Blockchain is a distributed network structure that processes data stored in blocks in a decentralized way. The question of what is blockchain is one of the most frequently asked questions in the technology world in recent years.
What is the Meaning of Blockchain?
Blockchain means a constantly growing large ledger that is recorded in the form of blocks, secured by immutable cryptography . This technology makes it easy to record and track data in the block network. These blocks, which are linked to each other in a chain, encrypt the transactions of the large ledgers registered in the distributed database and thus provide convenience to the users.
What Is Blockchain Briefly?
Blockchain has become a technology that can be used in many areas, thanks to its convenience and minimizing security risks. To briefly explain the concept of blockchain, it can be listed as follows;
- Using cryptography techniques in a modern way,
- It facilitates the monitoring and recording of data,
- Records are irrevocably and irrevocably kept away from traditional technology.
- It is secure thanks to the strong infrastructure on which encryption methods are based,
- Transactions are processed in blocks on digital ledgers,
- These ledgers are linked and encrypted in successive chains,
- Smart contracts are used in the processing and recording of data,
- It has a constantly growing structure.
How is the word Blockchain written and used in US?
The USA equivalent of the word “ block” is “block”, meaning that the tables in which the data are listed are classified into blocks or arranged in columns. Chain , on the other hand, has the meaning of chain , that is, it refers to the parts that are tightly connected to each other in the form of rings. How to say blockchain in USA?
- Block Chain
has different uses. The usage of each spelling is correct.
What You Need to Know About Blockchain History and Who Is Its Inventor?
The concept of blockchain was first introduced as a concept by Satoshi Nakamoto in 2008 . Who is Satoshi Nakamoto , who is mentioned frequently ? Satoshi Nakamoto is a person or group of people who first used Bitcoin in the cryptocurrency network and solved this problem by solving what is known as double spending, that is, the double spendability and tampering of a digital currency . However, although this concept first started to spread clearly in 2008, it was actually in 1991 by Scott Stornetta and Stuart news. The foundations of secure blockchain technology were laid by In the following year, they developed these designs and presented a model that increased efficiency in the collection of documents. Blockchain emerged for the first time with these studies that started in 1991.
In 2014, the concept of Blockchain 2.0 was used in The Economist magazine . By 2016, the Bitcoin blockchain had reached a capacity of 50 GB and these two words, which were used separately by Satoshi Nakamoto in his own article, although the blockchain was not used together, became famous as a single concept: Blockchain . In 2016, a research center related to Blockchain research was established in Singapore by IBM and Blockchain 2.0 was established by the Russian Federation in the same year.A project announcement has been made. It has become popular all over the world, with other work taking place this year: the World Economic Forum’s agenda, Accenture PLC’s involvement in its research, and the creation of the Global Blockchain Forum.
Blockchain Phase-by-Step History and Development
- 1991 – Scott Stornetta and Stuart Haber – laying the foundations of secure blockchain,
- 1992 – Extension and development of the chain design by the same team,
- 2008 – Solving the double spending problem with Bitcoin technology by Satoshi Nakamoto ,
- 2014 – Cryptocurrency news spreads as the BTC file size reaches 20 GB and is covered extensively by The Economist magazine
- 2016 BTC file size reaches 100 GB and the concept of blockchain is used as a single word,
- 2016 – IBM’s establishment of a blockchain research center, the Russian Federation’s announcement of its project, the agenda of the World Economic Forum, the establishment of the Global Blockchain Forum.
How Blockchain Technology Works
With the introduction of Bitcoin into our lives, how does the blockchain technology , whose working system and principles have become more definite, work ? The functioning of Blockchain is as follows; The data is processed sequentially in the block, and then the processed data is hashed in the last line and passed into the other block. This line hashed in the other block takes the first place and new data continues to be processed sequentially after that. It continues until the other block is created, and in the newly formed block, the previous block takes the first place in a hashed form. This process continues in this way forever. This operation makes it impossible to replace the system and provides a high standard in terms of safety.
Important Concepts and Definitions of Blockchain
- What is Hash? The definition of the word hash is the hash function. It is used to mean that all of the data in the blockchain is turned into a summary function.
- What is DLT – Distributed Ledger Technology? This concept, which means that the data on the same network is located in more than one area, expresses a decentralized structure. In this way, the same data can be accessed from different areas, this data can be updated, accessed and verified across the entire network.
- What is Decentralized and Distributed Network? It is a distributed network system for processing and storing data on different interconnected data centers (computers). Even if some of them are not working, the operation of one of the computers in communication with each other ensures the smooth operation of the system.
Visual Narrative: Step-by-Step How Does the Blockchain Work?
- Data begins to be processed sequentially in the blockchain,
- Secure codes are sequenced sequentially on the block until the block is completed,
- When the block is completed, the block is hashed, that is, the codes in the entire block are made into one line,
- While the new block is being created, the previous block is passed to the new one in a single hash,
- The sequential order in the new block starts with the code structure that was hashed in the previous block,
- When the new block is completed, a different hash is created in the same way when switching to the new block, and this line is passed as a single code structure when switching to the new one.
- This order continues in the form of continuous blockchains.
How is Blockchain Used and What Are Its Uses?
The most fundamental element in the use of blockchain is the concept of decentralization . This means that computers (data centers), which are centralized, that is, distributed over users, which play an important role in the storage and processing of data, unlike users connected to a main authority, communicate with each other through decentralized and multiple different connections. These distributed data centers allow users around them to transact through the closest and most accessible channel.
