Simplest Introduction to Blockchain

What is the current issue?

We all know that our data is not secure in this digital world.

Tech giants know more about you than you know about yourself. Your friends may forget your birthday but facebook never will.

But the question is how do they do that? The answer is Centralized Systems.

Centralized Systems

The idea is very simple. It is based on a traditional client/server model. These systems have a central entity and all the nodes are connected with the central entity. Here all of your data goes to that single entity. And this type of system has a severe security flaw. Hacker only needs to attack this central entity then he can get all the data. And what if this central entity goes corrupt then If they want they can use your data against you.

So to counter that people are now talking about decentralized systems.

Decentralized Systems

It is based on a peer-to-peer network. Here data is not stored by one single entity. In fact, everyone in the network has the data. And this type of system has lots of benefits. Users don’t have to put trust in a central authority. There will be no single point of failure. And because of no middleman, the cost of services will be less.

And a blockchain is mainly based on this system.


In simple terms, it’s a chain of blocks that holds some data. Which are not controlled by any single authority? Thanks to our decentralized system. They ensure security, transparency, and data immutability. That means data is secure as well as transparent i.e you can choose to whom you want to show your data. And once the data is stored it’s very hard to tamper with it.

And a famous implementation of blockchain is bitcoin.

Architecture of Blockchain

A single block of blockchain consist of 3 things:

  1. Data: It can be any type of data like bank transactions, personal info land records like that
  2. Hash: Basically it’s a unique identifier of the block. And if you change anything in the block then this hash value will automatically get changed.
  3. Previous block hash: Hash of the previous block helps us to connect the current block with previous blocks. And that’s how we form a chain in the blockchain.

Why it’s secure:-

Hash function

Remember? I told you that if you change anything in the block then the hash will automatically get changed. Now think about it, the moment when a hacker tries to temper with the data the hash value of the block will change automatically.

So let's say if we changed something on block 1 then the hash of block1 will get changed. And in block 2 we have a hash of block 1. So when you compare the hash the hash will be different. And the chain will break. Then to maintain the chain. we have to set the new hash in block 2 and then the chain will reconnect.

But when we do that it will affect the hash of the block 2 because we have changed the previous block hash in block 2. Like that this process will go on. So we need to change the hash value for all the blocks of the blockchain.

But that’s not a big issue we have supercomputers which can do thousand of calculations within a second. So within a minute, we can easily set hash value in all the blocks. That’s why there is something more called a consensus algorithm.

Consensus algorithm

Every time when you change something or add a new block that has to be validated. For validation, every network has an algorithm which is called Consensus Algorithm. It is used for validation purposes. Various consensus algorithms are there it varies from network to network.

Some of the famous examples are proof of work which is used in bitcoin and another one is proof of stake used in ethereum network.

In Proof of work, you have to solve some cryptographic puzzles, and the average time required to solve that is 10minutes.

In Proof of stake, you first have to buy some stakes in the network which require lots of money.

So now I think you get the point to make a tiny change in a single block. You need to complete some heavy-duty tasks for each block of the blockchain.

But still, there is another layer of security and that is a peer-to-peer network

Peer-to-peer network

This blockchain is not stored in a single system. Because it’s based on a peer-to-peer network. So a copy of blockchain data will be available to all the systems of this network. So to make your change valid you need to change data on more than 50% of the network. Because blockchain kind of works on majority basis means if more than 50% systems of the network have the same blockchain then that blockchain will be considered as valid.

So to summaries this if you want to manipulate a single data

1- You need to change the hash value of all blocks.

2- To change a block you need to complete some heavy-duty tasks.

3- You need to do these processes on more than 50% systems of the network.

So these are the things which make blockchain so secure.



It is available for the entire world. cryptocurrencies are based on this blockchain. Here the data is transparent to the public. And Anyone can be part of the network. It is fully decentralized. And it’s slower because this type of blockchain needs a consensus algorithm.


If an organization establishes a blockchain for its own use then it’s called a private blockchain. Here blockchain data is available only for the employees of the organization. So only employees can be a part of this blockchain network. Now because an organization will own it so it is partially decentralized. It is faster because consensus algorithms are not needed here because this blockchain is owned by an organization and all members are pre-approved.


Here you will be having a group of people or a group of organizations. They will come together and create a blockchain. And like the private blockchain, it’s limited, partially decentralized, and faster.



The technology is very complex. To implement blockchain you have to go through a whole lot of concepts like hashing, cryptography, decentralization. So it’s hard to digest all the concepts in the first go. It has a big learning curve.

Slow Speed

In comparison to VISA and MasterCard cryptocurrencies are slow. On an average VISA and MasterCard can handle 1000 transactions/sec and cryptocurrencies can handle nearly 10 transactions/sec. We have thousands of people doing transactions every sec. To process, all of them cryptocurrencies will take more time.

High Resource Consumption

It’s because of consensus algorithms to process that algorithm a huge amount of resources are needed.

And if you want to be part of the network then you need to download the entire blockchain data on your system that will cost lots of memory.

Use in illicit activities:

Bitcoin transactions are hard to trace because of its anonymity while opening a bitcoin wallet you don’t need to provide your authentic information. So nowadays after a ransomware attack, hackers demand money through bitcoins. Because it’s hard to track where the money is going.

I hope you get a clear idea of blockchain technology. I encourage you to learn more about this as there is no doubt that blockchain could play an important role in the near future.

Feel free to contact me at if you have any queries.




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