Introduction
A block is the ‘current’ part of a blockchain, which records some or all of the recent transactions. Once completed, a block goes into the blockchain as a permanent database. Each time a block gets completed, a new one is generated. There is a countless number of such blocks in the blockchain, connected to each other (like links in a chain) in proper linear, chronological order. Every block contains a hash of the previous block. The blockchain has complete information about different user addresses and their balances right from the genesis block to the most recently completed block.
A blockchain is a digitized, decentralized, public collection of all cryptocurrency transactions. Constantly growing as ‘completed’ blocks (the most recent transactions) are recorded and added to it in chronological order, it allows market participants to keep track of digital currency transactions without central recordkeeping. Each node (a computer connected to the network) gets a copy of the blockchain, which is downloaded automatically.
The blockchain was designed so these transactions are immutable, meaning they cannot be deleted. The blocks are added through cryptography, ensuring that they remain meddle-proof: The data can be distributed, but not copied. However, the ever-growing size of the blockchain is considered by some to be a problem, creating issues of storage and synchronization.
What is a Distributed Ledger?
Centralized Ledger
There are multiple ledgers, but Bank holds the “golden record”
Client B must reconcile its own ledger against that of Bank and must convince Bank of the “true state” of the Bank ledger if discrepancies arise.
Distributed Ledger
There is one ledger. All Nodes have some level of access to that ledger.
All Nodes agree to a protocol that determines the “true state” of the ledger at any point in time. The application of this protocol is sometimes called “achieving consensus.”
Related Terms
Multichain Technology: The MultiChain technology is a platform that helps users to establish a certain private Blockchains that can be used by the organizations for financial transactions. A simple API and a command-line interface are what MultiChain provides us. This helps to preserve and set up the chain.
Ethereum: Ethereum is an open-source, public, blockchain-based distributed computing platform and operating system featuring smart contract functionality. It supports a modified version of Nakamoto consensus via transaction-based state transitions
Hyperledger: Hyperledger is an umbrella project of open source blockchains and related tools, started in December 2015 by the Linux Foundation, to support the collaborative development of blockchain-based distributed ledgers.
Working
A blockchain ledger consists of two types of records: individual transactions and blocks. The first block consists of a header and data that pertains to transactions taking place within a set time period. The block’s timestamp is used to help create an alphanumeric string called a hash.
After the first block has been created, each subsequent block in the ledger uses the previous block’s hash to calculate its own hash. Before a new block can be added to the chain, its authenticity must be verified by a computational process called validation or consensus. At this point in the blockchain process, a majority of nodes in the network must agree the new block’s hash has been calculated correctly. Consensus ensures that all copies of the distributed ledger share the same state.
Once a block has been added, it can be referenced in subsequent blocks, but it cannot be changed. If someone attempts to swap out a block, the hashes for previous and subsequent blocks will also change and disrupt the ledger’s shared state. When consensus is no longer possible, other computers in the network are aware that a problem has occurred and no new blocks will be added to the chain until the problem is solved. Typically, the block causing the error will be discarded and the consensus process will be repeated.
