March 19, 2021
What is blockchain?
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Blockchain 101 Cryptopedia

What Is Blockchain?

In general, as the name shows it’s a chain of blocks. A Blockchain is a type of diary or spreadsheet containing information about transactions. Basically, Blockchain makes users be able to send and receive data and information by using its network securely. Each transaction on blockchain network generates a string of numbers and letters called “hash”. Every hash is depended on the previous transaction’s hash and even a small change in a data or information of the hash affect the previous hash and creates completely a new one.

 

 

There are users on the network that referred as “nodes”. Every node has a copy of the blockchain on his computer. But what do nodes do on the blockchain? Basically, the nodes keep the network secure by checking the validity of each transaction. They make sure that nobody has been made any changes by inspecting the hash. Once a transaction is verified and approved by a majority of the nodes then its written and combined to a block.

By the end, the combination of blocks makes blockchain. The generation of blocks depend on the algorithms and protocols, for example it takes around 10 minutes to generate a new block on Bitcoin’s blockchain.

How does blockchain work?

To understand how does blockchain work, assume that two persons want to get connected using internet. Each person holds a private key and a public key. Person “A” use their private key and send data to person’s “B” public key. This transaction will spread through network. The transaction stores in a block as “hash”. As we mentioned above, there are nodes that are responsible to verify the transactions. The nodes process the data by solving complex mathematical problems using their computers or hardware which designed specifically for this purpose.

After the transaction got verified by nodes it gets add to the block and a new block is generated on the network. this process called mining. The node which could process the data faster and add the new block to the blockchain get some amount of crypto as block reward.

 Every data on the blockchain get stamped by date and time. Since that the data can not change or edit unless the majority of nodes verify the change.

When that new block added to the network, it becomes publicly available for everyone. Meanwhile, all nodes get updated constantly when a new block is added.

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