Blockchain, sometimes referred to as Distributed Ledger Technology (DLT), is the underpinning technology that makes cryptocurrency possible. Blockchains ensure that the history of any digital asset is unalterable and entirely transparent through the use of decentralization and cryptographic hashing.
A very common analogy for understanding blockchain is that of a Google Doc. When you create a Google Doc and share it with a group, the document is distributed instead of copied or transferred. This has created a decentralized distribution chain that gives everyone access to the document at the same time. Nobody is locked out, and modifications are recorded in real-time, making all interactions completely transparent.
This is a simple analogy, but it highlights four critical ideas behind blockchain:
- A blockchain is a database which stores encrypted blocks of data, and chains them together to form a chronological record for the data.
- Digitel assets are distrubuted, not copied. These are immutable records of an asset.
- The asset is decentralized, allowing full real-time access and transparency to the public
- A transparent ledger of changes preserves the integrity of the document while creating trust.
Blockchain is a revolutionary technology that has a wide range of uses because it reduces risk, stamps out fraud, and brings transparency in a scalable way.
There are 3 key concepts within blockchain: Blocks, Miners, and Nodes.
Every chain consists of multiple blocks, with each block having three basic elements:
- The data in the block.
- A 32-bit whole number called a nonce. The nonce is randomly generated when a block is created, which then generates a block header hash.
- The hash is a 256-bit number wedded to the nonce. It must start with a huge number of zeroes (i.e., be extremely small)
When the first block of a chain is created, a nonce generates the cryptographic hash. The data in the block is considered signed and forever tied to the nonce and hash unless it is mined.
Miners create new blocks on the chain via mining. Every block in the blockchain has its own unique nonce and hash, but also references the previous hash. This means the mining becomes progressively more difficult.
The mining is performed by solving extremely complex mathematical problems. The solution will find a nonce that generates an accepted hash.
Making a change to any block earlier in the chain requires re-mining not just the block with the change, but all of the blocks that come after. This is why it’s extremely difficult to manipulate blockchain technology. Think of it as “safety in math” since finding golden nonces requires an enormous amount of time and computing power.
While the software used in mining is complex, the hardware is top-notch. Usually, graphics cards are used for this purpose because they effectively function as high-powered calculators. This has led to the price of graphics cards, ordinarily used by gamers, skyrocketing in the last decade.
Nodes can be any electronic device that contains copies of the blockchain and keeps the network functioning. Because there are so many, no one device or organization can own the chain.
Every node has its own copy of the blockchain and the network must algorithmically approve any newly mined block for the chain to be updated, trusted and verified. Since blockchains are transparent, every action in the ledger can be easily checked and viewed. Each participant is given a unique alphanumeric identification number that shows their transactions.
Uses For Blockchain
There are many uses for blockchain, but its best known is cryptocurrency. Blockchains security makes thefty much more difficult, as each cryptocurrency has its own irrefutable identifiable number that is attached to one owner.
With blockchain, cryptocurrency can be sent globally without the need for a third part and without interference from central banks.
Blockchain has a nearly endless amount of applications across almost every industry. The ledger technology can be applied to track fraud in finance, securely share patient medical records between healthcare professionals and even acts as a better way to track intellectual property in business and music rights for artists.
Protecting Your Cryptocurrency
Cryptocurrency and the blockchain stand to be a major driving factor in the technology of the future. However this popularity has attracted an element of cybercrime. There are several tools internet users should use to increase their online protection. One of these tools is SaferNet.
SaferNet is the perfect solution to the cybersecurity issues that individuals, families, and businesses face today. It not only connects every device using a secure, 24/7 always on, military grade VPN, but it also stops outside cyberthreats, malware and viruses as well. On SaferNet, all users are protected anywhere in the world, all the time, on any cellular or Wi-Fi network. In addition to SaferNet’s VPN and cyber protection, it also offers a range of employee or parental/family internet controls including internet filtering, monitoring, scheduling, and blocking access to websites or even entire website categories
Typically, a user would need 3 separate services for a VPN, Malware Protection, and Internet Controls; SaferNet offers all 3 features in one service. SaferNet truly is an endpoint security presence that can be implemented in minutes around the world, on phones, laptops, tablets, and computers at an economical price point that caters to all internet users. SaferNet guarantees a smooth setup and installation process that takes only minutes, and an easily accessible control hub for you to monitor all your employee’s or family members devices; including activity, time spent online, and threats blocked.