What is Blockchain?
A blockchain is a decentralized, database or digital ledger that records transactions in a secure and transparent manner. It uses cryptography to create an immutable record of all transactions in the network, which are verified and validated by a network of computers or nodes.
Each block in the blockchain contains a set of transactions and a unique digital signature or “hash” that links it to the previous block in the chain. This creates a chain of blocks that cannot be altered or deleted without changing all subsequent blocks in the chain, making the blockchain resistant to tampering or manipulation.
Blockchains are commonly associated with cryptocurrencies like Bitcoin, but they have many other potential applications in fields such as finance, supply chain management, voting systems, and more.
How Does a Blockchain Work?
A blockchain is a type of database where information is entered and stored. The key difference between a traditional database and a blockchain is how the data is structured and accessed. A blockchain is distributed, meaning that multiple copies of the database are saved on many machines and they all must match to be valid. Transaction information is collected and entered into a block, which is then encrypted to create a hexadecimal number called a hash. The hash is entered into the following block and encrypted with the other information in that block, creating a chain of blocks that are linked together.
How Secure is A Blockchain Transaction?
Blockchain transactions are considered to be highly secure due to the technology’s use of cryptographic algorithms and decentralization. When a transaction is made on a blockchain, it is broadcasted to all the nodes (i.e., computers) in the network, and each node checks the transaction’s validity using a set of rules known as consensus algorithms.
In order to tamper with a transaction on the blockchain, an attacker would need to have control over more than 50% of the nodes in the network, which is known as a 51% attack. This is because the consensus algorithm relies on the majority of nodes agreeing on the validity of a transaction, making it difficult for a single attacker to manipulate the data without being noticed.
Additionally, each block in the blockchain contains a unique hash that is based on the transactions in the block, and changing a single transaction would require recalculating all the subsequent hashes in the chain. This makes it very difficult to alter any previous transaction records without being detected.
However, while blockchain technology is considered to be secure, it is not foolproof. There have been instances of successful attacks on certain blockchain networks in the past, and as with any technology, there is always the potential for vulnerabilities to be discovered and exploited.