Key two. So for a we got key one for B we got key two and now let's we got 3rd block which is C you will have K3. Remember linked list. So we have A is. What we do is one node. So the second Nord knows about the previous node of previous node. Next knows about the next node. Right. So that's how we create chin. So what we have is we have a number of blocks and all of this blocks are connected with a chain.
And that's why we say this is called as basically a block chain, because we have a lot of blocks and that connected with the with the help of hash value. But you would say that's that simple. Right. But how can you make sure that there's a trust involved here? And no one can change it. Think about this. If you change data about if you change it, it's a block B.
The thing is, the moment you change one bit. OK. What if A small change in B? It will affect the key. Right. And in block C, if you have a key of B. And now when you compare the block of B and this block. And the key available in block B is different. That means someone has tampered with your data. Now you know that someone has done some changes. That's why we say blockchain is safe.
Now, you will be amazed to know that at this point, no one was able to crack the block in the database. Yes that's powerful. Yes, there are. There has been some hacking on bitcoins, but that's not on blockchain it was done on the wallet, not only block chain. So it is secure. It's safe. And you can trust it. Now it is only for Bitcoin.
Not exactly. You can use block chain everywhere. So any future for home hospitals plus entity bitcoins everywhere. You will be using block chain. And there are some banks in India as well. They have started using block chain. And most of the industries which I've talked to, they are doing B or C, which is proof of concept on block change. If it is just flexible for them to use block dodgem, they will be implementing it soon.
So that a lot of jobs are being built in blocks and for short in future. So if you want to learn something new now, start adoption.
Thank you for reading!
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