Let’s say, you would take the help of internet banking to send an amount from your bank to another account, and your transaction gets recorded. That seems simple but the problem with this is often overlooked as such transactions are easily manipulated. here, it is important to know how blockchain works.
Although people who know the risk of such transactions refrain from using them, still third-party payment apps are getting a lot of popularity. The focus of this article is What is Blockchain technology and how blockchain works.
“Blockchain technology is a networked framework that keeps transactional records in several databases connected by peer-to-peer nodes.” Blocks in the blockchain contain specific information and the series of such blocks is called the blockchain. A transaction of money, for example, contains the data of the total amount along with the information of the sender and receiver. This blockchain could be as long as you want it to be, up to an infinite number of blocks.
As blockchain impacts other technologies, it is also called meta-technology.
1.It all starts with a request for a transaction
2.The transaction request is broadcasted to a P2P network
3.Well-known technologies are used to validate the transaction
4.The new block gets added to the chain at the end of the transaction
Let’s dive a little deeper into how blockchain works:
Each block in the blockchain is connected to one before and one after the block and contains the specific hash of the block.
A hash is a number that is unique to each Block. Hash behaves like a unique fingerprint. Even minor changes in the block would alter the hash as well. As a result, the Hash is extremely useful for detecting intersectional changes. Changing hash means changing identity of the block.
Each Block contains Data, Hash, and the Hash of the Block before.
In the blockchain mentioned above, there is no antecedent to the first Block. Apart from the valuable information, the block contains the Hash of the respective block and the hash of the previous block. By doing so, the security of the blockchain is ensured.
Let’s consider a scenario, a hacker makes changes in the data of a block and due to that, the hash of that block will be changed. Now, the preceding block containing the hash of the previous block will remain unchanged and would become inaccessible as it doesn’t contain the hash of the hacked block.
What if someone modifies the Hash of one Block and recalculates the Hash of all other blocks, making all other blocks valid again? That lead to the introduction of Proof of work.
Proof-of-Work is a solution to the issue of a hacker recalculating the hash of all the other blocks. It’s a mechanism that makes the building of new blocks take longer.
Blockchains use an approach to safeguard themselves: by being distributed. Blockchain does not rely on single body administer, rather it relies on peer-to-peer network that can be joined by anyone with access. A joining user, while joining the network, will receive a copy of the blockchain. Each device is considered a node.
When a user adds a new block, this fresh Block is distributed to all network users. Each node verifies the blocks in case they are tempered and then added to blockchain after getting rectified. They have agreed on which blocks are genuine and which are not. Blocks tampered with will be rejected by the network’s nodes.
These were the ways how blockchain works with the help of different components keeping the records within the blocks safe.
Since its beginnings, blockchain has come a long way. Presently, version 1.0 is accessible for cryptocurrencies, version 2.0 is available for Smart Contracts, and version 3.0 is available for Decentralized apps. Given the current demand for the technology, it may exceed the possibilities of known usage. It may even upgrade with the innovations and trends that blockchain supports. To read more about the modern technologies that are revolutionizing the way we see the world, subscribe DevTechToday, and stay updated with the latest articles and be the first to read.