Question 5 of 10 how does a block of data on a blockchain get locked?
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Blockchain technology is rapidly changing the way we store and share data across various industries, from finance to healthcare.
What is a Block in a Blockchain?
A block in a blockchain is a collection of transactions or other data that has been verified by nodes in the network. Each block contains a unique hash value that links it to the previous block, creating a chain of blocks. These blocks are then stored on different nodes across the network, ensuring that no single entity controls the entire blockchain.
When new transactions occur on a blockchain, they are broadcast to all participating nodes in the network. Nodes then verify the transactions to ensure they are valid and meet certain criteria, such as having sufficient funds or meeting specific business rules. If the transaction is verified, it is added to a block, along with other approved transactions.
Once a new block has been added to the chain, the data within it is considered locked or permanent. This means that once data is stored on a blockchain, it cannot be easily altered or deleted. However, this does not mean that the data is completely secure. While it’s difficult to alter or delete data from a blockchain, there are still ways to compromise the security of a blockchain network.
How Does Blockchain Lock Data?
Blockchain locks data through cryptographic techniques and consensus mechanisms. These two mechanisms work together to ensure that all nodes in the network agree on the state of the blockchain and its contents.
Cryptographic Techniques:
The first mechanism used by blockchain to lock data is cryptography. Cryptography is a method of securing information by transforming it into an unreadable format that can only be deciphered with a specific key or password. Each block in a blockchain contains a unique hash value, which is generated using a complex algorithm and the data within the block.
When new transactions are added to a block, they are verified by nodes in the network. If the transaction meets certain criteria, it is added to a block and given a unique hash value. The hash value is generated using the data within the block, including the previous block’s hash value. Once a new block has been added to the chain, its contents are considered locked or permanent, as any attempt to change the data within the block would result in a different hash value being generated.
Consensus Mechanisms:
The second mechanism used by blockchain to lock data is consensus mechanisms. Consensus mechanisms are protocols that allow nodes in a network to agree on the state of the blockchain and its contents. There are several types of consensus mechanisms, including proof-of-work (PoW), proof-of-stake (PoS), and delegated proof-of-stake (DPoS).
In PoW, nodes in a network compete to solve complex mathematical problems in order to validate transactions and add them to a block. Once a block has been added to the chain, its contents are considered locked or permanent. In PoS, nodes in a network are chosen to validate transactions based on their stake or ownership of cryptocurrency within the network. In DPoS, nodes in a network are chosen to validate transactions based on their reputation and performance within the network.
The consensus mechanism used by a blockchain network determines how quickly new blocks are added to the chain, as well as how difficult it is for an attacker to compromise the network. For example, PoW networks like Bitcoin take much longer to validate transactions than PoS networks like Ethereum or DPoS networks like EOS.
Case Study: Mt. Gox Hack
One of the most famous examples of a blockchain network being compromised is the Mt. Gox hack in 2014. Mt. Gox was a bitcoin exchange that was hacked by an unknown entity, resulting in the loss of over $500 million worth of bitcoin. The hack occurred because the Mt. Gox network used a centralized consensus mechanism, which made it vulnerable to attacks by a single entity.
