Lesson 3: Let's get an overview of blockchain.

Let's understand the overview of blockchain

As we learned in Lesson 1, blockchain is "a technology that allows any asset to be represented as cryptocurrency and managed in a way that does not require a third party and cannot be tampered with.

Let's unpack this one by one.

Alternative representation of assets as cryptocurrency

With blockchain, any asset can be managed as a cryptocurrency.

For example, money can be represented as cryptocurrency itself, and real estate such as land and houses can be managed on the blockchain by issuing a new cryptocurrency specifically for them.

This would, in theory, allow all assets to be managed digitally.

However, this would require some kind of mechanism to prove that the asset is tied to the cryptocurrency.

No Third Party Required

Another feature of blockchain is that there is no need for a specific administrator to manage any asset digitally.

If there is a specific administrator, there is a possibility that that administrator will commit fraud.

Since blockchains are managed by miners (nodes) who mine and are mined, the arbitrariness of a specific administrator can be eliminated.

Extremely difficult to tamper with

A blockchain does not need a specific administrator = there will be an unspecified number of administrators.

In this situation, the question may arise that managing with a blockchain seems to be more prone to administrator fraud.

However, there are a large number of nodes managing the blockchain, and all of them hold exactly the same asset data.

Therefore, even if any one node were to copy or falsify its own asset data, if the data is found to be different from that of all other nodes, it is designed to be eliminated.

In addition to mechanisms to prevent copying or tampering with assets, blockchains also have mechanisms to prevent the blockchain itself from being broken.

In order to destroy the blockchain itself, all of these nodes, which are the blockchain itself, must be destroyed at the same time, and it is physically impossible to destroy all of the nodes distributed around the world at the same time.

Let's learn how assets are moved in the blockchain

As we learned in the "Cryptocurrency" curriculum, you need a private key and a public key to move cryptocurrency (= assets).

The blockchain does not store cryptocurrency as it is.

What is recorded in the blockchain is the movement history of the cryptocurrency.

This is a necessary mechanism to achieve the high security performance of the blockchain, but we will learn more about it in future lessons.

In addition, this movement history can be viewed by anyone using a public key, but only you, as the holder of the private key, can actually move the cryptocurrency you own.

This mechanism is called public key cryptography, and we will learn more about it in a future lesson.

For now, just remember that the blockchain only records the movement history of the cryptocurrency, and that public key cryptography is required to view that history.