In traditional systems, such as banking or government systems, all data is stored in a centralized database managed by one or more central nodes, such as a server or multiple servers belonging to a single organization. This means that this organization has complete control over and access to the data. For example, if you use a bank account, your bank controls all transactions and records. If something happens to the bank’s servers (e.g., they go down or are targeted by hackers), you may have trouble accessing your funds.
Blockchain completely changes this approach through decentralization. Instead of one central database, data is stored simultaneously on many nodes in the network – each node (or node) contains its own copy of the entire database, including the entire transaction history. This is an important point: the data is distributed among all participants in the network, and each plays an important role in ensuring the security and availability of the network.
Advantages of a decentralized system:
- Security: In traditional centralized systems, once an attacker gains access to a central server, they can manipulate all the data. In blockchain, to change data, a hacker would have to compromise most nodes in the network, which is virtually impossible in large decentralized networks.
- Resilience to failure: If one or more nodes fail, the blockchain network continues to function because data is duplicated across all nodes. This makes the blockchain resilient to system failures and external attacks.
- Transparency: Since all data is recorded on each node, every participant in the network can verify any transaction at any time. This creates a high level of trust, as the information is available to all participants and cannot be changed retroactively.
How does this work in practice?
When you send a transaction on the blockchain (e.g., transfer cryptocurrency), that transaction is broadcast to all nodes in the network. Each node verifies that the transaction is correct (e.g., whether you have a sufficient balance). Once the majority of nodes agree that the transaction is correct, it is added to the blockchain. In this way, network participants jointly decide and confirm each transaction, without having to trust any one central authority.
This decentralization approach allows blockchain platforms to be more secure, transparent, and resilient to external interference. However, it is important to note that decentralized systems can be less efficient in terms of transaction processing speed compared to centralized solutions, which is one of the pressing scalability issues in today’s modernблокчейнах.
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Nodes (nodes)
Nodes are the backbone of any blockchain system. Each node is a computer or device connected to the blockchain network that performs certain functions. Nodes can be thought of as the “pillars” of a decentralized network that keep it running, storing data and enabling communication between users.
There are several types of nodes in the blockchain, each of which plays a different role in keeping the network running:
1. Full Nodes: Full nodes store a complete copy of the entire transaction history of the blockchain. This means that they contain all information from the first block created to the last validated transaction. Full nodes verify every transaction and every block for correctness, which makes them important for the security and stability of the blockchain. An example is full nodes in the Bitcoin network.
2. Light Nodes: Light nodes do not store the full history of the blockchain. Instead, they contain only the block headers and data associated with their transactions. Lightweight nodes are mainly used to conduct transactions and interact with the network without consuming much storage resources.
3. Miners and validators: These nodes are involved in creating and validating new blocks in the blockchain. Depending on the type of consensus algorithm, blocks can be added either by miners (in Proof of Work systems) or validators (in Proof of Stake systems). Miners solve complex mathematical problems to add new blocks, while validators are chosen based on their share of assets in the system.
How do the nodes communicate with each other?
When a user submits a transaction, it first arrives at one of the nodes in the network. This node transmits information about the transaction to other nodes. All nodes check the transaction for correctness: whether the sender has enough funds, whether the transaction complies with the network rules, etc. Once verified, the transaction is included in a block, and this block is propagated throughout the network, updating copies of the data on all nodes.
Full nodes play a crucial role in securing the network as they are the ones that perform the verification of each transaction and block. Lightweight nodes, in turn, provide usability as they require fewer resources and can run on power-constrained devices such as smartphones.
Why is this important for decentralization?
The existence of multiple nodes makes blockchain networks more resilient to external attacks and disruptions. Even if some nodes fail, the remaining nodes can continue to support the network. The more nodes in the network, the more secure it is, as an attacker would need to control most of the nodes to manipulate the data.
Cryptography
Cryptography is one of the key technologies that ensures the security and immutability of data in blockchain. The main purpose of cryptography in blockchain systems is to protect data, authenticate it, and validate transactions.
| An element of cryptography | Description | Example of use |
| Hash functions | A mathematical algorithm that converts data into a unique fixed-length hash. | Used to create a block hash and link blocks in a chain. |
| Digital signature | A method for authenticating data using a pair of keys: a private key and a public key. | Confirmation of transactions using owner signatures. |
| Private key | A secret key, known only to the owner, is used to create a digital signature. | Creating a signature to send transactions. |
| Public key | A public key, available to all, is used to verify a digital signature. | Authentication of the transaction by other network participants. |
| Asymmetric encryption | A method of encryption that uses two keys: a private key and a public key. | Secure data transfer between network participants. |
| Consensus algorithms | Cryptographic algorithms that ensure consistency and security of data in a network. | Proof of Work (PoW), Proof of Stake (PoS). |
Basic cryptographic methods used in blockchain:
1. hash functions:
A hash function is a mathematical algorithm that converts any set of data into a unique set of fixed length characters. This set of characters is called a hash. A hash is a kind of “fingerprint” of the data: even a minimal change in the original data will change the hash. On the blockchain, hash functions play a key role in ensuring data immutability.
For example, each transaction on the blockchain is converted into a hash, which is then included in the block. This hash is used to chain blocks together: each block contains the hash of the previous block, making it impossible to change one block without changing all subsequent blocks.
2. Digital Signatures:
A digital signature is a cryptographic mechanism that is used to authenticate and validate transactions. In a blockchain, each transaction is signed by the sender’s digital signature. For this purpose, a pair of keys is used: a private key and a public key.
– Private key: This is a secret key that is known only to the owner and is used to create a digital signature. It must be protected and kept secure.
– Public Key: This is a public key that is available to other users on the network. It can be used to authenticate the digital signature and verify that the transaction was actually sent by the owner of the private key.
Digital signatures ensure that no one other than the private key owner can tamper with or alter the transaction.