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Everyone talks about it everywhere, on TV, in the press, in movies, BLOCKCHAIN attire everyone, yet many people still find it difficult to understand what is really BLOCKCHAIN, So, we do a lot of research, but we find a lot of different stuff: cryptocurrency, BITCOIN, without really knowing the difference between all that.
That's good because, at the end of this article, I guarantee you will have understood BLOCKCHAIN
For what BLOCKCHAIN was born
and yes, that's where you have to start, if you want to understand how it works BLOCKCHAIN, we must already understand why it was created.
Starting from a simple example, let's imagine that a gentleman wishes to send a thousand dollars to Madame, unfortunately, he cannot send her the money directly, he is obliged to have a bank account, to place a transfer order, the bank then verifies that the funds exist and carries out the transaction to the account of madam and the bank then has the role of intermediary, it is what is called a trusted third party, that is to say, a natural or legal person who is authorized to carry out transmission and storage operations.
Roughly speaking, here, it is quite simply a legal entity that is authorized to receive funds and send them there.
The problem with this traditional system is then that you have to have a bank account that has gone through a bank to be able to send a transfer, that's why BLOCKCHAIN has been created.
The goal of BLOCKCHAIN and to be able to circumvent this traditional system and be able to carry out transactions of all types without going through an intermediary then you will say ok, but how can we send money if we do not have a bank account?
Quite simply via A “WALLET” it is a wallet that can be bought and that belongs to you.
No one has control of it except yourself and you can very well, from this WALL ET, either send money or receive it and there, you will say to yourself, but wait for that, we can already do it with PayPal.
No, because PayPal is a payment service provider, roughly speaking PayPal is a trusted third party, it may seem that when you send someone money via PayPal, you send them money directly, but not at all when you send money.
PayPal will verify that the funds exist before they can send them and again you have to have a PayPal account to be able to send money through PayPal therefore PayPal can do a lot of things with your account, they can very well consult it, check the available balance, even close it so there is a third party involved in the transaction even if you have the impression of sending money directly to someone.
Who created BLOCKCHAIN
The very principle of blockchain was born in 1995, but its real designer is Satoshi Nakamoto, the one who is wrongly described as the creator of BITCOIN when he did not create it, he just improved something that already existed.
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Nakamoto is a person whose identity remains unknown. today, his name is in fact a pseudonym, if he is not really the inventor of BITCOIN, it is these works on BITCOIN that allowed him to give a computer reality to the BLOCKCHAIN which until then had been a concept without concrete character.
What does it look like BLOCKCHAIN?
BLOCKCHAIN is a ledger like in accounting in which all transactions carried out on a network are written and recorded.
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In fact, it's a huge public database, although this database is public, all transactions are anonymized so you can't know who performs which transaction, you can just know the nature of the transaction and there, you're going to say ok, everyone tells us that it's a book on which we see the transactions, but nobody ever shows anything, everyone talks about it, but nobody shows us concretely what it looks like and especially how we do it access and there if you ask this question, you are totally right.
I will show you concretely what it looks like in Berkeley, the first thing to do is to go to the sitehttp://blochain.com/explorer, At the middle of the page, we can see the last blocks and the last transactions knowing that the block groups together several transactions, but that we will see later.
As a result, we can have several pieces of information, in particular when the block was mined by whom it was mined, and the size of this block.
If we click on see all the blocks, we see that we have a list of all the last blocks that have been mined, we will also have has” HASH” function.
The function” HASH” in fact is the identity card of the block, this is what makes it possible to recognize a block, if we click on it, we will have a lot of information, for example, if we scroll down, we can see the transactions that are contained in this block, so here in particular, we see that there are transactions that have been made and these are transactions in BITCOIN.
In short, if you are curious, I leave you the link in the descriptions, it will allow you to do your own research, search the site by yourself, and really see what it looks like.
How BLOCKCHAIN works
the easiest way is to go through an example: imagine that x wants to send a BITCOIN:
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first step :
the transaction will be recorded in the transaction register of BLOCKCHAIN.
second step :
the transaction will be added to a list of related or similar transactions and its transactions will be grouped into a single block, this block will be characterized by a “HASH” which is a sequence of characters that represents in some way the identity card of the block.
Each block has a” HASH” which is specific to him.
Third step :
The transaction will be verified or validated by the users of BLOCKCHAIN.
Its users are called nodes or miners, so how do they verify the transaction?
First of all :
it looks at the nature of the transaction so in this case, “X” sends bitcoin to” Y” so they make sure that is what was created in the ledger.
Second:
They check the “HASH” of the block via a public key that they hold, be careful when we talk about minors, we are not talking about people who stay all day in front of their pc to validate transactions, fortunately, that's not how it happens in fact, to validate a transaction, a miner simply launches a program that will do it automatically.
The miners, therefore, agree to allocate the power of their computer to the service of verifying transactions and they are therefore remunerated for that.
To be able to be paid, the minor must therefore prove that he has resolved a transaction, this is called the “proof of work” so when we talk about a person who mines BITCOIN it is simply a person who verifies and validates transactions to be paid in return for this work.
Fourth and final step:
Once the transaction is validated, the block is timestamped and added to the already existing block, which will then form a chain of blocks, hence the name BLOCKCHAIN.
The transaction then becomes visible to everyone, but can no longer be modified.
The difference between BLOCKCHAIN and BITCOIN
.webp "The difference between BLOCKCHAIN and BITCOIN")
However, there is a big difference; BLOCKCHAIN is a computer network, it is, therefore, a technology that aims to avoid the use of a third party to carry out transactions, and BITCOIN is a crypt currency, that is to say, a decentralized currency.
BITCOIN needs BLOCKCHAIN to exist since it is a decentralized currency, but BLOCKCHAIN can very well exist without BITCOIN.
There are also other BLOCKCHAIN than those based on BITCOIN
What could be used BLOCKCHAIN
so there, we are not going to make a list of all the possible applications of BLOCKCHAIN, car firstly, it's useless and secondly, the internet is full of articles about it.
In fact, we can sum it all up very simply: the BLOCKCHAIN is useful in all transactions between two or more people, and when we want this transaction to be secure and anonymized, it can very well be sending money, sending a contract or any other property that can be the subject of a transaction.
If you understand that, then you know that BLOCKCHAIN has a considerable future in several areas; finance, real estate, and IT. In short, we are still at the very beginning of the application of the BLOCKCHAIN, more, it will really revolutionize the world in a few years.
With that, we come to the end of this article, I hope it was useful to you and that it allowed you to understand what was BLOCKCHAIN and how it works, if so as usual don't hesitate to leave a little thumbs up a little comment it's always a pleasure and it helps a lot of courses for SEO.
On this, we say see you soon for a next article
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