Blockchain Technology: What is it and how does it work?
Although this is a very old topic, people’s interest in Bitcoin and the popularity of cryptocurrency has increased and the interest in this blockchain technology has increased. This is because Bitcoin or most other cryptocurrencies operate on this blockchain technology. So to know what cryptocurrency is and how it works, first of all you have to know about the technology behind it. So today we will discuss the technology behind this cryptocurrency, what is blockchain and how it works. I will try to explain this complete blockchain technology in a little simple language and in a few words.
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What is a blockchain?
First of all, take a closer look at this term. Only then will you get a basic idea of what this name actually means. Blockchain means a chain made of blocks or a chain of blocks. We all know what a chain is. A chain is a combination of many of the same materials, as well as the addition of one to another. Think about it, the term blockchain means to create a chain of blocks by connecting many blocks to one another. Well, the blocks that make up this chain basically store information. Blockchain technology has been around for a long time and is being used in many cases. But the general public’s interest in this technology was created mainly after the invention of a cryptocurrency called Bitcoin in 2009. Technically, a blockchain is a distributed laser that is open to everyone. When data is entered between blocks in a blockchain, it is almost impossible to delete that data or make any changes to it. But how?
Alright, to know this you must first know what is in each of these blocks. Every single block in a complete blockchain consists of basically three things – data, hash, and hash of the previous block in the chain. That is, each block in the blockchain contains the block’s own data, the block’s own hash, and the hash of the previous block attached just behind it. Got the data, but what is the hash thing? Hash is basically an identifier. The hash of each block is it’s own and specific to each. That is, the hash of two blocks can never be the same. This is a lot like a human fingerprint. Just as the fingerprints of two people can never be the same, the hash of two blocks can never be the same. And these hashes are generated according to the data stored in each block. This means that if the data of a block is changed in any way, then the hash of that block will also change. Now think about why each block has a hash of its previous block. If each block also contains the hashtag attached to it, then no one will be able to change the data of any block at will. So it is almost impossible to delete or change every data entered in the blockchain. Because, in this case, if you want to change the data in a block, then you have to change the data of all the previous blocks with that block, otherwise the entire blockchain will be invalidated or will not work anymore.
How does blockchain work?
By now you must have understood how blockchain technology ensures security. But another big reason blockchain is secure is because its network is distributed. Blockchain basically creates a P2P network where the data of each block of the blockchain can be verified by any person connected to the Internet. When a newcomer registers to this blockchain network, he gets a copy of all the blocks in front of him and his previous ones, and he verifies each block and makes sure that all the data in the blockchain is still correct. The more times each block in a blockchain is verified, the more unchanging the data becomes. This is basically how blockchain technology continues to advance. We all know that bitcoin transactions are based on blockchain technology. Let’s see, how does it work?
Suppose you have 5 bitcoins and you want to send me 2 bitcoins from there. In that case this amount will be transferred from your wallet to my wallet. When you send the bitcoin to my wallet address, a new block will be created in the blockchain with all the details of this transaction. The data of this block will be the sender i.e. your wallet address, the receiver i.e. my wallet address and the amount of bitcoin you will send. This time this new block will come in front of everyone connected to the blockchain to verify. When they all verify this block or confirm that everything is OK, this transaction record will remain permanently in the blockchain and the transaction will be completed. In the case of Bitcoin, those who do the work of verifying this block are called Bitcoin Miners. And, most of the fees you have to pay to process this transaction will go to Bitcoin Miners, who have mined Bitcoin using their hardware or verified this block. Now you must have got a clear idea of how blockchain works and why miners can earn bitcoin by mining bitcoin.
Cryptocurrency Fact: Do you know why every bitcoin transaction process usually takes a minimum of 10 minutes? This blockchain is also the reason. In the case of bitcoin transactions, each new block is created every 10 minutes for security reasons. So when you request a transaction, you have to wait 10 minutes to create a new block with that transaction.
Hopefully, I have simply explained in a few words what blockchain is and how it works. I am ending here like today. I hope you like today’s article. If you have any questions or comments, please let us know in the comments section.