#What is Blockchain?
Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system.
A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain. Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger. The decentralised database managed by multiple participants is known as Distributed Ledger Technology (DLT).
Blockchain is a type of DLT in which transactions are recorded with an immutable cryptographic signature called a hash.
This means if one block in one chain was changed, it would be immediately apparent it had been tampered with. If hackers wanted to corrupt a blockchain system, they would have to change every block in the chain, across all of the distributed versions of the chain.
Blockchains such as Bitcoin and Ethereum are constantly and continually growing as blocks are being added to the chain, which significantly adds to the security of the ledger.
#What is Blockchain Hash?
A hash is a mathematical function that converts an input of arbitrary length into an encrypted output of a fixed length. Thus regardless of the original amount of data or file size involved, its unique hash will always be the same size. Moreover, hashes cannot be used to "reverse-engineer" the input from the hashed output, since hash functions are "one-way" (like a meat grinder; you can't put the ground beef back into a steak). Still, if you use such a function on the same data, its hash will be identical, so you can validate that the data is the same (i.e., unaltered) if you already know its hash.
- A hash is a function that meets the encrypted demands needed to solve for a blockchain computation.
- Hashes are of a fixed length since it makes it nearly impossible to guess the length of the hash if someone was trying to crack the blockchain.
- The same data will always produce the same hashed value.
- A hash, like a nonce or a solution, is the backbone of the blockchain network.
- A hash is developed based on the information present in the block header.
#How Does Hash Works?
Typical hash functions take inputs of variable lengths to return outputs of a fixed length. A cryptographic hash function combines the message-passing capabilities of hash functions with security properties.
Hash functions are commonly used data structures in computing systems for tasks, such as checking the integrity of messages and authenticating information. While they are considered cryptographically "weak" because they can be solved in polynomial time, they are not easily decipherable.
Cryptographic hash functions add security features to typical hash functions, making it more difficult to detect the contents of a message or information about recipients and senders.
In particular, cryptographic hash functions exhibit these three properties:
They are “collision-free.” This means that no two input hashes should map to the same output hash.
They can be hidden. It should be difficult to guess the input value for a hash function from its output.
They should be puzzle-friendly. It should be difficult to select an input that provides a pre-defined output. Thus, the input should be selected from a distribution that's as wide as possible.
#What is Smart Contract On Blockchain?
A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralized blockchain network. The code controls the execution, and transactions are trackable and irreversible.
Smart contracts permit trusted transactions and agreements to be carried out among disparate, anonymous parties without the need for a central authority, legal system, or external enforcement mechanism.
While blockchain technology has come to be thought of primarily as the foundation for bitcoin, it has evolved far beyond underpinning the virtual currency.
#How Does Smart Contract Works?
Smart contracts were first proposed in 1994 by Nick Szabo, an American computer scientist who invented a virtual currency called "Bit Gold" in 1998, fully 10 years before the invention of bitcoin. In fact, Szabo is often rumored to be the real Satoshi Nakamoto, the anonymous inventor of bitcoin, which he has denied.
Szabo defined smart contracts as computerized transaction protocols that execute terms of a contract. He wanted to extend the functionality of electronic transaction methods, such as POS (point of sale), to the digital realm.
In his paper, Szabo also proposed the execution of a contract for synthetic assets, such as derivatives and bonds. Szabo wrote: "These new securities are formed by combining securities (such as bonds) and derivatives (options and futures) in a wide variety of ways. Very complex term structures for payments can now be built into standardized contracts and traded with low transaction costs, due to computerized analysis of these complex term structures."
Many of Szabo's predictions in the paper came true in ways preceding blockchain technology. For example, derivatives trading is now mostly conducted through computer networks using complex term structures.
#What is Smart Contract Audit?
A smart contract audit is an extensive methodical examination and analysis of a smart contract’s code that is used to interact with a cryptocurrency or blockchain. This process is conducted to discover errors, issues and security vulnerabilities in the code in order to suggest improvements and ways to fix them. Generally, smart contract audits are necessary, because most of the contracts deal with financial assets and/or valuable items.
Such checks are complex, as smart contracts often interact with each other and any integrations with third-party systems can also result in making the system vulnerable. Because of this, the checks are often expanded to other smart contracts involved in any interactions, and even those that the ones it interacts with are interacting with. Such checks usually include both running tests and manual code analysis.
Smart contracts often manage huge quantities of funds and a single bug or vulnerability can result in great losses. More precisely, the users and stakeholders of the decentralized application in question could lose all the assets that are part of the ecosystem.
The recommendations made by the auditors are conveyed in advance to the project team and their actions in response are noted in the final report. It is considered a mark of authenticity and integrity for the project. For that reason, teams are keen on getting an audit to win user confidence and raise the project’s credibility. These audits are typically carried out in several steps.
The initial step is the team and the auditing group agreeing on the scope and specifications of the audit. It means that the design, purpose, architecture and other details of the smart contract are given to the auditors. Next is the testing phase, where the auditors test the individual functions (unit tests) and then larger parts (integration tests).
Automated bug detection and analysis tools are also used to look for commonly known vulnerabilities in the contracts. Finally, auditors manually inspect the code to understand the developer’s intentions and interpret the findings in that context. Finally, the report is issued with the findings and the applied fixes by the team.
Some Questions About Blockchain!
1.Can Hackers Hack Blockchain?
- No. It's Encrypted. No One Can Hack The Blockchain. If Anyone Needs to Hack The Chain, He Needs to Hack The Whole World Computer Network. Cz, All The Block And Hash Is Procced In Real Time to The Whole World.
2. So, Blockchain Is Transperent?
- Yes, It's Transparent. You Can See All The Activity Happening On Blockchain.
3. Can I Trust Blockchain Technology?
- Yes, You Can Easily Trust Blockchain Technology.
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