Block Chain Usage and Transaction Processes
- Distributed ledger technology refers to the digital ledgers that result from the duplication and distribution of transactions in the data center.
- Transactions performed in blocks in the system are recorded here. As a result of each transaction, these transactions are recorded in the ledgers of the users in the decentralized network.
- The fact that this transaction is not carried out in a single data center speeds up the transactions and reduces transaction fees on the other.
- Since the approval of these transactions is carried out with numerous data centers (computers) in a way that eliminates human error, its reliability is very high. It also reduces the costs to a minimum as it eliminates the validation and verification stages that need to be performed with third parties.
- When a new transaction is made on the network, it is not stored or processed in a single center. This transaction is distributed to all data centers on the network. Each transaction made by each user is distributed and updated on this network.
- Thanks to this data processing mechanism, which is not dependent on the central authority, a 24/7 operating system emerges. In the updates made, only the algorithm works in the transactions of the people. None of the demographic characteristics of the people is considered important. This is seen as an equitable distribution mechanism in financial circles.
What are the Uses of Blockchain?
Considering the usage areas of the blockchain, the most common cryptocurrency market emerges. However, it has a very wide usage area outside the crypto money market. For those who are curious about how to invest with blockchain, the most important blockchain usage areas , which also serve as a guide , can be briefly listed as follows:
- Secure cloud storage
- Stock markets and stocks
- Borrowing and credit systems
- donation systems
- money transfers
- Healthcare outcomes monitoring
- Seafood viewing
- Oil and gas industry
- Supply chain
What Does Blockchain Do?
Blockchain enables data to be processed securely and quickly. These mentioned data can be stored and processed. Information to be stored; is the amount, time, date and is included in the first information layer . Thanks to these basic data, sorting is done within the blockchain. Among the processed data is the person or institution that processes the data, which is called the second information layer . In this layer, the digital signature defined for it is visible, not the data processor itself. This is an element that ensures the security and privacy of users. Third informationlayer contains hash code called hash. Thanks to this code, the structure that will be preserved forever and that will allow blogs to be uniquely separated from each other is established. Briefly, the layers of information can be shown as follows.
Blockchain Information Layers
- Blockchain First Information Layer: Basic elements such as quantity, date, time.
- Blockchain Second Information Layer: A digital signature of the information processor.
- Blockchain Third Information Layer: Hashes that separate blocks.
How To Buy Cryptocurrency With Blockchain: How To Withdraw And Deposit Using Blockchain?
Before knowing how to make financial transactions on the blockchain , you should have a brief knowledge of the blockchain wallet .
What is Blockchain Wallet and How Is It Used?
Blockchain wallet; It is a digital asset element that should be used to store, receive and transfer crypto money. Digital wallets offer a unique digital identity and key that resembles an email address and password. In addition, each of these transactions has a counterpart in the block network, and the transaction made by each user is updated in the entire block network.
All that is required for a transfer is the wallet-specific identification code. A private key is data that gives you access to your wallet. Other users do not need to know this, and you do not need to use this code to access cryptocurrency exchanges. Because the registration verification information provided to you for accessing these exchanges takes place via e-mail or phone.
How To Trade Cryptocurrency On The Blockchain?
Having a wallet to store cryptocurrencies, the user can simply perform transactions such as transfers, purchases and withdrawals of cryptocurrencies. Although there are minor technical differences according to the tools used, intermediary institutions and wallet formats, in general, these transactions work similarly in all systems. To briefly explain these transactions and the use of the wallet;
- Login to the wallet: What you need for this is the wallet id, which can be thought of as a user name, password and the double-factor authentication you have activated.
- Balance check: You can easily check the balance by clicking on the currencies in the wallet.
- Receiving and sending crypto money: It is sufficient to send the wallet code or QR code to the third party to receive crypto money. Likewise, in order to send crypto money, this information of the other party must be available.
- Financial transaction control: The transaction history can be viewed simply from the financial data or transactions section on the main page.
What is Blockchain Private Key and Where Is It Produced?
The unique key created to send and receive cryptocurrencies is called a private key. Thanks to this key, financial transactions on the blockchain can be performed. There are different techniques used to generate the private key. It can be thought of simply as: Anyone can send mail to a mailbox, but only the person with the key can open and receive it. The public key created at work can be known by everyone, but the private key, that is, the private key, is private to the user and allows the user to retain the right of savings.
How to Design Blockchain Technology?
The blockchain system, which has a special structure, is produced by companies that offer this service and operates in many areas. For example, the infrastructure used in an education system owned by Sony is equipped with blockchain technology, or Estonia uses the blockchain infrastructure for recording health data. Spotify license tracking is carried out over the blockchain infrastructure. In addition to developing blockchain technology in-house, these companies purchase from technology giants such as IBM that offer them as a commercial service.
What are Blockchain Advantages and Disadvantages?
Blockchain has many advantages as well as many disadvantages. Blockchain advantages and disadvantages are listed as follows:
What are the Advantages of Using Blockchain?
- be safe
- be cheap
- to be fast
- Increasing the security of distributed data
- Being based on a formulation ensures close to zero risk of error
- Providing transparency
Disadvantages of Using Blockchain
- 51% attacks
- Risk of losing private keys
- Increasing storage area day by day
- Increase in the amount of consumed energy resources