blockchain technology

A blockchain is a type of distributed ledger which shared across a business network. Blockchain stores all records (blocks) and hence the name. A Blockchain network provides a mutually trusted, transparent way of sharing and transacting. The transactions on business are permanently stored in sequential, append-only, tamper-evident blocks to the ledger. All the validated transaction blocks are hash-linked from the genesis block to the most current block, hence the name blockchain. Bitcoin implemented blockchain technology firstly. Bitcoin is an electronic currency which created to solve the problems of trust, transparency, and accountability between two parties in exchanging money for goods and services over the internet.

Basic working theory of blockchain technology

As there are many implementation of blockchain concepts most of them use the most popular network, Bitcoin. For third party such as a financial institution, to mediate transactions, member nodes in a blockchain network uses consensus protocol to agree on ledger content, and cryptographic hashes and digital signatures to make sure that the integrity of transactions.You can read also about virtual reality vs augmented reality

For understanding the working of blockchain should know about blocks and transactions.

Block: Block is a group of valid transactions identified by a hash, a unique, random value determined by a proof-of-work

Transaction: A transaction contains information about bitcoins transferred between people.

Then we have to know about consensus, cryptographic hashes and digital signatures.

Consensus: It is ensuring the shared ledgers are exact copies, and lowers the risk of fraudulent transactions, because tampering would have to occur across many places at exactly the same time.

Cryptographic hashes: It is ensuring that any alteration to transaction input results in a different hash value being computed, which indicates potentially compromised transaction input.(eg:SHA256 computational algorithm)

Digital signatures: It ensuring that the transactions originated from senders and not imposters.

Blockchain network prevents any single participant or group of participants from controlling the underlying infrastructure or undermining the entire system. Participants are all equal, adhering to the same protocols. The participants can be individuals, state actors, organizations, or a combination of all these types of participants.These only the basic about the working of blockchain technology. This technology solves specific kind of problems in which security and reliability are critical. Blockchains performing transactions without any intermediaries and trust between parties.

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