Have you heard of blockchain?
Let's start with Bitcoin.
Bitcoin is a cryptocurrency or digital asset that is secured by cryptography using Blockchain technology. It is a peer-to-peer payment system with no involvement of banks and/or financial institutions to facilitate any transactions.
P2P Networking & Distributed Consensus.
There are many different cryptocurrencies out on the market for different purposes. Bitcoin is one type of cryptocurrency that was first to appear and is most well-known. Bitcoin was thought to have been created to disrupt existing financial institutions after the 2008 financial crisis when people became increasingly wary of central banks and governments managing the economy.
So what is Blockchain?
Blockchain is the underlying technology of bitcoin which consists of a peer-to-peer network of distributed ledger and cryptography. The main value of blockchain technology is its distributed database system, which serves as an open electronic ledger to simplify business operations and to cut out the middleman for all parties.
Members of the network are known as nodes. Private key cryptography provides ownership authentication; possession of a private key is ownership.
Blockchain contains a set of records called blocks, added in linear and chronological order. Each block contains a header, a footer, and content.
Each block in the chain references the footer of the previous block and contains a set of new valid transactions that is immutable once added. The beginning block of the chain is the genesis block, which does not reference any parent block.
Block + Block.
Blocks are added through cryptogaphic hash functions. Hash is designed to be a one-way function that is almost impossible to invert. Each block in the chain references the hash of the previous block, such that making the slightest change to the input data changes its output drastically.
: Limitation of Bitcoin's Blockchain.
Current bitcoin-blockchain transactions are recorded once every 10 minutes, and the bitcoin network is able to process a maximum of seven transactions per second. The longer the blockchain, the more problematic the storage and synchronization of data becomes.