It explains the origin of the blockchain and the basic mechanism so that even business people who are not comfortable with IT can understand it.
I think you can understand the outline of the blockchain, which is attracting worldwide attention as a technology that supports Fintech.
The origin of blockchain
In bitcoin era blockchain is the core technology that supports Bitcoin. It is an idea created by Bitcoin and its creator, Nakamoto Satoshi. As Bitcoin becomes widely known, it is thought that Blockchain, which is the core technology of Bitcoin, can be applied to other applications, and it is attracting attention in fields such as finance, distribution, and contracts.
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In particular, there are people who recognize only one application example of blockchain as bitcoin and evaluate only blockchain, but the idea of blockchain is the idea of “Satoshi Nakamoto” which is unique to support bitcoin. It is necessary to firmly recognize that it was created by sex.
Basic mechanism of blockchain
There are several types of blockchain, but the basic concept is as follows.
- A transaction starts when the user sends transaction information
- The user cryptographically signs the transaction information and sends it to the network
- Transaction information is also sent to the distributed database at the same time
- Each distributed database writes the received transaction information to its own database
- Writing transaction information to the database is done under a specific consensus mechanism (also called mining) to ensure consistency among distributed databases.
- The written transaction information can be referenced including past history (reference authority can be set)
- On the other hand, in contrast to the blockchain mechanism, the existing centrally managed database can be expressed as follows.
- User sends transaction application to central administrator
- The central administrator confirms the content with the applicant and eliminates any fraud
Central administrator writes transaction information in its own database
The central manager notifies the trading partner users of the transaction information
Only the basic administrator has direct access to the database. *If the administrator tampers with the information, it cannot be seen from outside.
One of the first things you don’t understand about the blockchain mechanism is consensus building with distributed databases. A centrally managed database is managed by one database, but a distributed database is one in which multiple databases that record the same data exist.
The reason why it is necessary to create multiple databases containing the same thing is that even if one database is broken, other databases can support the mechanism, and the entire system supports the system. It has the advantage that the performance of each database does not have to be so high. Especially when maintaining a system without an administrator like Bitcoin, if you put one database somewhere, it may be tampered with, so you can distribute it and check each other, There is also an advantage that you can judge the authenticity by majority vote.
Next is consensus, but in a centrally managed database, data is updated consistently unless the administrator makes a mistake. Also, since only one database is updated, large volumes of transactions can be processed at high speed.
On the other hand, in the blockchain, transaction information exists in many distributed databases at the same time, not in one location. For this reason, if you do not update properly in synchronization, transaction information will be updated in this database, and updates will be leaked in that database. This process of synchronizing and updating each database consistently is called “consensus building”.
Simply stated, “consensus building” means deciding, “This is the next piece of information to write to the database!” Instead of writing the data to the database as it is, one step “consensus building” involves a procedure to decide the data to be written next by each participating database as “this is it!” Therefore, in terms of speed in blockchain It is inferior to the central management type database. Especially with Bitcoin, anyone can openly participate in the maintenance work of the distributed database, so malicious people (such as those who try to record falsified data) will also come in. Therefore, even if such a person participates, it takes 10 minutes or more for consensus building so that data can be recorded properly.