Immutable ledger and the Distributed Peer-to-Peer network makes blockchain what it is, a secure medium of storing information. Today, in our blockchain roadmap crash course, we will understand how the immutable ledger and the distributed network work.
You must have come across the word immutable in programming before. Immutable simply means something that cannot be tampered or changed. The blockchain is often referred to as an immutable ledger. Immutability adds an extra layer of security to blockchains.
The fact that blockchains are tamper resistant makes them an important and secure medium of data storage in applications like finance, where tampered data could result in huge financial losses.
A ledger, in simple words is just a book of records. A book that records transactions, events, data or anything of value. In case of the Bitcoin blockchain, the ledger is digital and records transactions from one party to another.
The reason why this ledger is secure is because the entries in this ledger are cryptographically linked to each other. So in case a malicious entity wants to change an entry in the ledger, the cryptographic linkage would force that entity to change all corresponding entries in the ledger. If this sounds confusing, you should check out this post on Hash Cryptography, where we talk about this in great detail.
Anyway, that task is computationally inefficient and would waste the malicious entity’s time and power. But what if someone has the time and power to change all the entries in the ledger?
Distributed Peer To Peer Network
Imagine someone has the time and computational capability and changes all the hashes of the chain. In such a scenario, the immutable ledger gives an additional element of security to the blockchain through its Distributed Peer to Peer Network. The blockchain network consists of thousands of nodes in different parts of the world. At any point of time, a copy of the ledger is stored on all these thousands of nodes in the world.
If the malicious entity wants to hack the blockchain, they will have to change the hashes of all the ledgers on majority of the nodes of the blockchain. And that too, at the same time instant. Currently, no single entity in the world has the computational power to change the ledger on thousands of nodes at the same time instant. And that makes the blockchain secure.
If the ledger on any single node is tampered, its neighbouring nodes come together and tell the node that the copy of the ledger it possesses is different from the copy all the other nodes have. And so, the tampered node reverts back to the previous unaltered state corresponding to the other nodes.