How new data is communicated in a blockchain
The blockchain is a revolutionary milestone in the digital space and it the society we live in. The blockchain is a disruptive business model, and its use will grow in ways unimaginable.
Another way to define a goes like this, a blockchain is a secure, reliable technology that operates on a peer to peer basis, to stock and share transactions. It enables fast execution of a transaction in a very cost effective manner.
It is a transparent, distributed cryptographic ledger that has been rendered unforgeable. It stores all kinds of transactions without the need of a central government or a financial intermediary I.e banks; each transaction is verified by a network of participants.
When transactions are verified, they are added to another block of verified transactions which is then added to a distributed ledger in a chronological order; this is where the term chain comes from.There are two types of chains, a public blockchain and a private blockchain that lets members access a private network.
These blockchain transactions concern any digital assets and cryptocurrencies. While traditional ledgers are centralized, in blockchain technology, each participant in a network has a copy of the ledger and is included in the transaction approval process. Now, to corrupt the traditional ledgers, one needs to get to the central ledger holder, but in the blockchain, you will need to attack all copies of the ledger at the same time because of the distributed nature of these ledgers. The most important value of blockchain technology is what is common in the traditional system, that is trust. Instead of helping you to build trust, blockchain makes trust completely irrelevant.
How does a blockchain work?
New transactions are normally grouped into blocks. Each block is verified and validated by a network of participants who are referred to as nodes or miners using crypto techniques which depend on the blockchain type. For instance, Tom would like to send twenty bitcoins to Mary. Miners will verify that Tom is the owner of the twenty bitcoins and once that is confirmed, the transaction si complete and Mary will be able to receive these bitcoins. Blockchain security uses encryption technology to process all transactions.
Nodes or minor are incentivised to verify and approve tasks by receiving new cryptocurrencies or fees. This technology can be used for any transaction that has value or for databases and registers that are unforgeable. Blockchain technology can be applied to any transaction where visibility and traceability are needed. For instance, the election process, to prove that a document existed at a particular point in time or that an individual is the rightful owner of an asset.
Blockchain can also be used for automatically executable contracts that do not need human interventions, they are commonly referred to as ‘smart contracts.