How Blockchain works?

January 01, 2016

Blockchain is a decentralized, distributed digital ledger technology that allows for the secure and transparent recording of transactions. It is a database that stores information across a network of computers, rather than on a single central server. Each block in the chain contains a unique set of data, and once added to the chain, it cannot be altered or deleted without altering the entire chain.

One of the main benefits of blockchain technology is its security. Each block is linked to the previous one through a cryptographic hash function, which makes it virtually impossible to tamper with or alter the data. Additionally, because the blockchain is distributed across a network of computers, it is more resilient to attacks than a centralized database.

Another key feature of blockchain is its transparency. Because every node on the network has a copy of the blockchain, it is completely transparent. This means that anyone can view the transaction history of any address on the blockchain, which can help to prevent fraud and increase accountability.

Blockchain technology is being applied in a variety of industries, from finance to healthcare to supply chain management, and is seen as a promising tool for increasing efficiency, reducing costs, and improving security and transparency.

How blockchain works?

Blockchain is a decentralized, distributed digital ledger technology that records transactions in a secure and transparent way. It works by creating a constantly growing chain of blocks, each containing a unique set of data.

Here’s a simplified overview of how blockchain works:

1. Transactions: Transactions are initiated by a user and broadcast to a network of computers (nodes) that are running the blockchain software. Each transaction contains information about the sender, recipient, amount, and any other relevant details.

2. Verification: Once a transaction is broadcast, nodes on the network compete to verify it using complex algorithms that require significant computational power. This process is called “mining.”

3. Validation: Once a block of transactions is verified by a node, it is added to the blockchain and broadcast to the rest of the network. Other nodes then validate the block and add it to their own copy of the blockchain.

4. Consensus: Because the blockchain is distributed across a network of nodes, there needs to be consensus among the nodes about which blocks are valid and which are not. This is achieved through a consensus algorithm, which ensures that all nodes agree on the state of the blockchain.

5. Security: Blockchain is designed to be secure because each block in the chain is linked to the previous one through a cryptographic hash function. This means that once a block is added to the chain, it cannot be altered without changing the entire chain.

6. Transparency: Because every node on the network has a copy of the blockchain, it is completely transparent. This means that anyone can view the transaction history of any address on the blockchain.

Overall, blockchain works by creating a decentralized, secure, and transparent ledger of transactions that is maintained by a network of nodes working together.