Blockchain is a decentralized digital ledger technology that records transactions across many computers in a way that the registered transactions cannot be altered retroactively. Here's a simplified breakdown:
Core Concepts
- Decentralization 🌐: No central authority controls the network. Instead, it relies on a distributed network of computers (nodes) to validate and store data.
- Blocks 💻: Data is grouped into blocks, each containing a list of transactions, a timestamp, and a reference to the previous block (hash).
- Chain 🔗: Blocks are linked in a chronological sequence, forming a chain. Each new block is added to the end of the chain.
How It Works Step-by-Step
- Transaction 📝: Users initiate a transaction (e.g., sending cryptocurrency).
- Verification 🔍: Nodes validate the transaction using consensus algorithms (e.g., Proof of Work, Proof of Stake).
- Block Creation 🧱: Valid transactions are bundled into a block.
- Hashing 🔐: Each block is assigned a unique cryptographic hash, ensuring data integrity.
- Chain Addition 🔄: The block is added to the blockchain, creating a permanent and unalterable record.
Key Features
- Transparency 📊: All transactions are visible to network participants.
- Security 🛡: Cryptographic techniques and decentralization make it highly secure.
- Immutability 📜: Once a block is added, it cannot be changed without consensus.
For a deeper dive into blockchain concepts, check out our Blockchain Overview Guide.