Preface
More and more people today are trying to get as much information as possible about blockchain technology. Of course, the main reason for such increased interest is cryptocurrencies and, first of all, Bitcoin. However, blockchain technology itself is extremely versatile and has significant potential even beyond cryptocurrencies. First of all, the popularity of blockchain is due to the fact that this technology allows us to collect and protect any type of data from any decentralized network. Since there are a large number of different types of data, they depend directly on the type of blockchain. For example, in the case of cryptocurrency, all information related to transactions will be collected and stored on the blockchain: senders and recipients of the cryptocurrency, as well as the number of coins themselves. For projects not related to cryptocurrency, the type of data recorded in the blockchain will change.
Having made sure that the blockchain is a virtual decentralized peer-to-peer data registry, it is necessary to clarify how this registry is managed. In this case, we state that the entire process of storing and handling digital data is impossible without the appropriate blockchain infrastructure.
Hashing concept
The basic idea of blockchain technology is to use cryptography and complex computer algorithms to create a secure and transparent method that cuts out intermediaries and allows data to be stored and verified on a huge open network of servers. One of the first and most basic concepts in blockchain is the concept of hashing. And, of course, we should clarify what a function such as a hash is. A hash is a function that converts input data arrays of arbitrary length into an output bit string of a specified length. The implementation of this function is carried out using a certain algorithm, and the conversion process itself is called hashing. Hashing in the process of its implementation has two main goals:
– provide data integrity check, accept data input of any length and output a result of a fixed length;
– irreversibly modify data such that the input cannot be derived from the output.
If we carefully study the contents of any block of the entire chain of blocks, we can see that it consists of the following elements or functions:
1. Some data intended for storage: As mentioned above, the data stored depends on the type of blockchain.
2. Own hash of the block: The main task of the hash is to identify both the block itself and all its contents. Figuratively speaking, a hash is an element that is akin to a person’s fingerprint. At the same time, the hash, just like a fingerprint, will always be unique. As soon as a new block is created, it is assigned its unique hash. If anything is changed inside the block, this will cause the hash to change. Based on this, one can judge the exceptional usefulness of the hash since its presence makes it possible to detect even the most insignificant change in a block. In other words, when a hash change is detected, it can be unequivocally stated that the block itself is no longer the same block that was created earlier.
3. The hash of the previous block: This hash is needed in order to ensure traceability of the actions (transactions) performed throughout the entire blockchain. The very first block of the chain that does not contain the hash of the previous block is called the genesis block.
Proof of work mechanism
As we can see, the hashing process is designed quite rationally, but the question arises: is using only the hash function a guarantee to ensure the security of the blockchain and prevent fraud? The fact is that nowadays, computers have so much power that they can calculate hundreds of hashes per second. This can lead to a change in any block and a further recalculation of all blocks in order to give the entire blockchain a new status of reality and make the fact of falsification invisible. In order to avoid such a scenario, a mechanism such as proof of work was invented in the blockchain. The essence of this mechanism is that it significantly slows down the creation of new blocks. Using Bitcoin as an example, we can see that it takes at least 10 minutes to calculate the required proof of work before adding a new block to the chain. Thanks to this mechanism, the likelihood of falsification is significantly reduced because when changing one block, it is very difficult to recalculate the proof of work for each block of the chain.
Conclusion
Thus, the security of the blockchain is ensured, first of all, by a combination of two mechanisms – hashing and proof of work. And the decentralized approach enhances this security. The essence of this approach is that the blockchain uses a peer-to-peer network that is accessible to everyone. In other words, each network node has a complete copy of both the blockchain itself and the next newly created block. Blocks are checked for validity by nodes, which leads to consensus between them. If any of the blocks is falsified by one node, it will be rejected by the rest of the network nodes. To make the falsification real, it is necessary to repeat the proof of work for all changed and for all subsequent blocks and, taking control of more than 50% of the peer-to-peer blockchain network, establish consensus, which is almost impossible.
