How does blockchain work?

blockchains are incredibly popular nowadays, but what is a blockchain? How do they work? What problems do they solve and how can they be used. Like the name indicates, a blockchain is a chain of blocks that contains information. This technique was originally described in 1991 by a group of researchers and was originally intended to timestamp digital documents so that it's not possible to backdate them or to tamper with them, almost like a nursery. However, it went by mostly unused until it was adapted by Satoshi Nakamoto in 2009 to create a digital cryptocurrency. Bitcoin. Now a blockchain is a distributed ledger that is completely open to anyone. They have an interesting property. 1, some data has been recorded inside the blockchain. It becomes very difficult to change it. So how does that work, well, let's take a closer look at a block. Each block contains some data hash of the block and the hash of the previous block, the data that is stored inside the block depends on type of blockchain, the bitcoin blockchain, for example, stores the details about a transaction in such as the center receiver and demand of coins. A block also has a hash. You can compare a hash to a fingerprint. It identifies a block and all of its contents, and it's always unique just as a fingerprint. Once a block is created, its hash is being calculated, changing something inside the block will cause the hash to change, so in other words, hashes are very useful when you want to detect changes to blocks. If the fingerprints of a block changes, it no longer is the same block, the third elements inside each block is the hash of the previous block. And this effectively creates a chain of blocks, and it's this technique that makes a blockchain secure. Let's take an example. Here. We have a chain of three blocks, as you can see. Each block has hash and hash of the previous block, so block number 3 points. The block number 2 and number two points the number now the first block is a bit special. It cannot point to previous blocks because. Well, it's the first one we call this block the genesis block. Now let's say that you tamper with the second block. This causes the hash of the block to change as well. In turn, that will make block 3 and all following blocks invalid because they no longer store a valid hash of the previous block, so changing a single block will make all following blocks invalid. But using hashes is not enough to prevent tampering computers these days are very fast and can calculate hundreds of thousands of hashes per second, you could effectively tamper with a block and recalculate all the hashes of other blocks to make your blockchain valid again, so to mitigate this blockchains have something that is called proof of work. It's a mechanism that slows down the creation of note blocks in bitcoins case, it takes about 10 minutes to calculate the required proof of work and add a new block to the chain. This mechanism makes it very hard to Tamper with the blocks because if you tamper with one block, you'll need to recalculate the proof of work for all the following blocks. So the security of a blockchain comes from its creative use of hashing and the proof of work mechanism. But there is one more way that blockchains secured themselves, and that is by being distributed instead of using a central entity to manage chain blockchains, use a peer to peer network, and everyone is allowed to join when someone joins this network. He gets a full copy of the blockchain. The node can use this to verify that everything is still in order. Now let's see what happens when someone creates a new block that block is sent to everyone on the network. Each note then verifies the blog to make sure that it hasn't been tampered with. And if everything checks out, each node adds this block to their own blockchain, all the notes in this network create consensus. They agree about what blocks are valid in which aren't blocks that are tempered with will be rejected by other nodes in the network, so to successfully Tamper with a blockchain. You'll need to tamper with all of the blocks on the chain, renew the proof of work for each block, and take control of more than 50 percent of the peer to peer network. Only then will your tempered block become accepted by everyone else, so this is almost impossible to do. Blockchains are also constantly evolving one of the most recent developments is the creation of smart contracts. These contracts are simple programs that are stored on the blockchain can be used to automatically exchange coins based on certain conditions more on smart contracts. In a later video, the creation of blockchain technology picked a lot of people's interest. Soon. Others realized that this technology could be used for other things like storing medical records, creating a digital notary. Or even collecting taxes. So now you know what a blockchain is, how it works on a basic level and what problems it solves, want to learn how you can implement a simple blockchain in javascript, then check out this video here, and as always, thank you very much for watching.