What is Blockchain?

Blockchain is a distributed database technology that allows data to be distributed and recorded in an unalterable manner. In blockchain, data is stored in a chain of blocks, where each block contains a chunk of data.

Blockchain is commonly known as a distributed ledger technology used in Bitcoin and other cryptocurrencies, but it is actually used for various purposes. For example, the financial industry uses blockchain to improve transparency and reliability of transactions. Additionally, blockchain can be used to improve legal processes such as digital signatures for contracts and important documents.

The biggest advantage of blockchain is that it is a distributed database, unlike a centralized database, making it very difficult to alter data. As a result, transparency and reliability of data are improved, and security risks are reduced.

Blockchain is a type of distributed database. This means that by sharing information across multiple computers, it is possible to enhance reliability and security. Blockchain manages data by linking sets of information called “blocks”.

Structure of Blocks

Blockchain is a technology in which data is stored in a chain of blocks that are linked together. Each block contains multiple transactions, and blockchain is used to maintain a record of these transactions. The first block in a blockchain is called the Genesis block.

This article takes a closer look at the structure of blocks in a blockchain.

Overview of Blocks

A block is a fundamental data structure in blockchain and typically consists of the following elements:

• Header: Data used to identify information about the block.
• Transactions: Contains the details of the transactions.
• Block Hash Value: A unique identifier of the block used to confirm that the block’s data has not been tampered with.

Overview of Header

The header contains the following elements:

• Index: The index number of the block.
• Timestamp: The date and time when the block was generated.
• Nonce: A random value used to generate the block hash.
• Previous Block Hash Value: A unique identifier of the previous block and a reference to the previous block in the blockchain.
• Merkle Root: A hash generated by merging the hash values of all transactions in the block.

Transactions

Transactions made on the blockchain are called transactions. If used as a cryptocurrency, transactions include various information such as sender address, recipient address, amount of currency sent, and transaction fees, but the data held in transactions basically depends on the purpose. In this article, we will not define items within transactions to simplify the structure.

Overview of Transactions

Transactions are first registered in the transaction pool. Then, miners extract transactions from the transaction pool, insert them into new blocks, and register them in the blockchain, certifying the transactions.

Hash and Merkle Root

In blockchain, hash and Merkle root play a very important role. This article explains the overview of hash and Merkle root and provides a detailed explanation of how they are used in blockchain.

Overview of Hash

Hash refers to a function that generates a unique fixed-length value from data. The hash function always generates the same hash value for the same data and generates different hash values for different data. Hash values are usually represented as numbers or hexadecimal.

Hash functions play a very important role in blockchain. All transactions and blocks on the blockchain are assigned hash values. This ensures that all data on the blockchain is uniquely identified and verified to be unaltered.

There are various types of hash functions such as SHA-256 and RIPEMD-160. These functions can generate the same output for different inputs, but always generate the same output for the same input.

Use of Hash in Blockchain

In blockchain, hash plays an important role. Each block contains the hash value of the previous block. This ensures that all blocks on the blockchain are linked and uniquely identified.

In addition, all transactions on the blockchain are also hashed. If the content of a transaction is changed, a different hash value is generated, making it difficult to tamper with transactions.

Overview of Merkle Root

Merkle root is a data structure used in blockchain to combine the hash values of multiple transactions into a single hash value. Merkle root arranges hash values in a tree structure, and by storing the hash value of the root in the header of the block, it ensures the uniqueness of multiple transactions.

Merkle root is used for blocks that contain multiple transactions. The hash value of each transaction is placed on the leaf node, and the hash value of adjacent leaf nodes is calculated as the hash value of the parent node. By repeating this process, the hash value of the entire tree is set as the root.

Merkle root is used in blockchain to verify that transactions have not been tampered with. For example, if a transaction in a block is tampered with, the hash value of that transaction will change, and the hash value of its parent node will also change. As a result, the hash value of the root will also change, and the tampering will be detected.

The use of Merkle roots in blockchain

In the blockchain, the Merkle root is used as a data structure to consolidate multiple transaction hashes into a single hash value. It is important in detecting tampering of transactions in the blockchain. The Merkle root is a tree structure where transaction hashes are placed in the leaf nodes, and the hash values of adjacent leaf nodes are calculated as the hash value of the parent node. This process is repeated until the overall hash value is set in the root. If a transaction is tampered with, its hash value will be changed, and the hash value of its parent node will also be changed. As a result, the Merkle root hash value will be changed, and the tampering can be detected.

In blockchain, the SHA-256 algorithm is used to compute hash values. The SHA-256 algorithm is a cryptographic hash function that generates a fixed-length hash value from input data and is used to prevent data tampering.

