Blockchain Technology In Simple Terms

What is Blockchain?

Blockchain is a decentralized data storage system. Records aren’t stored by one entity, like a bank, but can be stored by multiple people. What makes it unique is that. For example, a bank needs to protect its sources as much as possible because it knows how much each account in the bank has. Any tempering of the records can cause apocalypse. Of course, banks have really good systems to avoid this kind of tempering, but what is a security that is not needed at all?

Blockchain is about data chained to each other and to each other, confirming each other’s value. Each block added to the chain is verified before it is created, and then it is added. Once added to the chain, it can’t be removed. There are many sources that stream the latest state of the chain, and old versions of the chain are obsolete and invalid.

What is Crypto Mining?

Because the blockchain algorithm is about validating data rather than keeping it independent, it doesn’t require obsolescence, but instead we need as many people to see the chain as possible. Those who are responsible for validating new blocks added to the chain are called crypto miners. Increasing demand for a cryptocurrency requires more miners to work because the number of blocks to process increases. Crypto miners will need their machines to work for long periods of time, and electricity bills will be correspondingly high, so they need to be able to afford it and potentially profit from it. So the algorithm of the blockchain will also create blocks for crypto miners, which means they will generate their wealth.

What if an Invalid Block Gets Added to the Chain?

If any invalid block manages to be added to the chain, the whole chain will be invalidated from that point on. The chain before that block will still be valid, but people who added their data after that block will have their data turned into paperweights. In the case of a cryptocurrency, this means that if one day someone exploits the chain and adds an invalid block, it will be broken at that point. If something like that happens, the trust in the cryptocurrency drops seriously and many people can turn to alternatives or new methods to confirm the chain can be born. Everything exploited until today and fault is in nature of everything. At that time, OpenSSL, the encryption library used to communicate with the security of websites, was exploited and seriously used maliciously due to an exploit in its code. It allowed code execution on many web servers, which is a huge vulnerability. Now, I gave an example from software exploitation, but blockchain is related to cryptography algorithm exploitation, so it is different. However, even though the chain might be exploited one day, the focus should be on keeping it secure for as long as possible. That’s what security does, it doesn’t prevent, it delays for long periods of time.

Different Use Cases of Blockchain and Its Future

Blockchain can be used for many things. It has become popular and well known through the proliferation of cryptocurrency. But basically we have an algorithm of data confirmation and ownership. So instead of validating the coin blocks for example, the ownership of anything can be confirmed with blockchain. For example, contracts, images (NFTs), videos… Any textual data. However, there are limitations. The textual data stored in each block will be limited in size! That’s because the processing power needed to validate each block increases with the amount of data in each block. That’s one of the things that people working in blockchain technology are thinking about. For the future of blockchain, it’s imperative to have less processing required for each block. As the number of users of a chain increases and more people try to create a block at the same time, the processing power required to do so in a short period of time decreases. Therefore, contracts over blockchain are still in their mandatory form and are not really implemented. I wonder if we can have blockchain-based elections, for example. I think there is still a lot that can be done with a data confirmation algorithm.