As our world Is evolving towards the digital network, concern about the accuracy, security and modifiability of the digital record were raised. So far this third party centralised authority like banks were the only option availably to address this issues.
1992, Haber and stornetta worked on developing a technology that automatically ensured the accuracy and security of digital record using computers and mathematics.
They decided to employ the use of cryptology to achieve the desire level of privacy and security for digital record keeping.
Cryptography is the study of secure communication while cryptology is the term used when you study the application of mathematics to cryptography.
1992 Haber, Stornetta and Bayer enhanced their cryptographically based blockchain technology by adding the use of Hash Trees, which are also known as Merkle Trees.
It wasn’t until 2008 that the first distributed blockchain was created for use as underlying technology of bitcoin (digital currency) made by anonymous person called satoshi Nakamoto. The block chain facilitates the secure and private transfer of digital currency called bitcoin, as well as post the transaction to a public ledgers to maintain the data integrity. At the moment most transection are operate by third party financial institution likes banks, visa Etc.
The blockchain allows bitcoin currency transection to occurs securely and privately while maintaining the accuracy of the transection by posting time-stamped unmodifiable record of transaction to public ledger without the use of third party. Instead it uses computers, mathematical algorithms and cryptology to perform these functions which allows the direct connection between the bitcoin users by removing the need for third party.
Think list os transaction as a block and each block is being recorded on public ledger so as blocks of transaction are recorded on a ruling ledgers, it creates a chain of blocks.
Every transection between bitcoin users is processed by a computers that has a bitcoin processing software on it called bitcoin clients. This computer is connected to other computers via an online network.
So imagine the a computer with a bitcoin processing software own it connected to the internet which allows the computer to connect to a network of other computer online with bitcoin processing software. The technical term for each computer that participates in the blockchain network is the word “NODE”
So the blockchain networks has several NODE or computer that it saves all of the recorded block of transactions on. This is where distributed or decentralised ledgers comes from. Since every transaction is saved on every node or computer with bitcoin clients software on bitcoin network.
So If you have the laptop with bitcoin clients software and keep it connected to the internet and bitcoin network, you will have the entire bitcoin transaction ledgers on your computer. So if your computer breaks it will not affect the ledgers because the same ledgers is being distributed on several other computers around the world.
The network cannot be taken down at any specific Point. The blockchain process creates unique hashes for each transaction, as I mentioned before, that functions to make transaction secure and private. These hashes, as well as time stamps and other unique identifiers are created for each transaction and recorded on the public ledgers. So anyone can go and look at the bitcoin public ledger and see all of the transaction. E.g when you sent or receive bitcoin, you can identify your transaction by the unique hash that’s created . The address of the users it was sent to, which is a randomly generated set of numbers and letters or the IP address it was sent from.
Use of BlockChain :
2.validates and secure records
3.manages smart contracts
1.collection of records or transaction,
2.Linked with each other,
3.strongly resistant to alteration and
4.protected by using cryptography.