What is Blockchain Technology ? How Does it Works?

Blockchain Technology

So What is Blockchain Technology?

Blockchain is the technology the underpins digital currency (Bitcoin, Litecoin, Ethereum, and the like). The tech allows digital information to be distributed, but not copied. That means each individual piece of data can only have one owner.

"Blockchain technology was invented in 2008, but only came into the public conversation when Bitcoin launched".

Why Is It Called Blockchain?

A block is a record of a new transaction. When a block is completed, it’s added to the chain. Bitcoin owners have a private password (a complex key) to an address on the chain, which is where their ownership is recorded. 

you don’t need a bank to verify the transfer of money or take a cut of the transaction.

Some Examples Of Digital Currency:-

1:- Bitcoin

The current price of One Bitcoin in 2020 is 7,30,680.00 Indian Rupees. Bitcoin is a digital currency created in 2009 by a mysterious figure using the alias Satoshi Nakamoto. It can be used to buy or sell items from people and companies that accept bitcoin as payment

2:-Ethereum

The current price of 1 Ether equals 18,344.04 Indian Rupees.

At its simplest, Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralized applications.

3:-Litecoin

The Current price of 1 Litecoin equals 3,544.72 Indian Rupees.

A form of digital money that uses a blockchain to maintain a public ledger of all transactions, Litecoin is used to transfer funds between individuals or businesses without the need for an intermediary such as a bank or payment processing service.

How Does Blockchain Works?

1) A node starts a transaction by first creating and then digitally signing it with its private key (created via cryptography). A transaction can represent various actions in a blockchain. Most commonly this is a data structure that represents the transfer of value between users on the blockchain network.

2) A transaction is propagated (flooded) by using a flooding protocol, called Gossip protocol, to peers that validate the transaction based on preset criteria. 

3) Once the transaction is validated, it is included in a block, which is then propagated onto the network. At this point, the transaction is considered confirmed.

4) The newly-created block now becomes part of the ledger, and the next block links itself cryptographically back to this block. This link is a hash pointer. At this stage, the transaction gets its second confirmation and the block gets its first confirmation.

5) Transactions are then reconfirmed every time a new block is created. Usually, six confirmations in a network are required to consider the transaction final.

“Be yourself; everyone else is already taken.”
― Oscar Wilde