What Is Blockchain?

Blockchain is a list of records called blocks that store data publicly and in chronological
order. The information is encrypted using cryptography to ensure that the privacy of the
user is not compromised and data cannot be altered.

Features of Blockchain

These are the four features of Blockchain which we are going to talk about in detail:

 We have a public distributed ledger, which works using a hashing encryption.

 Every block has a hash value, which is the digital signature of the block.

 All the transactions are approved and verified on the Blockchain network using a proof-
of-work consensus algorithm.

 The Blockchain network utilizes the resources of the miners, who are there to validate
the transactions for rewards.

How Does Blockchain Work?

Blockchain is a combination of three important technologies - cryptographic keys, a

peer-to-peer network, and a digital ledger. The cryptographic keys are of two types -
private key and public key. Each individual or node has both of these keys and they are
used to create a digital signature. This digital signature is a unique and secure digital
identity reference and the most important aspect of blockchain technology. Every
transaction is authorized by the digital signature of the owner. 
A deal or transaction is authorized by a mathematical verification in a peer-to-peer
network. This peer-to-peer network is a large group of individuals who act as authorities
to reach a consensus on transactions, among other things.

All of these transactions are stored in a structure known as the digital ledger. In
layman’s terms, the digital ledger works like a spreadsheet containing all the numerous
nodes in a network and has the history of all purchases made by each node. The
information contained in the digital ledger is highly secure and the digital signature
safeguards it from being tampered with. The most interesting part about this ledger is
that anyone can see the data, but no one is able to corrupt it.

Hash Encryptions

blockchain technology uses hashing and encryption to secure the data, relying

mainly on the SHA256 algorithm to secure the information. The address of the
sender (public key), the receiver’s address, the transaction, and his/her private key
details are transmitted via the SHA256 algorithm. The encrypted information, called
hash encryption, is transmitted across the world and added to the blockchain after
verification. The SHA256 algorithm makes it almost impossible to hack the hash
encryption, which in turn simplifies the sender and receiver’s authentication.

 Proof of Work

In a Blockchain, each block consists of 4 main headers.

 Previous Hash: This hash address locates the previous block.

 Transaction Details: Details of all the transactions that need to occur.

 Nonce: An arbitrary number given in cryptography to differentiate the
block’s hash address.
 Hash Address of the Block: All of the above (i.e., preceding hash,
transaction details, and nonce) are transmitted through a hashing algorithm. This
gives an output containing a 256-bit, 64 character length value, which is called the
unique ‘hash address.’ Consequently, it is referred to as the hash of the block.
 Numerous people around the world try to figure out the right hash value to
meet a pre-determined condition using computational algorithms. The transaction
completes when the predetermined condition is met. To put it more plainly,
Blockchain miners attempt to solve a mathematical puzzle, which is referred to as
a proof of work problem. Whoever solves it first gets a reward.
 Blockchain Hash Function
 Last Updated : 16 Apr, 2020
Blockchain is a constantly growing ledger that keeps a permanent record of all the
transactions that have taken place, in a secure, chronological and immutable way. To
make the data secure blockchain uses hash function.
Hashing:
In simple terms, hashing means taking an input string of any length and giving out an
output of a fixed length. The fixed-length output is called an equivalent hash or simply
hash.

Types of cryptographic hash functions:

 Secure Hashing Algorithm (SHA-2 and SHA-3)
 RACE Integrity Primitives Evaluation Message Digest (RIPEMD)
 Message Digest Algorithm 5 (MD5)
 BLAKE2
SHA-256:
SHA-256 is the most famous of all cryptographic hash functions because it’s used
extensively in blockchain technology. SHA-256 Hashing algorithm was developed by the
National Security Agency (NSA) in 2001.
Hashing process:
For this hash function we can use Anders Brownworth Hash Program, a program
developed by Anders Brownworth.
If we type any character in the data section, we will observe its corresponding
cryptographic hash in the hash section.
Small Changes In The Input Changes the Hash:
If we make a small change in the input, the equivalent hash produced will be entirely
different.
Changing the capital “T” to small “t” completely changed the equivalent hash.
It is very difficult to determine the original string from the equivalent hash but its not
impossible. The only method to determine the original string from its hash is by using
“brute-force”. Brute-force basically means that we have to take random inputs, hash them
and compare them with the target hash.
There can be basically three scenarios:
1. Best case scenario:
We get our answer on the first try. The odds of this happening are astronomical.
2. Average case scenario:
In case of SHA-256 we get our answer after 2^256/2 = 2^255 times. In other words,
its a huge number.
3. Worst case scenario:
We get our answer at the end of data.