Blockchain Demo - Part 2

Hi! In this lecture, I'm going to talk about blockchain technology.

What is a Blockchain?

A blockchain is essentially a chain of blocks. Each block contains data and the hash of the previous block. For the very first block, called the Genesis Block, the previous hash is just a series of zeros since there's no block before it.

When we look at the second block, it includes the hash of the first block. For example, if the first block's hash starts with 01578, the second block records that hash. This structure applies throughout the entire blockchain.

Tampering with Blockchain Data

Suppose you have nefarious intentions and download the blockchain to your own computer. You might think you can simply change the data. Let's say you alter the content of a block—for instance, you replace its data with "Hi".

Once you do this, the hash value changes, which means you now need to re-mine the block to get a valid hash again. After successfully mining, everything might seem okay.

But here's the catch: if you go ahead and change a third block, the chain breaks again because the next block still has the hash of the original block. You’ll now need to re-mine every block that comes after to maintain consistency.

This process may seem to make everything look valid—but it shouldn't work like that, right?

The Illusion of Control

You might think, "I can manipulate this blockchain on my local machine and make it look valid." For instance, if one block says you sent 1 Bitcoin to SG, you could edit it to say 2 Bitcoins, re-mine it, and then continue mining the rest of the chain.

On your machine, it would look perfect.

Enter: Distributed Systems

This is where distributed systems become essential.

Let’s say we have the same blockchain running on multiple peers: Peer A, Peer B, and Peer C. These are nodes—the miners and users who store the blockchain independently.

If you change something on your local blockchain and re-mine it, your version might look valid. But when comparing your latest hash (say, d160...) with Peer B (e4b9...) and Peer C (e4b9...), you'll see discrepancies.

These peers act as verifiers. Since you don’t control their blockchains, they can spot the inconsistency. Now imagine thousands of nodes—it becomes practically impossible to alter every single one to match your tampered version.

Trust in a Trustless System

This setup is what makes blockchain trustless yet secure.

• Peer B doesn’t know Peer C personally.
• Yet they can trust the system because all nodes independently verify the data.
• If someone tampers with their copy, others will immediately reject it due to the hash mismatch.

So, if you really wanted to hack the system, you’d need to control 51% of the nodes—which is an enormous and almost impossible task in practice.

Looking Ahead

So far, we’ve dealt with data examples, but in the real world, blockchains store transactions.

In the next video, we’ll explore what happens when you send digital assets like Bitcoin from one person to another.