Blockchain is a technology created to get everyone in the system to maintain a collective database without the need of a central authority controlling the system. This new way of sharing and reconciling information, was introduced back in the year 2009.
Understanding blockchain is not difficult. Like accounting, it has a set of ledgers, keeping track of things going in and out.
Forwarding to the more basic level, it is just a set of data that are interconnected, checking and verifying the changes to the system and syncing with everyone in the chain so that all information is up to date and correct. On a more complex level, all these four things must happen for it to be recorded as safe and correct.
A transaction must occur. The initiator has to indicate the interest of sending data from current point to the next point.
A transaction must be verified. The self governing ecosystem, created during the inception of the blockchain, has to run through a set of rules before confirmation from other reliable sources.
A transaction must be stored in a block. After the verification from various trusted entities on the legitimacy of the transaction and its historical background, then it will be recorded in a public ledger, documenting its digital signatures. In a block there can be hundreds of not thousands of transactions at a time.
That block must be given a hash. Like any other forms of verification, once a block’s transactions are confirmed, they will be stamped with a transaction hash. This is like a digital proof / stamp that all transactions have been checked and they are in this file correctly. Sync will be executed to all the other online nodes, permanently stamping its mark on the blockchain without the capability of editing / changes in the future to the particular block.
Security of a blockchain is good. As the blocks are created and transaction hash is stamped to blocks, it makes it more and more difficult to edit the history of it. The way hash is created is by maths function that turns digital information to a string of numbers and letters. In order to change any information of the previous blocks, all transaction hash has to be changed making it virtually impossible to hack.
The core functions
Elements of AiBlocks blockchain
Computers that would like to be part of a blockchain and participate in verifying transactions can first download the software from the website and install it on a working computer.
Then it has to sync with all the current servers that are running the most up to date data. As transactions are executed, the data will then be grouped into a “block”. This block would then be verified by multiple other computers, similar to yours, so see if data history and ledgers are in check. If everything is ok, a block hash will be issued. If the network rejects a block, it will then vote again at the next block, till a certain period of time and it expires. After many block confirmations, the network will then chain all the blocks together according to the date, time and transaction hash, eventually forming a virtual chain of blocks.
The same data and chain is then stored in all computers that are participating in the network, keeping a copy locally. So, these data will then be used and shared with the others, confirming the history of the blocks and transactions in it, verifying if any block has been previously altered or not.
Let's take a look at the possibility of foul play. Say you would like to alter any past transaction that would benefit you in any way. You have to alter the files of the majority of the computers, if not all, to “trick” it to accept your dubious new transaction. You may also try to implement new computers to the tune of at least 51% of the network power, to be able to switch the transaction. This is called a 51% attack. In large networks like Bitcoin, such attacks would take a lot of computing power and are very very expensive. On the Stellar network, it would be impossible because by design, it is meant to not allow this to happen. Eventually, dubious transactions would be voted down and the network would select the right data.
Essential cryptocurrency projects
AiBlocks will not take into account that other blockchains are competitors. No, we look at it as there can be multiple good softwares out there, to solve different problems people have. Here are some of the notable cryptocurrency in the market today.
The first, oldest and largest cryptocurrency in the market. Its open sourced code is the inspiration for all blockchain networks available today.
It is the second largest cryptocurrency in the market today. Largely, Ethereum is similar to Bitcoin in many ways but the creators added on features where you can build apps on top of their blockchain network. These apps can function for anything that can be represented digitally and they are called Dapps (decentralised applications). Ethereum is also known for its smart contracts, where contracts can execute automatically with a set function or rules at the programming stage.
The network runs on a programming language called Solidity and many are implementing it, using its software because the infrastructure is ready with miners and nodes to keep it secure and running. Ethereum is currently facing expansion issues as the usage has outgrown the network, making it very slow and expensive to transact. Solidity as well, makes Ethereum apps very buggy and exploitable to technological developments.
Stellar uses a much more environmentally friendly approach to those power hungry blockchains. The ecosystem is developed such that it would be comparable to the current remittance and payments systems, where confirmation time is short, quick and accurate. Fees are also low as the transactions inter network cost less than a penny.