Blockchain promises to produce a shift in the current computing paradigm because it has the potential to become the infrastructure catalyst for the creation of decentralized applications. The Blockchain is being seen as the next-step evolution from distributed computing architectural constructs, to a global database of data and interfaces, integrating all kinds of machines and sources of data.
Four underlying concepts in Blockchain are:
- Decentralized databases applications consensus.
- Smart contracts.
- Proof of Stake(PoS).
As we all know blockchain technology started with the bitcoin. Bitcoin is a peer-to-peer electronic payments system, also known as a cryptocurrency, that allows people to make instant, anonymous transactions online.
The unique characteristic of bitcoin is that it records every single transaction made on its network in a public record. This is known as the “blockchain”. A new blockchain is created every ten minutes. That blockchain is afterward shared throughout the network. The chain is constantly growing because each completed “blocks” is added to the public ledger. There are an infinite number of blocks on the blockchain because as soon as one block gets completed, another is automatically generated.
2. Decentralized Databases Applications Consensus
Blockchain’s potential for the development of decentralized database applications consensus is based on the unique characteristics of the technology, as outlined previously.
A decentralized scheme, on which the bitcoin protocol is based, transfers authority and trust to a decentralized virtual network and enables its nodes to continuously and sequentially record transactions on a public “block” creating a unique “chain”: this is the inception and keywords genesis for blockchain.
3. Smart contracts
A scaled blockchain is something that starts proving a new global (somehow still science fiction) ecosystem. For this, the smart contracts are the building blocks for decentralized applications.
Smart contracts are contracts whose terms are recorded in a computer language instead of legal language. Smart contracts can be automatically executed by a computing system, such as a suitably distributed ledger system.
4. Proof of stake
Proof of stake (PoS) is a method by which a cryptocurrency blockchain network aims to achieve distributed consensus. While the proof of work (PoS) method asks users to repeatedly run hashing algorithms or other client puzzles to validate electronic transactions, proof-of-stake asks users to prove ownership of a certain amount of currency (their “stake” in the currency). Peercoin was the first cryptocurrency to launch using proof-of-Stake. With Proof of stake, the probability of mining a block depends on the work done by the miner (e.g. CPU/GPU cycles spent checking hashes).
In this Toptal blog by Nermin as few more basic concepts around the Bitcoin – Crypto currency is covered https://www.toptal.com/bitcoin/blockchain-technology-powering-bitcoin