The more the crypto world takes over the internet, the more complex and technical terms we need to learn. It seems confusing at first, but with good research, it can become easier to digest. Our goal is to be the place where people go to learn about these topics. But before we understand how NFTs and digital ownership work, we have to go back to the blockchain.
In this article, we’ll explore the basic aspects of the blockchain; how it’s formed, and the way it stores data. With Clapper transitioning into a Decentralized Autonomous Organization (DAO), we want all of our creators to have a clear understanding of the blockchain in regards to NFT, crypto, and Web 3.0.
What is a blockchain?
The Blockchain is a number of blocks that store data and transactions. They can be publicly viewed by anyone, just like a digital ledger or a bank. The goal of these blockchains is to provide a secure decentralized record of information. This information can range from transactions to smart contracts, and NFTs.
History of The Blockchain
Stuart Haber and W. Scott Stornetta originally developed the concept of the blockchain in 1991 as a digital timestamp that no one could tamper with. Satoshi Nakamoto readopted this concept later in 2009 to create a digital cryptocurrency, Bitcoin. It was the first cryptocurrency and blockchain ever created. This concept changed the game for the exchange of digital assets and offered a secure system to the skeptic minds of the early 2000s.
Elements of the Block
The data is the information that a block contains and it can range from transactions to smart contracts and NFTs. If someone were to transfer Bitcoin to another user, the block would safely store the transaction in its records. The data serves as proof that the transaction is legitimate.
Think of the block’s Hash as a fingerprint. Unique in every way and irreplaceable. Each piece of data, when it’s created in the blockchain, is assigned with its own code.
After a hash is created, each new block must contain the hash of the previous block. Then, it builds the chain off of its previous hash.
This whole process is called Hashing. The hashing function is a system that receives inputs and then through mathematics processes, delivers an output. This action is called mining and can take a lot of computer power and time to link each new hash. Once a hash is changed, the block is changed as a whole.
What makes the Blockchain Secure?
The Blockchain is the foundation of every piece of crypto creation. It provides a secure network for all transactions and data points stored in the block. No one can change, delete, or destroy it. There are three ways this can be possible:
As we mentioned previously, hashing is the process in which all the hashes in a blockchain are linked to each other. This makes it incredibly difficult to tamper with because if someone were to change or alter a hash, anyone could go to the previous hash and confirm that it’s not real. To alter a block, one would have to go one by one until getting to the original block. It would take a lot of work.
Proof of Work
The time that it requires to tamper with a blockchain is a good indication of the unlikeliness that a hacker would do it. The proof of work slows down the creation of each block. If someone alters a hash the system takes 10 extra minutes to calculate the proof of work and either confirm or deny the change. If you recalculate one block, you’ll have to do that for all the blocks and wait for proof of work.
Peer To Peer Consensus
Another way the blockchain is secure is because it uses a peer-to-peer network. We mention that any change of the block needs approval. That is where the peer-to-peer system comes in. The approval comes from nodes, which are small servers that confirm every data added to the blockchain. Each node of the blockchain needs to verify each transaction or block created. If someone creates a new block, it sends a confirmation to all nodes. If it’s not valid, the nodes will not approve it on the blockchain.
Knowing how the blockchain works will allow you to better immerse yourself in this world. Whether you are buying cryptocurrency or purchasing an NFT, understanding how the blockchain stores and secures your transactions is a good way to understand ownership in the crypto world.