Written by: Khairul Haqeem, Journalist, AOPG.
Despite initial scepticism, blockchain has emerged as the leading candidate for the mechanism or ecosystem that will fuel the Internet of the Future (web 3.0). However, most people don’t care too much about the internal dynamics of blockchain or the rationale for our adoption of the technology.
With blockchain, data is recorded in a way that prevents or greatly complicates tampering, hacking, or manipulation. A blockchain is a distributed ledger that stores a copy of every transaction data on each node in the network.
Blocks of public transaction records (thus the name “blockchain”) are stored in many databases (hence “chain”) in a distributed, peer-to-peer network. A “digital ledger” is the term commonly used to describe this type of database.
Behind The Scenes of Blockchains
In proof-of-work blockchains, there are three fundamental components: blocks, nodes, and miners.
Blocks
Each link in a chain is made up of smaller building pieces, each of which is composed of three primary parts:
- The information included within the block.
- The nonce, or “number used just once.” To produce a block header hash, blockchains generate a nonce, which is a random whole integer.
- The hash, or nonce hash, is a unique integer that is always appended to the nonce in blockchain technology. These numbers must begin with a very large number of zeroes for use in cryptocurrency hashes (i.e., be extremely small).
The initial cryptographic hash in a chain is generated by a nonce at the creation of the first block in the chain. Until the block is mined, the data within it is regarded signed and inextricably linked to the nonce and hash.
Nodes
Decentralization is a core concept in blockchain technology. The chain cannot be controlled by any one machine or group of individuals. Instead, it operates as a decentralised ledger that can be accessed by all of the nodes that are part of the chain. Each node in a blockchain network is responsible for keeping a copy of the chain and ensuring the network remains operational.
Each node stores its own copy of the blockchain, and for the entire chain to be updated, trusted, and confirmed, it must first get algorithmic approval from the rest of the network. Because all transactions in a blockchain are publicly recorded, the system is inherently secure. A participant’s activity may be tracked by using an individual identification number that is a combination of letters and numbers.
Miners
The term “mining” refers to the method through which new blocks are added to the chain.
Mining a block is difficult on a blockchain since each block has its own nonce and hash and also references the hash of the preceding block in the chain. This is especially true for big chains.
To determine a nonce that results in a valid hash, miners utilise specialised software to tackle an extremely difficult arithmetic problem. With just 32 bits for the nonce and 256 for the hash, there are approximately four billion potential nonce-hash combinations to mine through until the correct one is identified. When this occurs, miners have identified the “golden nonce,” and their block is added to the growing list of blocks in the blockchain.
If a modification is made to a block in the chain’s history, it must be mined again, along with every block that follows it. Because of this, tampering with blockchain technology is incredibly challenging. Since obtaining golden nonces demands so much time and processing effort, this might be thought of as “safety in arithmetic.”
All network nodes validate the mined block and pay the miner a reward when this occurs.
Blockchain is Paving the Road to Digital Utopia
Career opportunities in this sector are expanding rapidly, despite the fact that we just scratched the surface of the industry-wide potential of blockchain applications in this article. Any successful entrepreneur knows that staying one step ahead of the competition is fundamental.
Stay tuned for my upcoming post to learn much more about blockchain technology!
