Do you know that several components make up a Blockchain System?
These components work together to create a
•Secure
•Transparent and
•Decentralized System that can accommodate various applications and use cases.
Now, Let's Dive In
🌟Blocks:
A block is a collection of data that contains a list of transactions.
Each block typically includes a unique identifier called a hash, a timestamp and a reference to the previous block in the chain.
🌟Chain:
The chain refers to the sequential arrangement of blocks.
Each block in the chain is linked to the previous block through hash references creating a decentralized and tamper-resistant ledger.
🌟Nodes:
Nodes are individual computers or devices that participate in the blockchain network.
Each node maintains a copy of the entire blockchain and validates transactions and blocks.
🌟Consensus Mechanism:
A consensus mechanism is a set of rules or algorithms that enable nodes in a blockchain network to agree on the validity of transactions and reach a consensus on the state of the blockchain.
Common consensus mechanisms include Proof of Work (PoW) and Proof of Stake (PoS)
🌟Cryptography: This means that Blockchain relies on cryptographic techniques to secure and authenticate transactions
Public-key cryptography is often used to create digital signatures and ensure the integrity of data.
🌟Smart Contracts: Smart contracts are self-executing contracts with predefined rules encoded on the blockchain.
They automatically execute transactions when certain conditions are met
Eliminating the need for intermediaries.
🌟Distributed Ledger: The blockchain is a distributed ledger
Meaning that it is maintained and updated by multiple nodes in a decentralized network.
This ensures
•Transparency
•Immutability and
•Resilience
against single points of failure.
🌟Wallets:
Wallets are digital tools that allow users to store and manage their blockchain assets such as cryptocurrencies.
Wallets generate and store private keys,
which are essential for accessing and transacting with blockchain-based assets.
🌟PoW-based blockchains):
In Proof of Work (PoW) blockchains like Bitcoin mining involves solving complex mathematical puzzles to validate transactions and add new blocks to the blockchain.
Miners compete to solve these puzzles and the first one to find a solution is rewarded with newly minted cryptocurrency and transaction fees. #cryptocurrency
