Blockchain is the buzzing word in current world. Blockchain is a decentralized database. In the word blockchain block is the ledger or data what we want to store in it. And chain is the connection with two different blocks. Now if we imagine a goods train where every bogie stored with some goods and they are bind with each other with a coupling. Here bogie is block and coupling is the chain. Now the question is what is decentralized database? Imagine a library management system where all details are saved in a single server and we are accessing the data from that particular server. If any changes required in this system, we need to change in this particular system only. So, we call it centralized database. But in decentralized database the data will not store in a particular server rather it is stored in every node who are using this system. So, if we make any changes in data it will updated and visible for all users. It is very clear now that decentralization make Blockchain so transparent. But other than decentralization Blockchain has some other features that make it so popular and useful. Before going deep into it let us see how blockchain works.
Mr. A has Rs.500 and he want to pay Rs.300 to Mr. B. In our current scenario there are banks who make this transaction and updates the data in their server. So, after this transaction the new balance of Mr. A is Rs.200/- and Mr. B is 300/- but it is stored in central database of bank. If Mr. A or Mr. B want to know their balance they have to get their data from bank’s server. But in blockchain technology Mr. A and Mr. B both have their own ledger in their node with transaction details. So, they don’t need to be dependent on bank’s database to check their transactions. These ledgers are blocks and each ledger is interconnected with a common key, here we say chain.
Till now we were discussing about the transaction entry into ledger. But in blockchain another property also executes when one transaction occurs. And that is called validation of transaction. If transaction is not validated then it will not enter into ledger. The process of validation we will discuss in another blog. But here we will give you brief idea of validation of transaction. In our above example Mr. A has given Rs.300 to Mr. B. Now if Mr. A want to pay Rs.400 to Mr. C simultaneously then our validation of transaction will stop the transaction because Mr. A does not have enough money to spend and the same will not update in the ledger of Mr. A and Mr. C. So double spending or duplicate spending is not possible in blockchain technology.
In blockchain if one transaction or entry has happened then there is no way to change. So, we call blockchain immutable. Blockchain is transparent because the data is not kept with a single server rather it is distributed in different computers who are involved in same transaction. It is temper proof because if you want to change data unauthorizedly in a ledger, validation will stop you to do so. So blockchain is highly secured and transparent technology what our world needs now.