Is Blockchain an incorruptible ledger?
A ledger is a record-keeping system used to track and document transactions. It captures financial activities such as purchases, sales, transfers, and other relevant information. The primary function of a ledger is to maintain an accurate and transparent account of financial events, providing an essential tool for businesses, organizations, and individuals to manage and monitor their economic interactions.
Blockchain as an incorruptible ledger
Blockchain is a distributed digital ledger that records transactions across multiple computers or nodes. The following are the main features that make blockchain an incorruptible ledger:
Distributed structure
One of the key aspects contributing to the incorruptible nature of blockchain is its distributed structure. In a blockchain network, the ledger is replicated and maintained across multiple nodes or computers. Each node in the network holds a copy of all the blockchain records.
The distributed nature of blockchain enhances its resistance to corruption as there is no single point of control. This decentralized architecture makes it difficult for any single entity or group to manipulate or corrupt the data stored in the ledger. Even if some nodes become compromised, the network can continue functioning and maintaining the ledger's integrity.
Let's assume a blockchain network with three people: Sam, Ben, and Amy. Each person maintains their own copy of the ledger, which is replicated across all nodes in the network. Now, if Ben tries to change the first entry maliciously "Ben has $40" to "Ben has $50" in his copy of the ledger, his actions will be identified and rejected by the other nodes in the network when they compare their copies of the ledger.
When Sam and Amy compare their copies with each other, they will notice that their versions of the ledger agree, showing that the first entry is indeed "Ben has $40." Since the majority of the ledgers in the network (i.e., two out of three) reflect the original entry, Ben's attempt to alter the ledger will be exposed as fraudulent.
Any attempts to tamper with the data or introduce fraudulent changes would require malicious actors to control the majority of the network's copies, known as a 51% attack.
Consensus mechanisms
Consensus mechanisms play a crucial role in maintaining the incorruptible nature of blockchain. These mechanisms ensure that all participants in the network agree on the validity of transactions and the order in which they are added to the blockchain. They aim to ensure that most participants agree on the state of the blockchain.
For example, Proof of Work is a consensus mechanism, which requires a significant amount of computational power. This makes it extremely difficult for malicious actors to alter the blockchain.
Chaining by cryptographic hash functions
Chaining by cryptographic hash functions is a fundamental tool in blockchain technology that contributes to the incorruptible nature of the system. When a block is created in the blockchain, it contains a hash value that represents the data within the block. This hash value is also used to reference the previous block, creating a chain of blocks.
If someone attempts to modify the data in a block, the hash value of that block would change which breaks the link to the subsequent blocks. This link breakage is identified and hence the incorruptible nature of blockchain is ensured.
Conclusion
The distributed structure of blockchain, coupled with consensus mechanisms and cryptographic hash functions, forms the foundation for its incorruptible nature. These elements work together to create a secure, transparent, and tamper-resistant system, making blockchain a promising technology for various applications.
