With the recent hype about cryptocurrency, many people know blockchain as the technology behind bitcoin.
Modern technology, allows people to communicate by talking, and sending texts, videos, and emails, directly while broadly maintaining trust between individuals regardless of the distance. Yet, when it came to transferring money, it was a bit more complicated. The bitcoin (blockchain) was looking to also solve this problem. However, the potential use cases of blockchain extend far beyond financial transactions.
What is blockchain?
Blockchain was introduced to challenge the status quo in a radical way. By using math and cryptography, blockchain provides an open decentralized database of every transaction. It is sometimes referred to as a distributed ledger.
The name “blockchain” is quite intuitive. Transactions are stored in virtual “blocks” that ensure it is permanent, transparent and cannot be replicated. Each block stores a specific number of transactions after which a new block is formed. All verified and legitimate blocks are connected to form a virtual “chain”, and hence the name – blockchain.
So what consists of a block?
There are two important parts of the blocks:
The header – which includes metadata such as a unique block reference number, the time the block was created and a link back to the previous block.
The content – usually a validated list of digital assets and instruction statements such as transactions made, their amounts and the addresses of the parties to those transactions
So how many transactions are stored on a block?
So it’s not the number of transactions per say, but the volume that the transactions hold. Collectively a block can hold transactions up to 1MB for the bitcoin blockchain.
Okay, so what’s a typical transaction size?
The transaction size has been in the range of 350 – 710 bytes. However, as per tradeblock.com the median transaction sise has been about 440 bytes from 2012 to now. (1). So through the power of deduction, it amounts to about 2,000 transactions per block on an average for the bitcoin blockchain.
Is there just one universal blockchain?
No, the bitcoin blockchain was the first, but many more have come into being, including some that are more advanced such as Ethereum.
Can everyone view all transactions on a blockchain?
Nope, not really. There are different kinds of blockchains – public or private. The bitcoin network is public and is “permission-less”, because anyone can read or write data from or to the ledger if they are running the appropriate bitcoin software (2) such as bitcoin Miner, BTCMiner, CGMiner and BFGMiner.
As for private blockchains, participants, known as priori, need to have permission to update the ledger. The participants may come from the same organisation or different organisations within the same industry sector that is governed by informal agreement. (2)
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Block Image Source: https://www.slideshare.net/standel/blockchain-overview-use-cases-implementations-and-challenges