This note is a part of my Zettelkasten. What is below might not be complete or accurate. It is also likely to change often.
23rd July, 2020

Blockchain

  • Originally the technology that powered Bitcoin
  • Now, Blockchain is an alias for a bunch of Distributed Ledger Technologies (DLTs) that can record and track any data of value.
  • It powers and inspired a number of currencies, databases, etc

How does it work?

  • Peer to peer Network
    • Each computer holds a copy of the entire transaction history for the network.
  • Data is saved in blocks
    • The first block is called genesis block.
    • Each block contains multiple packets of transactions
  • Each successive block is chained next to the previous block
    • Block(n+1) contains the hash of Block(n)
    • So blocks cannot be changed or removed once added to the chain since that would effect the hash of successive blocks
      • Corrections can only be made by adding using new blocks
    • Therefore, its a non-destructive way to store data
  • Proof of work is a mechanism which slows down the addition of blocks
    • Its a cryptographic puzzle that needs to be solved to create a block.
    • It supposed to take 10 minutes to solve.
    • So, to tamper an old block, the tamperer would have to recalculate the proof of work on every subsequent block from that one to the latest.
  • There is no central entity - blockchain is a distributed peer-to-peer network where data is stored on many nodes
    • When someone creates a new block, its sent to everyone on the network for verification and storage
    • Once each node verifies the proof-of-work and has on the new block, the new block is added to their blockchain
    • Consensus is created when a simple majority of nodes accept the new block.