In simple words, we can say that the blockchain is just a chain of blocks that stores information about transactions like date, time, and value of your most recent purchase, but that’s not enough about blockchain. Let’s starts with the basics: what is blockchain technology
What is Blockchain Technology?
A blockchain is a growing list of records which is known as blocks, that are linked to each other using cryptography. Each block contains a hash value of the previous block, timestamp, and transaction data. Many crypto news providers always try to provide you updated news about blockchain technology. The blockchain network has no central authority. it is the perfect example of a democratized system. Since it is a shared and immutable public ledger, the information in it is open for anyone to see.
How does Blockchain Technology Work?
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Step-1: A node starts a transaction by first creating a wallet and then digitally signing it with its private key. A transaction represents the transfer of value between users on the blockchain network. Transaction data structure generally consists of some logic of transfer of value, source and destination addresses, and other relevant information.
Step-2: The requested transaction is broadcast to the peer-to-peer network, consisting of thousands of computers.
Step-3: The P2P network validates the transaction and status based on pre-set criteria using the advanced algorithms.
Step-4: Once the transaction is verified by the network, it is combined with others to create a new block for the ledger.
Step-5: Here the newly-created block now becomes part of the ledger, and the next block links itself cryptographically back to this block. This link is a hash pointer.
Step-6: Every time a new block is created. Generally, few confirmations are required to consider the transaction final.
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Why Use a Blockchain?
Blockchain is a software product that allows storage and conversion of data via the Internet, securely and transparently without a central governing body. It is a platform that completes transactions without involving a third party. the greatest advantages of blockchain are traceability.
Throughout this blockchain magazine, you were introduced to the detail concepts of Blockchain technology. Bitcoin is the first implementation of blockchain technology. Nowadays, the cryptocurrency world has found applications of blockchain technology in several industries, where the trust without the involvement of centralized authority is desired.