Interacting with Distributed Ledger and Tokens + Get 100SP Delegation with YOUR comment!

Hi all,

This is part 2 of my explanation of interacting with the basics of blockchain. You should check out my last post in order to understand this one. For part 1, see: https://steemit.com/bitcoin/@ddangerwu/learn-by-interacting-with-hash-blocks-and-blockchain-get-100sp-delegated-for-insightful-comments

Disclaimer: I did not make the website used in this explanation. It was made by Anders Brownworth and you should check him out at https://anders.com

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So last time we ended with explaining what is Hash, Blocks, and Blockchain, now let's talk about how we can make it useful.

First we need to secure blockchain by giving the same copy to lots of people. This is what it means to have a "distributed" blockchain. Notice that everything in all three chains are exactly the same: data, nonce, and hash.

If one peer changes his chain, it will be very obvious to the entire network that his chain does not "follow the rule". But what happens if peer C changes his chain then mines it so that it follows the rule?

As you can see, now peer C's chain is once again following the rule but his hash is different. Block 2 hash of Peer A and B is 000012fa... while peer C's block 2 hash is 0000860d... So, this is how we have the conclusion that "blockchain is secure because if you change any middle block's data, you'd cause every subsequent block to be invalidated. This is how we can be sure everything is tamper-proof just by verifying the latest block." (see part 1 post for details)

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Next, let's change the data to a ledger to create a token.

As you can see, creating a ledger on the blockchain is simply changing the data to a list of A transfer to B some X amount. What is important to note is that block size or number of transfers within each block does not have to be consistent. This explains why Lightning Network works in that blocks can be small and only refers to the full ledger elsewhere. see my video on Lightning for details: https://steemit.com/bitcoin/@ddangerwu/understanding-lightning-in-simple-terms-and-what-it-means-for-you-get-100sp-delegated-to-you

Lastly, a new address, maybe one created by an exchange, will give you an initial amount and your balance will be deducted from this initial balance. This is how the Bitcoin network validates your transactions. It actually will go back up each transaction to see where the money came from.

To understand how this works, we will talk about output vs inputs, private vs public keys, and the relationship between some more advanced topics. Stay tuned.

-Dan Wu

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Now that you've watched the vid, what did you think? I want to do my part to fight spam and promote insightful comments/discussions. I read every comment and value your feedback. Write something and I will pick the most insightful comment to delegate 100 Steem Power to you for a week.

You may earn curation awards using my STEEM manually OR use a service like SmartSteem to vote automatically for you.

Here is last post's winner: