The structure of Blockchain Technology and How it works.

By now, we should know that Blockchain Technology is going to make great impacts in nearly all industries in the future, and for good reasons– financial institutions  are finding very clever  means to start testing and investing  in this technology. Therefore, is it’s importance for us to understand the structure of blockchain and how it works.

The structure of blockchain data is a well-ordered, back-linked list of transaction blocks. The blockchain can be kept in a simple database, or as a flat file. The Bitcoin Core client keeps the blockchain metadata using LevelDB database of Google. Blocks are connected “back”, each referring to the preceding block in the chain. Normally, blockchain is visualized as a vertical stack that has blocks layered on  top of each other. The first stack serves as  the basis of the stack. The  conception of blocks stacked on each other  results in the use of the terms such as “tip” or “top” to refer to the most  newly added block , and “height” to refer to the  distance between the first block and other blocks.

 Every block within the blockchain is recognized  by  a harsh, created with the SHA256 cryptographic hash algorithm on the block header. Every block also references a  preceding block, referred  to as the parent  block. In other words, every block has  the hash of its parent in its own header. The series of hashes connecting  each block to its parent makes a chain  going back  to the first block,  referred to as the genesis block.

Although a block has  one parent, it can momentarily have many children. Each child refers  to the same  block  as its parents and has the same parent harsh. Many children appear when there is a blockchain “fork,” a short-term situation  that happens when different blocks are found  nearly concurrently by different miners. Ultimately, only s single child block becomes  the blockchain  part and the “fork” is resolved.

 The identity of the child changes if the identity of the parent changes. If the parent block is modified, the  parent’s hash changes. Consequently,  the parent’s altered hash compels a change in the “preceding block hash” pointer of the child. When the child’s hash changes, this, in turn, necessitates a modification in the pointer of the grandchild, which in turn alters the grandchild, and so on. The cascade effects make sure that once a block has  numerous generations, it cannot be tampered with without forcing a recalculation of  all successive blocks. Since  such recalculation would need enormous computation,  the presence of a long chain of blocks ensure that blockchain is immutable, a  feature  in bitcoin’s security.

 To understand the blockchain technology structure,  think about  layers in a geological formation. With seasons,  the surface layer might change. The surface layer can also be blown away before  it has time to settle. However, when you go  several inches deep,  the layers became  more and more stable. When you look  a hundred feet down,  you will see rocks that have remained undisturbed for centuries. In the same way, in blockchain, the recent blocks  might be  changed easily. But once you go  deep into the blockchain, blocks are less and less likely to change. Beyond  100 blocks, there is so much permanency. While the likelihood of any block being changed  always exists, the possibility of such an occurrence decreases as time passes until it becomes insignificant.

Well, this may sound too professional to you, but the short and simple fact is that the structure of a blockchain technology makes a block of data extremely difficult to remove or change. When someone wants to change it, the participants in the network, who have copies of the existing blockchain,  are able to evaluate and verify the proposed transaction. Hence, enable transparency and accuracy in transactions.

LEE GRANT: LEE GIBSON GRANT Lee co-founded Coinstructors, a Blockchain focussed Consultancy, in 2014 and the leading inspiration for “Drachmae” a project dedicated to finding a blockchain solution for Greece, a “Central bank in a Box”. Lee has been a successful entrepreneur in telecommunication and energy efficiency, taking new technologies into the marketplace and was one of the very first people to introduce LED technology at government levels with carbon credit backed projects. In Telecoms Lee has worked with MNO, MVNO and wholesale services. From his experience Lee then saw a natural fit in the Fintech space with Mobile Money harnessing Crypto Currency and Blockchain technology to create a new breed of Hybrid Mobile Money Services.
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