- dApp(Decentralized Application)
- 51% Attack
- Smart Contract
- Soft Fork
- Hard Fork
- Token Economy
- Consensus Algorithm
- Digital Signature
- Public key
- Private key
- Block Height
- Merkle Root
- Time stamp
- UTXO (Unspent Transaction Output)
- ERC20 Token
Blockchain is a computing-based system which stores the target data in 'blocks' linked in recorded time order. At its core is a security which makes hard for malicious attackers to forge or falsify data in blocks, because all users in the network share all data, which is open to everyone and being original at the same time. In the traditional network, storing and maintaining of data rely on a central system, and if the data were lost or forged by hacking, the system failure would occur and users wouldn’t be able to get into the system. Also, preserving a massive amount of data, the central system needs to prepare for unexpected attacks all the time. So, the blockchain technology had been created by the need of a trusted and secured system which stores and shares data without central organization.
The following image helps understanding the blockchain.
(Image source : https://www.cbinsights.com/research/what-is-blockchain-technology/)
Alice tries to send some money to Bob. In the traditional system, a central institution, such as a bank, will check Alice's account balance to make sure it is equal or exceeding the amount to be transferred to Bob. After this verification, the money will be sent out. To be more specific, the central institution simply modifies the numbers in both accounts, increasing the number of Bob's as much as decreasing Alice's. The record of this process proves that central system safely validates the transaction and saves the documents on behalf of users. On the other hand, in the blockchain this process is done by everyone in the network with consensus mechanism. Everyone validates both accounts of Alice and Bob together, and stores this verification data into blocks to share with others for confirmation. When the blocks with transaction information are confirmed by all, the balance of both Alice and Bob’s accounts will then be changed.
The system like this has no central point, which can be attacked by hackers, and fees as in trusted institutions like banks. The blockchain technology is very suitable in the areas, such as banks, finance, and contracts where the data shouldn't be forged whatsoever.