The things about great inventions are that we actually don’t know much the day they are invented but a couple of years down the line they would be evolved into something which is hard-wired in our world, electricity, machines, the internet is some of the examples. A few decades earlier internet was just a couple of computers or dozen of dots loosely coupled around the world but today we cannot imagine our life without the same.
Imagine a Blockchain as a vast global database spread out over millions of computers all over the world; it stores transactions of values (Money, Information or any Asset). Every invention has some purpose, a purpose to fill some Gap in the existing system, like printing press, filled the knowledge Gap, Engine had filled the Power Gap, Internet had filled up distance Gap & the blockchain fills-up the Gap of Trust, it changes the way we trust, not just the way we trust each other but more specifically the trust with entities like Private companies or Government Agencies. In order to transact with any Party, we must trust each other & blockchain provides the necessary tools & framework in order to establish trust with these transacting party.
Every Transaction in blockchain is stored in database called Ledger which is immutable, for example, while buying a property/house you would enquire in a government agency taking care of Property Titles but what if certain records like any property Violation is tampered & modified by fraud, thus you might end up paying a higher price for the house. The blockchain framework covers this Gap of Trust with its immutable & Cryptographic property of Trust with Verification. Every Blockchain record which goes into Ledger has a unique key (Let us keep aside the technical details of Cryptography & hash keys for the purpose of simplification) & every record is stamped by trusted party who wrote the record. Now during the writing of the next record, the previous key along with data of a current record is encrypted through a cryptographic formula, which is also written along with the current record. The Key in the Second record is dependent on first & the key in Third record is dependent on second & so on & thus essentially chaining all the records together & hence the word ‘chain’ in the “Blockchain” & in case if someone has modified a record in between then we can clearly identify and recognize the tampered record, the Ledger is immutable & you can mess with it but it is very easy to tell which records are tampered.
The below properties of Blockchain framework is used as a backbone for various Crypto Currencies like Bitcoin & Ethereum but such application is just a Tip of an Iceberg & there is much to it than we can even imagine.
Properties of Blockchain:
Examples of Usage of Blockchain: