Hazem Allbabidi

April 7, 2022 | 5 min read

Introduction To The Blockchain

As humans evolve, we tend to create technologies that help us grow on large scales. In 1971, Unix was created which led to the amazing Operating Systems we use now like Linux and Mac OS. Then 1983 was the birth of the internet which now is a necessity in our lives. In 2008, blockchain was brought into the world of technology by an unknown person that refers to himself as Satoshi Nakamoto.

The blockchain was invented to allow us to move currency around the world, without relying on third-parties like banks. It is basically a way to keep track of transactions in a system that cannot be changed, except in specific situations. It allowed for a way to allow a specific amount of money to be moved and without allowing that same money to be used multiple times. It was a system that was built to replace having to trust a person.

In previous times, and even now, trusting someone to perform an action is a difficult choice to be made. One common problem when explaining the benefits of the blockchain is the Byzantine Generals Problem. The problem is “How do you make absolutely sure that multiple entities, which are separated by distance, are in absolute full agreement, before an action is taken?”. Basically, how can different people reach consensus to do a specific thing. In this problem, there is an enemy city that they wish to attack, there are, let’s say, 4 armies and each one is led by 1 General, and the attack will not be successful unless all four armies attack the city at the same time. The problem consists of multiple issues. First, what if the timing of the attack is not confirmed by all generals? One might start the attack at 3 AM while the other starts the attack at 3 PM. Another issue is if one of the generals was a traitor and they confirmed the time of the attack, but they instead retreated and did not attack?

The blockchain proposed a solution to this problem. Instead of needing each other’s trust, the blockchain has the transactions of the generals hashed in a way that cannot be altered. Meaning that if a general attempted to change the data in the blockchain, it will be rejected because of the difficult mathematical algorithms that were ran on the initial transaction data to verify that it is correct. In essence, if a piece of information is stored on the blockchain, it cannot be changed, therefore it is to be trusted.

The blockchain is basically a public ledger of all the transactions in the Bitcoin network, which is a cryptocurrency built along with the blockchain. Bitcoin is a digital currency that allows for use to transfer to other wallets/people online. The Bitcoin and blockchain are used together to achieve the end goal of using digital currency securely and without manipulation.

The way it works is, someone sends another person some Bitcoin, from one wallet to another. The transaction is first sent to the Bitcoin network to be verified, this halts the use of any of that money from the sender’s wallet, meaning they cannot reuse that money to send more people. So if the sender has 1 Bitcoin, they can only send or transfer 1 Bitcoin. Once the transaction is sent to the network, it will be verified using a series of difficult mathematical problems that are solved using a certain mechanism. The mechanism used in the Bitcoin blockchain is the Proof-of-Work, which involves using computers to solve these mathematical problems, in order to check in with different computers (or nodes) to ensure that they reach consensus and verify the transaction that was made. Once the transaction is verified, the sender will no longer have that 1 Bitcoin and the receiver has successfully received it.

I previously said that the data in the blockchain cannot be altered, except in , or mining, specific situations. Let us say that 3 of the 4 Generals were controlled by a king. They decided not to attack the enemy city while the 4th one did not know about the decision. The king ordered the 3 Generals and their armies to retreat. Because the majority of the “votes”, which are of the 3 generals, are leaning towards retreating, the outcome of this plan would be to retreat, even if the initial decision was to make an attack. This can be referred to as a 51% attack. This is when a single person or entity, controls at least 51% of the Proof-of-Work power which allows the alteration of the data and making it verified on the 51% of the nodes in the blockchain. And because the blockchain uses multiple nodes to verify a transcation, it votes on whether this transaction meets the correct criteria, then it gets the vote, if not, then it bascially fails. Just like if a president got 51% of the votes in an election, it is impossible for any other candidate to reach that percentage, therefore candidate with 51% votes wins the election.

This was an introduction to the basics of the blockchain and a little bit about Bitcoin. I will talk more about Bitcoin in the next article.

If you are interested in this topic, I recommend reading these two introductory books: This first one is a Chinese book that was translated to English. Some reviews on GoodReads wrote that they had difficulty understanding some of the English in it, but I personally had no problems. It is very simple and is filled with pictures, making it a fun and easy read: https://amzn.to/3HBCOSs

The second book explains lots of aspects in the Bitcoin and Blockchain technology, as well as many other technologies that use blockchain: https://amzn.to/3LgzGgW


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