Introduction
The blockchain is a network of computers that verifies and stores data in a way that’s transparent to all participants, but that can’t be changed without being noticed by everyone.
The blockchain is a network
The blockchain is a network. It’s a distributed ledger that keeps track of all the transactions in your cryptocurrency wallet, but it also has other applications. The most obvious one is that it allows you to send and receive money without having to trust any central authority–like PayPal or Venmo–or even each other. That’s because there are no middlemen involved: The whole thing is peer-to-peer.
But what makes this technology so special? And what are its limitations? Let’s take a closer look at how blockchain works…
Blockchains are distributed
The first thing to understand about blockchains is that they’re distributed. This means that the database of transactions (the blockchain) exists across multiple computers, each with its own copy. Each computer is called a node, and all nodes are connected to each other in what’s known as a peer-to-peer network.
When someone sends Bitcoin or Ethereum from one account to another, for example, that transaction must be verified by at least 51{6f258d09c8f40db517fd593714b0f1e1849617172a4381e4955c3e4e87edc1af} of all nodes in order for it to be added permanently into the ledger where all previous transactions have been recorded–this process is called consensus.
Blockchain verification
Blockchain technology uses a distributed ledger that is decentralized and immutable. This means that there is no single point of failure, so it’s very difficult to hack or corrupt the data stored within it. It also allows for transparency, because anyone can view all transactions taking place on the blockchain in real time without needing permission from anyone else.
How does blockchain work?
Blockchain is a distributed ledger. It’s also known as a shared database, or decentralized ledger. The technology behind blockchain is made up of two parts:
- Distributed – There are multiple copies of the data stored across multiple computers (or nodes) in the network. No one person controls all the information; it’s shared among everyone who participates in that particular blockchain.
- Encrypted – Each block contains its own set of encrypted transactions and metadata that can only be accessed with special permissions granted by other members within the network (more on this later).
Why does blockchain matter?
Blockchain is a new way of doing things. It can be used to solve problems in many areas, such as:
- Financial transactions: Blockchain can help banks and other financial institutions save money by reducing the number of middlemen required to process transactions and by speeding up payments. It also makes it easier for people who don’t have access to traditional banks–such as refugees–to transfer funds across borders without being charged high fees or getting ripped off by scammers along the way.
- Healthcare: Blockchain could be used for secure health records storage that would let patients control who has access to their information; cutting down on medical errors caused by poor record keeping; improving public health through more effective disease surveillance; making research more efficient (and therefore cheaper); creating a global database of rare diseases for researchers around the world who want access but don’t have enough funding yet./p>
Blockchain technology is about overcoming the constraints of the past and creating a new, better future.
Blockchain technology is about overcoming the constraints of the past and creating a new, better future.
Blockchain technology is about solving problems.
Blockchain technology is about creating new opportunities.
Blockchain technology improves efficiency by making things easier for everyone involved in a transaction–from buyer to seller and everything in between!
Conclusion
The blockchain is a powerful new technology that has the potential to change the world. It’s important to understand what it is, how it works and why we should care about it.
