Section Three: Inside Blockchain

Inside Blockchain

Blockchain is a continuously growing list of records, called blocks linked and secured using cryptography. Each block typically contains a cryptographic hash of the previous block, a timestamp, and transaction data. By design, a blockchain is resistant to modification of the data.

Anonymous Figure Creator: Satoshi Nakamoto

"The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts."

Blockchain technology was invented by mathematician Stuart Haber and physicist Scott Stornetta In 1991. They first started working on this technology on cryptographically secured blocks. In 1992, both men incorporated Merkle trees into a design, which would allow various types of documents to be collected in a “block.” This technology became popular after Satoshi Nakamoto integrated transaction logs with blockchain technology as the core component of Bitcoin's protocol.

Blockchain's Core Protocol

Blockchain works with blocks, whereas a spreadsheet works with rows and columns. A blockchain block is a collection of data, and in the age of trust, the problem blockchain solves that others cannot. The Blockchain has no central authority; it is the very definition of a democratized system. Since it is a shared and immutable ledger, its information is open for anyone and everyone to see.

Blockchain's White Paper PDF

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