Blockchain for Beginners: Understanding the Basics in Layman’s Terms

Over the past few decades, Blockchain has been the techy buzzword. Every Hollywood star was talking about NFTs, investing in Bitcoins, Crypto Wallets and so on. But what is all the buzz about? Are we missing out on something potential? Yes, Blockchain will revolutionize the whole world as the internet did. Basically, it is going to play a major role in Industry 4.0 (Fourth Industrial Revolution). But, everything about blockchain is more complex! Well, we have got you covered, here is a brief blog post and we are happy to break down what is blockchain in layman’s terms, easily understood by all.

Blockchain for Beginners

What is blockchain? The term “blockchain” comes from the way the information is stored. Instead of being stored in a single location or server (centralized), the data is divided into blocks and distributed across a network of computers, called Nodes. Each block contains a list of transactions or data, and it is linked to the previous block, forming a chain which makes blockchain.

Once a block is added to the chain, each block has a unique identity number (Hash) and will not be able to tamper with the information stored in it. If someone tries to alter the information in a block, the UIN will change, alerting the network to the tampering attempt and maintaining transparency. Even though a block is added, the same record cannot be altered in all the nodes, making it a failed attempt to tamper with the blockchain network. The blockchain is a public ledger, meaning that anyone can view the information stored. This helps to build trust and accountability, as all transactions can be traced and verified by anyone on the network online. 

Components of Blockchain

Each chain is based on three components: blocks, nodes, and miners. 

What is meant by Blocks? 

Clusters of data act as the chain’s links are called blocks, and include two important numbers called nonces and hashes. When a block is created, 32-bit Nonces whole numbers are generated, where hashes are 256-bit numbers linked to the nonce to identify the specific data – block’s data. Once the first block is created, its nonce generates a hash, at which point the block is considered signed and permanently bound to the nonce and hash. This makes the block’s data cryptographically secure. 

What are Nodes?

Nodes participate in a blockchain by using algorithms. When a new node joins a blockchain, it is given its own copy of the chain, and in order to make additions or changes to the chain as per approval in the blockchain network. For example, if an N1  node creates a new block B1, that B1 is sent to everyone on the network, and the other nodes confirm that the block is visible and hasn’t been tampered with, This communal term is called “consensus,” and blockchain is highly secured. 

Who are Miners?

Blockchain miners are responsible for “mining” the blockchain’s data, creating new blocks by means of consensus. Find the right nonce-hash combination in a single block, as each block has a unique identity number and when a change is finally executed and accepted by the network, the miner is rewarded financially. 

How data is stored on the blockchain?

Data can be stored in blockchain in a couple of methods,

• On-chain all the data is stored inside each block on the chain in an on-chain, if any missing /data loss/ attack happens, data can be restored and used.

• Off-chain doesn’t store the entire data, only stores metadata if any attack happens and can’t restore the data. 

For example, you are trying to store “MILTON” in the Blockchain 

✓ Computer 1 stores the letter “M”

✓ Computer 2 stores the letter “I”

✓ Computer 3 stores the letter “L”

✓ Computer 4 stores the letter “T”

✓ Computer 5 stores the letter “O”

✓ Computer 6 stores the letter “N”

Each letter in each computer will split into blocks, if someone tries to access the word “MILTON” without the authority of computers 1- 6 they will be not able to access it, if so they need access for all 6 computers, so basically blockchain build security, prevents from hacking from millions of systems. A blockchain is built to house important data in a highly secure, immutable manner. In the Ethereum blockchain, smart contracts have paved the way for the use of blockchain beyond digital currency. Smart Contracts are self-executing predefined codes that allow blockchain transactions to take place without third parties.

How to purchase/Invest in Blockchain?

Cryptocurrency is a digital currency designed to allow users to pay directly to each other (peer to peer) through an online system that is not dependent on any central authority, such as a government or bank, to uphold or maintain it. Bitcoin is a cryptocurrency. You create an account on the exchange, deposit your Bitcoin, set up a sell order, and once it’s filled, you can withdraw the cash to your bank account to know more on this you can check the “ Blog link “

Where can blockchain be used?

Blockchain can be used for a wide range of purposes, such as 

• Supply chain management: Track your products, creates transparency between sellers & buyers.

• Voting systems: Blockchain can be adopted in voting systems to prevent corruption, and provide digital identity verification and voting data accuracy. 

• Healthcare: Blockchain contributes to healthcare by reducing the paperwork of medical records, and pharma, delivering accuracy and maintaining transparency between patients as digital records are accessible.

• Education: Growth in technology regards education improvise with Digital signature in certifications.

• Banking and Finance: The Key Player of blockchain in banking and finance regards transaction history, funding, lending, and loaning, as it verifies documents via online sanctions the loans at easy steps. 

• Property:  Buy /sell/ resell /rent/ your property using cryptocurrency to purchase assets. 

Thus, Blockchain increases trust, security, transparency, and the traceability of data shared across a business network — and delivers cost savings with new efficiencies by removing the need for intermediaries and creating a decentralized system. Blockchain has the potential to revolutionize various industries. Looking for the future of your business to implement blockchain, contact BSEtec –A leading blockchain development company. Blockchain for business uses a shared and immutable ledger that can only be accessed by members with permission. Stay upgrading your business along with BSEtec, the Blockchain experts & know more about Blockchain.

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