What is Blockchain?

Blockchain is a technology type, with its main purpose being essentially a proof of transaction or data and a trustless system, enabling many forms of trading, from currency through to digital representations of assets, such as property or legal documents.

Blockchain was described in 1991 by Stuart Haber and W. Scott Stornetta with the bases of the tech using DLT (Distrubuted Ledger Technology) & the idea of seamlessly implementing secure technology to remove the need of middlemen or parties which can essentially cause volatility, insecurity or instability of your digital property. This ensures that you are the one in control of what is your digital property and through a secure system as blockchain & once uploaded and mined (added to the blockchain) it is secured and cannot be tampered with.  This way we could prove that party A owns the property and party B receiving the property and for example, wouldn’t have to pass this by his/her attorney in order to check that a deed is legitimate, in order to secure that they will in fact receive what they are bartering for.

How Blockchain Works?

Step 1: Transaction

Party A & Party B have decided they will exchange a digital asset, such as currency or deeds to a property, a birth certificate. They then initiate the transaction.

Step 2: Block

The transaction is packaged with other pending transactions thereby creating a “block”. The block is sent to the blockchain system’s network or participating computers.

Step 3: Verification

The participating computers (called “miners” in the bitcoin Blockchain) evaluate the transactions and through mathematical calculations determine whether they are valid, based on agreed-upon rules. When “consensus” has been achieved, typically among 51% of participating computers, the transactions are considered verified.

Step 4: Hash

Each verified block of transactions is time-stamped with a cryptographic hash.

Each block also contains a nonce & reference to the previous block’s hash, thus creating a “chain” of records that cannot be falsified except by convincing participating computers that the tampered data in one block and in all prior blocks is true. Such a feat is considered impossible.

Step 5: Execution

The unit of value moves from the account of party A to the account of party B.