Nonce and Difficulty

In a distributed network like a blockchain, multiple nodes compete to add a new block. To add a new block, they need to find the correct answer before their competitors. The value called “nonce” in the block header is used to find this answer.

The Overview of Nonce

Nonce is a part of the block header and is used to maintain the security of the blockchain.

Nonce can simply use a random value, but in that case, it is extremely rare for the block’s hash value to meet certain conditions, and mining the block becomes difficult. Therefore, the nonce needs to be adjusted so that miners can efficiently calculate the block’s hash value.

Use of Nonce in the Blockchain

Miners change the value of the nonce to make the block’s hash value meet certain conditions. This condition is called difficulty in the blockchain.

Overview of Difficulty

Difficulty is used to control the average speed at which new blocks are generated. For example, if blocks are generated too quickly, the network may become overloaded and transaction processing may not keep up. Conversely, if blocks are generated too slowly, transaction processing may become slow. Therefore, by adjusting the speed at which blocks are generated, the stability of the network can be maintained.

Use of Difficulty in the Blockchain

In the blockchain, in order to generate a new block, the “hash value” calculated from the block header must satisfy the “difficulty” condition.

Specifically, the hash value must contain a certain number of zeros at the beginning. The amount of these zeros is determined based on rules shared throughout the network, and the difficulty is adjusted accordingly. The difficulty adjusts the speed at which blocks are generated by adjusting the amount of computing power required to generate the hash value. In other words, if the difficulty is high, the amount of computing power required to generate the hash value increases, and the speed at which blocks are generated slows down.

Changing the difficulty level will affect the time it takes to mine a new block, but generally the difficulty is adjusted to ensure that an average of one block is generated every 10 minutes. This system is used in PoW (Proof of Work) blockchains such as Bitcoin.

Electronic Signatures, Public Keys, and Private Keys

In blockchain technology, cryptographic techniques such as electronic signatures, public keys, and private keys play an important role. In this article, we will provide an overview of electronic signatures, public keys, and private keys and how they are used in the blockchain.

Overview of digital signature

Digital signatures are used to ensure the authenticity and integrity of a document. Specifically, by applying a digital signature to a document, it can be verified that the document has not been tampered with and the identity of the signer can be confirmed.

Digital signatures are based on public key cryptography, which uses different keys for encryption and decryption, and consists of two keys: a private key and a public key.

Use of digital signatures in the blockchain

In the blockchain, digital signatures are used for transactions. Transaction data, such as the sender and recipient addresses and the amount of coins being sent, are included in transactions. The sender signs the transaction with their private key and sends it to the network with the signature.

Other nodes on the network can verify the sender’s signature using the sender’s public key. If the signature is correct, the transaction is approved and added to a block. This ensures the reliability and security of transactions on the blockchain.

Public Key and Private Key Overview

Public Key and Private Key are two cryptographically related keys that are essential to the security of asymmetric cryptography. The public key can be known by anyone, and the private key is known only by the owner.

In public key cryptography, encryption is done using the public key, and decryption is done using the private key. The sender encrypts a message using the recipient’s public key, and the recipient decrypts the message using their own private key. This method is secure even if the private key is leaked, making it more secure.

How public and private keys are used in blockchain

In blockchain technology, public and private keys are used in relation to transactions. Transactions are signed with the sender’s private key, which proves that the transaction was generated by the sender.

Furthermore, blockchain has a self-authentication function. This function verifies the identity of the sender based on the public key included in the transaction and the transaction signature. This method proves that the sender has legitimate ownership and the transaction is approved.

Security of Blockchain

Importance of Security in Blockchain

Blockchain is considered a highly secure system compared to centralized systems because it uses distributed ledger technology to store and manage the same data across multiple nodes. However, it is inevitable that attacks will be carried out against the important information held by blockchain. Although blockchain uses cryptographic techniques to ensure security, attackers constantly develop new attack methods and try to find vulnerabilities in blockchain.

The information held by blockchain includes transaction history and personal information, which is valuable to attackers. Therefore, the security of blockchain is very important and appropriate security measures are necessary.

51% Attack

A 51% attack is a method of attack on a blockchain that occurs when an attacker has more than 50% of the hash power on the network, enabling them to manipulate the blockchain.

In this attack, the attacker can manipulate the blockchain to accept blocks they generate by virtue of controlling more than 50% of the network’s hash power.

To prevent this attack, it is important to have a distributed hash power on the network. Moreover, this attack is considered to be very expensive, and it is difficult for an attacker to acquire more than 50% of the hash power easily.