Blockchain is a breakthrough technology, prominent in the global cryptocurrency and technology investment market. This technology has great potential for application, linked and secured by complex encryption algorithms. Therefore, learning about blockchain right now is extremely necessary. Let’s learn about Basic Blockchain with Learn Crypto Trading through this article!

Learn about Basic Blockchain

Before going into detailed information, let’s learn the basics of blockchain technology.

What is the Basic Blockchain definition?

Along with Bitcoin and Ethereum, Blockchain technology is becoming a hot topic. It is widely interested, from the technology industry to the investment community. This technology has opened up a world of virtual currency with many different possibilities and potential applications.

Although the concept of Blockchain seems complicated to many people. In fact, its core principle is quite simple. In terms of structure, Blockchain can be understood as a form of database. In which information is stored in blocks and linked together into a chain. 

Every time new information or transactions occur, that information is added to a new block. It will link to the previous block, forming a continuous data chain. This structure is different from traditional data storage, where old information is not deleted. Instead, they are kept in separate blocks and linked together.

When did the blockchain platform develop?

Since the 1980s, inventors have been continuously researching and developing encryption algorithms to solve the problem of information security on the internet. However, this process has encountered many difficulties due to the intervention of third parties. Especially for cybercriminals.

In 1998, researchers Scott Stornetta and Stuart Haber proposed the idea of ​​an immutable data series. It can accurately track the timing of data files so they cannot be tampered with. However, this approach has not yet been considered fully reliable by experts.

In 2008, Satoshi Nakamoto was considered the father of Bitcoin. They used cryptographic techniques to create a digital currency. From this foundation, basic Blockchain technology and its other applications were born and increasingly developed.

See more: Blockchain meaning? Things to know for newbies

What are the Basic Blockchain properties?

Blockchain technology is considered an important step forward in the field of information security. The birth and development of Blockchain have opened up many opportunities and potential applications as follows:

• Decentralized: Blockchain operates independently, based on algorithms. Transactions are carried out directly between parties, without the need for intermediaries, helping to minimize risks from third parties.
• Distributed: Data is stored on thousands of devices with a distributed network of nodes. Even if data is lost or corrupted in some places, information is still available at other nodes. Each node has replication and storage capabilities, making it very difficult to compromise the entire system.
• Immutability: A basic blockchain is built on unique hashes, so to attack one block, a hacker would have to attack almost all the blocks, which is almost impossible.
• Security: Only those who own the Private Key can access the data inside the Blockchain.
• Transparency: Every update in the Blockchain is saved in the transaction history, which can be checked and retrieved.
• Smart Contract integration: Contract contents will be executed automatically when the previous conditions are accepted, no one can cancel them.

Some algorithms of the blockchain platform

Basic Blockchain technology uses consensus algorithms to accurately authenticate information in records and nodes in the network. This allows transaction information to be reliably recorded onto the Blockchain. Below are some of the most popular algorithms of the Blockchain platform.

Proof of work (PoW) blockchain algorithm

Proof of Work (PoW) is the first consensus algorithm used in Blockchain. Especially in Bitcoin – the leading cryptocurrency. In PoW mining, miners will use their computer power to solve problems to create hashes. When the nodes in the network reach consensus and accept this hash. New miners can validate transaction blocks and add them to the Blockchain chain.

Basic blockchain algorithm Proof of Stake (PoS)

Proof of Stake (PoS) is a consensus algorithm developed as an alternative to Proof of Work (PoW). The goal of PoS is to achieve distributed consensus through “proof of stake”. This consensus mechanism does not require miners like in PoW. Instead, participants will have to stake (stake) a large amount of their coins. From there, gain the right to validate and create new blocks.

Thuật toán blockchain Delegated Proof of Stake (DPoS)

Delegated Proof of Stake (DPoS) is another consensus mechanism in Blockchain. In DPoS, users will vote to select delegates. The more votes delegates receive, the more power they have in creating valuable transaction blocks for the community. This method is intended to bring fairness. Through constant voting and frequent disturbances in the system.

Basic blockchain algorithm Byzantine Fault Tolerance (BFT)

Byzantine Fault Tolerance which is a consensus algorithm. To prevent fraudulent acts in the Blockchain system. According to the BFT principle, the system will still operate stably. As long as the number of bad nodes (Byzantine nodes) does not exceed ⅓ of the total number of nodes. 

The BFT algorithm allows participants to verify and manage the state of the chain. Also, share messages with other chains to get the most honest and accurate transaction record.

There are also many other Blockchain algorithms, that you can learn more about. However, the above are the most popular and common algorithms.

Basic blockchain structure and operating mechanism

The basic Blockchain structure consists of two main components:

• Block: Each block contains recorded data.
• Chain: Blocks are linked together to form a continuous chain.

Each block includes three components:

• Data: Data records have been verified and protected by chain-dependent encryption algorithms.
• Hash code of the current block (Hash function code): This is the hash code of the data content in the block.
• Previous Hash: This is the hash of the previous block, associated with the current block.

Examples of information recorded in a Blockchain block include sender information, recipient information, and the number of virtual currency units (coins) sent. Each Blockchain block has its own Hash Code. This is a string of letters and numbers created using an encryption algorithm. 

Blockchain’s operations take place as follows: First, transaction information is recorded on the system to create a record. Then, computers in the system (called Nodes) will verify the validity of these records according to the consensus algorithm on the Blockchain.

See more: OKX – Open an OKX exchange account on computer

How basic blockchain works

From the basic Blockchain concept, we can understand how this technology operates:

• When a transaction occurs, it is recorded as a “block” of data. These transactions represent the movement of an asset, which can be tangible (product) or intangible (intellectual).
• These data blocks are linked together, forming a continuous chain. When an asset is transferred from one place to another or ownership is exchanged, blocks of data are added to the chain.
• Data blocks link themselves together to ensure safety and prevent outside changes or interference. Each additional block strengthens the verification of the previous blocks, as well as the entire chain.

This makes it extremely difficult to tamper with the underlying Basic Blockchain. It helps maintain the immutability of data. This is an important feature, eliminating the possibility of original blocks or data being tampered with. Thus, Blockchain creates a trusted electronic ledger-based transaction network.

Besides blockchain, you can also learn more about Arbitrum to help improve blockchain performance. So what is Arbitrum? Arbitrum is a Layer 2 scaling solution for the Ethereum blockchain. It is designed to improve performance and reduce transaction fees by processing transactions off Ethereum’s main chain (Layer 1) before recording the final result back to the main chain.

Epilogue

Just now, we have thoroughly learned about the Basic Blockchain technology. If you have any questions related to this topic, please quickly share them in the comments section. Learn Crypto Trading will try to answer your questions as soon as possible.

Frequently asked questions

What is Blockchain understood as?

Basic Blockchain is essentially a distributed, decentralized technology that stores transactions in the form of blocks that are immutably linked together. This technology was born with the emergence of the Bitcoin cryptocurrency. 

What are the principles that blockchain technology is based on?

Blockchain works on the principle of allowing information to be distributed among participating members without being copied or changed.

What are the popular types of blockchain today?

Blockchain has three main types: public, private, and consortium.