Caption Credit: Rezwan Islam
Last year, the Electronic Frontier Foundation said that, “the amount of energy required to download tweets, articles, and instant messages which describe what ‘the blockchain’ is and how ‘decentralised’ currencies are ‘the future’ will soon eclipse the total amount of power used by the country of Denmark.”
blockchain is basically a new kind of database “backed by fancy math.” Yes, it’s simply that boring. And there is nothing revolutionary about the technology itself.Blockchain technology is a structure that stores transactional records, also known as the block, of the public in several databases, known as the “chain,” in a network connected through peer-to-peer nodes. Typically, this storage is referred to as a ‘digital ledger.
Imagine a chain (resembling a database) made up of separate blocks (resembling entries). The unique characteristic of blockchain is that any update to the chain is added at the end. And no previous block (entry) in the chain (database) can ever be modified or deleted. For example, if you send USD 100 to a friend, you cannot simply delete or undo the block (your transaction and its record) once it is done. Your friend has to send back the USD 100 to you, which will be recorded as a new transaction that will be entered at the end of the database. Now, let’s say you sent USD 100 but you want to send USD 110 instead. For that, you cannot simply just modify your USD 100 transaction and add another USD 10 to it. You have to complete a new transaction transferring another USD 10 that will again be added at the end of the chain as a separate entry—thereby preserving the sanctity of the historical record in its truest form. In the old database, any entry can be changed by simply typing over.