What is Blockchain?
What is Blockchain?
Blockchain is a distributed ledgers that can mathematically guarantee the consistency of data without a third party and cannot be forged or altered. It consists of distributed database technology, and makes decisions based on consensus algorithms using multiple participant votes. In addition, blocks composed of hash values are chained together, making it almost impossible to forge or falsify data.
Key features of a Blockchain
Decentralization
As a basic characteristic of blockchain, there is no centralized group and there is no 'third-party trust agency'.
Blockchain does not have a central administrator because it stores and attests data by many participants.
Transactions between individuals are possible through an electronic contract called 'Smart Contract' instead of a central administrator.
Expandability
Opened sources allow any network participant to build, connect, or expand.
It is easy to expand between systems that require data sharing through the network, and you can also consider expanding to existing systems through APIs.
Transparency
All transaction records linked to the blockchain are publicly accessible.
All transactions bring out into the open and It is possible to reduce security, supervision, and regulatory costs.
Integrity
Once the data is embedded in a block and connected to a chain, it is virtually impossible to change the data.
This is because the blocks connected to the blockchain have a specific relationship with the previous block cryptographically, so you have to change all the blocks before the block you want to change.
Key elements of a Blockchain
Distributed ledger technology
A distributed ledger is a database in which all the transactions that occurs in a blockchain is shared and stored. In the existing database, data could be registered, modified, and deleted, but once recorded transactions cannot be deleted in the blockchain.
Smart Contracts
Smart Contract is a technology that allows contracts to be made only by code without a third party agency. In the existing Bitcoin, it only operated with UTXO (Unspent Transaction Outputs), so it was only possible to make simple transactions, but it was not possible to make a contract. However, with the advent of smart contracts, the blockchain ecosystem could be expanded as various codes were created based on contracts as well as transactions.
PKI
Public Key Infrastructure (PKI) is usually considered a high-level identity authentication system. However, the centralized nature of the Certificate Authority often leads to problems with data ownership and reliability. As a result, many people have no choice but to trust the certification authority.
No certification authority exists in the blockchain. The private key is kept by the user and the public key is stored in the blockchain to sign with the private key owned by the user when trading, and the blockchain determines whether the signature is valid.
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