LIVEWhat is blockchain Technology?
How it works?
Blockchain technology is a decentralized and distributed ledger system that records transactions across multiple computers in a secure and transparent way. It consists of a chain of blocks, each containing a list of transactions. Once a block is filled, it’s linked to the previous one, forming a chain. The decentralized nature enhances security and reduces the risk of manipulation. Blockchain is the underlying technology for cryptocurrencies like Bitcoin and has various applications beyond digital currencies, such as smart contracts and supply chain management.
How it works?
Blockchain works through a decentralized network of computers, often referred to as nodes. Here’s a simplified overview of how it operates:
1. Transactions: Participants in the network initiate transactions. These transactions are gathered into a block.
2. Verification: Before a block is added to the chain, the information within it must be verified by the network. This is usually done through a consensus mechanism, like Proof of Work (used in Bitcoin) or Proof of Stake.
3. Block Formation: Once verified, the block is added to the existing chain in a linear, chronological order. Each block contains a reference to the previous block, forming a chain.
4. Decentralization: The blockchain is maintained by a decentralized network of nodes, each having a copy of the entire blockchain. This prevents a single point of control or failure.
5. Consensus: Consensus mechanisms ensure that all nodes agree on the validity of transactions and the order in which they are added to the blockchain.
6. Immutability: Once a block is added to the blockchain, it is nearly impossible to alter its contents. This is due to the cryptographic links between blocks and the distributed nature of the network.
This design ensures transparency, security, and trust in the absence of a central authority.
