Blockchain is a decentralized, distributed ledger that records transactions in a secure and transparent way. Each block in the blockchain contains a cryptographic hash of the previous block, creating a chain that cannot be altered without changing subsequent blocks. The blockchain is maintained by a network of computers called nodes, which work together to verify transactions and add them to the blockchain.
Brief explanation of how blockchain works:
- When a transaction is initiated, it is broadcast to the network of computers, or nodes, that make up the blockchain.
- The nodes work together to verify the transaction by solving complex mathematical problems, and once it is verified by the majority of nodes, it is added to a new block in the blockchain.
- Each block in the blockchain contains a unique code, called a cryptographic hash, that is based on the previous block’s hash, creating a chain of blocks that is difficult to alter without changing all subsequent blocks.
- The blockchain is distributed across a network of nodes, making it difficult for any single entity to control or manipulate the system.
- Thenodesareincentivizedtomaintaintheblockchainbyreceivingrewardsinthe form of cryptocurrency, which is generated through the process of mining new blocks.
- The blockchain is designed to be transparent and secure, as every transaction is recorded and can be verified by anyone on the network.
- Asmoretransactionsareaddedtotheblockchain,itbecomesincreasinglysecure and resistant to tampering.
Overall, the blockchain works by using a network of nodes to verify and record transactions in a secure and transparent way. Its decentralized nature and cryptographic security make it a powerful tool for a wide range of applications, from cryptocurrencies to supply chain management.