Unleash Blockchain with example
As most of us know, Bitcoin is the first application which is running on the blockchain technology. It became so popular in no time that people always correlate and replace it with Blockchain. There are couple of other blockchain frameworks like Ethereum, Hyperledger etc. built not to limit its strength to build only Crypto-currencies but also to solve some real-world problems efficiently which takes a lot of time and governance today. We will try to understand about almost 10-year-old but still very young technology which is the next big thing after innovation of Internet with some real-life example.
Let’s step back and think about if we have already used similar kind of structure even before Bitcoin came into existence. Let’s take an example of our college library. If you wanted to issue a book from your college library, you must first search that book and ask librarian to issue it against your name. He used to make an entry of that book into his book register and issue that book for few days. Simple process but how this whole process is similar to the Blockchain technology.
Every book (asset) from the library (blockchain environment) have its own recording card (ledger). The librarian adds issue date and your name in that ledger (using smart contract). But while doing that, he doesn’t update the existing entries which are already present in that ledger but adds new entry (block) below the existing entry (block) to form a chain of blocks (blockchain). Why he adds a new entry instead of updating an existing one? Because it makes his life easier to track down (validate) the transactions done on that book easily and if required check who all has issued that book earlier. In that ledger each block linked with the earlier block because all the blocks are ordered and linked by dates (hashes) to form a chain of blocks. Additionally, no one can update existing entries to make the chain data immutable. If someone tries to change the block data or order of blocks, then the chain will break down. So, it’s a responsibility of librarian (miner) to make sure that he should validate the new transaction as well as to check if existing blocks are not tampered while adding a new block in the ledger to keep an integrity of chain intact. Blockchain is also built on the similar library book issuing process.
P.S.: All bold texts are different components of blockchain.
But there is one part missing from above library example which is very important in the Blockchain technology. If you notice, then you will find that all this process is done within the boundary of a single library. But what if all the colleges from the town decide to share their library books with all other students from other colleges as well? Then, in that case, all colleges must first connect with the common but distributed system to share different book. Because of such platform, students from any college can issue a book from any other college library with ease. But there is a small challenge for a librarian to identify if a student is really a student of particular college. To solve this problem each college (contains private key) issues an Identity card (acts as Blockchain Wallet which containspublic key) to their students which can be easily authenticated and identifiable by any other college library who is a part of this system.
From above example, we can conclude that the Blockchain is basically a distributed, shared but secured data ledger technology where each record block is linked with its previous record block using hashing technology to form a chain of immutable blocks. Though at the first glance it looks like a database but, it’s not. Database is one of the components in Blockchain eco system. One must be careful in choosing between the DB and Blockchain for particular use case. Given decision path provides good understanding about the business cases when one should use Blockchain.
