Blockchain Technology Explained: A Decentralized Ecosystem
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Chapter-1: What Is Blockchain Technology?
Let’s start with the most basic question of all time – “What is definition of blockchain technology?” Well, blockchain technology is a distributed ledger system that promotes decentralization, transparency, and data integrity.
Does it seem confusing?
Let me explain blockchain technology in a simple way. Imagine multiple blocks that are connected in a chain-like a format. Here, all the blocks will be linked to the previous block and the block in front of it.
Moreover, all the blocks in that chain contain some form of data, and the chain represents the linking structure. In reality, every single block will link using the cryptography. Moreover, all the blocks in that chain will have a cryptographic hash ID along with transactional data and timestamps.
And so you end with a growing chain of blocks, and that is my friend what a blockchain is. You could think of it as a database that stores information in a unique way. But blockchain and databases are practically quite different in nature even though they both store information.
By default, blockchain technology does not support any modification of the data. So, any data that would go in the block can never get deleted or altered. Thus, it will stay there forever. Another significant fact about blockchain technology explained is that the network is a peer-to-peer network.
So, there is no centralized connection lurking in the shadows trying to steal your information. I mean, who wouldn’t like this much freedom, right?
Blockchain Technology Explained: How Does It Work?
Well, it’s time for you to know how the tech actually works in this blockchain guide. But before we begin, take a look at some of the important features to know about beforehand.Blockchain stored all the information in a ledger system. Moreover, any kind of data exchanges is called “transactions.” Previously blockchain was only meant for transacting digital currencies, but now it can even use other forms of data as well.
Every single user on the network is called “nodes,” and they get a copy of the updated ledger. Moreover, every node has a different way of communicating with each other. The system varies from blockchain to blockchain.
Now let’s begin the explanation of blockchain technology!
First of all, a user will request for a transaction in the network. Here, he/she will get two keys – public and private. But the user can only transact using the private key. And to find the other person you are sending money to you will need their public key.
Anyhow, after the request a block with all the information of the transaction gets created. In reality, everything in the block is encrypted to promote security.
Once it’s created, it will be broadcasted to all the nodes in the network. In blockchain technology explained you need verification from other nodes that what you claimed is valid. And so the other nodes use a consensus algorithm (I’ll explain what it is a bit later) to validate the information.
Once your block gets validated, the block will get a spot on the chain. At the same time, the transaction you did will be executed as well.
Understanding how it works doesn’t seem that much difficult now, does it?
Reference: https://101blockchains.com/blockchain-technology-explained/
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