How exactly does blockchain work?


Last Update 2 år siden

Blockchain provides the record-keeping capability as traditional databases, but without the centralized architecture. But the question arises how can one be sure that a transaction is legal when there is no central authority to examine it? Blockchains address this issue by decentralizing the ledger and distributing copies to each user. Anyone can request that a transaction be added to the blockchain, but transactions are only allowed if all users agree that they are legitimate. This verification is carried out reliably and automatically on behalf of each user, resulting in a wonderfully tamper-proof ledger system.

When a new block is added to the chain, the ledger maintained by all users is updated. Users will only accept a fresh block when all of its transactions have been verified to be legitimate. If there is a discrepancy, the block is denied. Otherwise, the block is inserted and will remain there as a public record for the rest of the time. It cannot be removed by any user. While destroying or altering a traditional ledger requires an assault on the middleman, doing so on a blockchain necessitates simultaneous attacks on all copies of the ledger. There can't be a 'fake ledger,' because each user has their own authentic version to compare. Trust and control in blockchain-based transactions are not centralized and black-boxed, but decentralized and transparent.

How does a transaction make its way into the blockchain?

Step 1: A transaction is requested by someone. Cryptocurrency, contracts, records, or other information could be involved in the transaction.

Step 2: With the help of nodes, the requested transaction is broadcast to a P2P network.

Step 3: The transaction and the user's status are validated by the network of nodes using well-known algorithms.

Step 4: The new block is then added to the old blockchain once the transaction is completed. In a way that is both permanent and unchangeable

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