Blockchain technology explained

Blockchain technology explained – Complete Beginners guide

Blockchain technology is just another technology like Artificial Intelligence which is hot topic for the debate, originally the technology was invented for the “Digital currency” called “Bitcoin” but now it has paved the way to other potential uses for the technology.

We can’t deny the fact that this new technology is undoubtedly a genius invention but the brainchild personality behind this technology is still unknown, it is still not clear that how many people are behind this invention.

The person who developed Bitcoin and this Blockchain technology used the pseudonym of Nakamoto Satoshi and since then it has become greater than something it was meant for, hence as i mentioned earlier, since the technology has paved way for other potential use, everyone has been curious about what this technology is and exactly how it works and for what purpose it can be used other than mining bitcoins?

So here is a complete step-by-step beginners guide to Blockchain technology.

What is Blockchain technology?

A Blockchain is nothing but a chain of multiple blocks in a chronological order where each block contains a data of a certain value which is encrypted with a cryptographic algorithm and is decentralized. It is said to be decentralized because, it has no central authority which is supervising anything.

The types you want to and must know!!

There are total three types of Blockchain?

  • Public Blockchain – These type of blockchain are open to everyone to view and access.


  • Private Blockchain – These type of blockchain are only accessible to selected few group of people like corporate companies.


  • Hybrid Blockchain – Hybrid are mixture of public and private blockchain where few part is open to the public and rest of the part is accessible to organizations.

How does a this technology work?

A data within each block of blockchain technology is shared and keeps moving that means the data doesn’t get stored in a single database, which means, the data is publicly visible and you can even verify it. And hence because of this it becomes impossible to find the centralized version of the data and hackers are unable to corrupt its mechanism.

The data within the blocks of the blockchain is hosted by millions of computers around the world and is moving and getting shared continuously, which makes the data is accessible to anyone.

If the data is stored at a centralized location it can be discovered and can even be bypassed but since the data within the blocks of blockchain lacks any centralized storage location its impossible to pinpoint the source or its originating location. Let’s dig more deep into blockchain to simplify the explanation.

Explaining the tracking mechanism

The robustness in the blockchain technology lies because of its decentralized mechanism which makes it impossible for a single entity to take control over its mechanism and since no one can control it the point of failure of this blockchain technology is still not found.

Bitcoin first came in 2008 and since then its has been operating without any disruption. Same as internet which is running for last 30 years without any problem.

With this kind of robustness blockchain brings countless of potential inventions along with it. But what is more interesting is how blockchain can keep track records.

Suppose there are chain of blocks from A to D now assume that the data which is kept inside block “D” is modified, so what blockchain does is, instead of making modification to the “D” block itself, it generates a new block “E” and stores the modified data inside that newly generated E-Block.

Blockchain tracking mechanism
Blockchain tracking mechanism

In other words it keeps the old data as well as new data and this is how the track record is maintained.

Now consider this as an example for how Blockchain technology keeps the track record. Let us consider that there is a dispute over a property between family member A and family member B, where both the family members claim that they own the property.

However, since we’re assuming that blockchain is keeping the track record, it will also keep the track record for the previous owner as well as the track record for new owner. Because of which the dispute will be solved easily.

What’s more since blockchain makes this data decentralized and distributed among the network and on top of it secures with a cryptographic algorithm, it makes the data impossible to tamper.

Explaining the security mechanism

We does know that decentralizing and distributing the data throughout the network ensures that the data remains safe but what exactly does happens behind the scenes? Now to understand the exact same thing, it was essential to first know about the tracking mechanism.

While explaining the tracking mechanism we gave example of “A to D” blocks, in which the data from the block D was modified and then the modified data was stored in the newly generated E Block thus keeping the entire track record. During the entire process a proof of work is developed throughout the network which ensures data remains legit. So you might wonder how does that proof of work is generated.

Blockchain Security
Blockchain Security

See, before storing a modified data of block D into a new block, few things takes place, First a highly-complicated cryptographic puzzle is solved by the computer and then the block “E” is generated and then the same computer which solved the puzzle shares the solution between all the computers on the network, this is how the proof of work is generated, this proof of work is then verified by the other computers on the network, if correct the newly generated “E Block” will be added to the chronological chain of A to D Block.

These highly complicated puzzles and verification by all the computers on the network ensures that we can trust the data on the Blockchain network. As the network itself does the trust building for us. Which gives us the opportunity to work with our data in real time.

So how Blockchain technology is game changer?

Now that we know how the tracking and security mechanism work in the blockchain so to understand how blockchain is a real game changer, consider this as a scenario. Originally all people keep their financial records secret, the one who are aware of these financial record, is people in the bank sector and our lawyers. Currently we trust them with our financial records and hence it becomes easy for us to carry out whatever business we want to do.

But there is one major drawback to it, although bank and lawyers act as our trusted intermediaries and are able to verify the financial data which allows us to carry out whatever work we want to do. It consumes huge amount of time as well as money and because of which, we don’t get instantaneous results.

Blockchain P2P Interaction
Blockchain P2P Interaction

With blockchain, there are no trusted intermediaries as the whole trust building mechanism is done by the network which contains computerized algorithm that keep information within the blockchain safe from tampering and as a result we get instantaneous result for our work in real-time.

This type of trusted peer-to-peer interaction with the data, can really revolutionize the way we interact with our data, verify our data and transact with one another. Hence proving that the blockchain can become a game changing technology.

Wrapping up

Though Blockchain technology is game changer in today’s world, it brings a real problem to government organizations and policy makers. Many are struggling with how to devise a policy to such technology which is secure enough to mitigate the risk of data tampering almost to zero.

If you have any questions or views you can comment down below, we will try to answer to the best of our abilities.