It’s already August! Where did the 7 months go? It flew by so fast! Anyway, we feel like with the pandemic, more and more people are hearing and interested to learn and understand what is blockchain. Often, when people discuss blockchain, they think you want to know about bitcoin. Unfortunately, that is not the case, as blockchain is not bitcoin and vice versa.
If you are a beginner to blockchain, let’s go through some of its frequently asked questions, we’ll make this a series, so follow our page to know more.
What is blockchain?
Firstly, you need to understand that blockchain is a technology. It is a distributed ledger, which stores details in the form of immutable records or non-modifiable records which are secured using cryptography.
Let’s give you a situation, for example, consider a blockchain as a folder of digital work reports. Each block contains details of date and time of work done by an employee at any time and from anywhere, the employer owns a private password (or commonly known as key in blockchain) to record the tasks for his employee, while the employee owns a public password to access and view the tasks given. These digital work reports are non-modifiable by either of the employees or employer.
This situation demonstrates how blockchain ensures the highest level of records verifications as it is non-modifiable, it cannot be altered or falsified and it is very secure, only they holder of the private and public keys can access to these records.
What are blocks and how can you identify them?
A block is like a record of the transaction. Each time a block is verified, it gets recorded in chronological order in the main blockchain. Once the data is recorded, it cannot be modified.
Consider a block as the digital work report while a blockchain as a folder for all the employees’ digital work reports, from this you’ll understand that blockchain is a database of records.
What are public and private keys?
Cryptography is a method of protecting information and communications through the use of codes, to ensure that only the individuals for whom the transaction or data is intended can obtain, read and process the transaction or data and verify the authenticity of participants and the transaction.
Cryptography uses public and private keys in order to encrypt and decrypt data. In the blockchain, a public key can be shared with all the users but a private key is kept secret with the users.
In blockchain, public and private keys, which is a part of the Public Key Cryptography (PKC) framework allow you to send and receive cryptocurrency without requiring a third party to verify the transactions. You can use these keys to send your cryptocurrency to anyone, anywhere, at any time. Remember that the public and private keys fit together as a key pair.
While anyone can send transactions to the public key, you’d need the private key to unlock and access to the transacted assets. While your public keys can be shared in order to receive transactions, your private keys must be kept secret as it provides you with the ability to prove ownership or spend the funds associated with your public address. If anyone has access to the private key, they will also have access to any cryptocurrency associated with those keys. So, at any time or anywhere, NEVER share your private key with anyone.
For this first series, we can conclude that blockchain is not just a database of digital records. All blockchains are databases but not all databases are blockchains. Data on blockchain is structured into blocks that are chained together (block + chain, shocking?) Due to this structure, when a block is filled, it is no longer modifiable and becomes a part of the chain. Each block in the chain is given an exact timestamp when it is added to the chain. Every transaction is authorized by the public and private key of the owner, which authenticates the transaction and safeguards it from tampering.
So when people say blockchain is secure, it is in fact very secure. We shall see you in the next series where we try to answer your FAQs on blockchain, stay tuned!