How a Blockchain works
Many industries are implementing blockchain solutions to secure their place in these changing times. Blockchain technology provides you with a platform where you can exchange values without the need for any central authority.
A Blockchain is basically a secure, decentralized and transparent container of data that introduces a smart concept that links each data with the previous data using cryptography.
Each transaction is linked to the previous transaction via the hash algorithms that reduce the amount of data contained in the transaction to a single and fixed length string. This string is then added to the next transaction and recalculated creating the ‘chain’. The typical blockchain validation process flows as follows:
-
A node initiates a transaction and signs it with its private key
-
A block representing the transaction is created in the block
-
The transaction is broadcasted to the peers within the network based on the preset criteria
-
The peer nodes then validate the transaction
-
After validation, the transaction is inserted in the block and it is confirmed.
-
The block gets added to the ledger and links itself to the previous block.
