Blockchain technology is subsequently becoming fast becoming popular in the word of cybersecurity. As more and more people are adopting the technology for their security it is critical to know how it actually works. So in this blog we are going to discuss how does blockchain technology work.
What is blockchain technology?
Blockchain, sometimes called Distributed Ledger Technology (DLT), uses decentralization and encrypted hashing to make the history of any digital asset unalterable and transparent.
The ever-growing list of records (called blocks) is linked using cryptography.
Each transaction is independently verified by a peer-to-peer computer network, time-stamped, and at last added to the ever-growing chain of data. Once the data is recorded, it does not change.
Although with the growing popularity of Bitcoin, Ethereum and other cryptocurrencies, blockchain technology has wide applications in legal contracts, real estate sales, medical records and any other industry that requires authorization and registration of a series of behaviors or transactions.
The advantages of using blockchain technology?
- Better transparency
- Enhanced security
- Reduction in costs
- Offers enhanced traceability
- Offers high speed and improved efficiency
To know more about the advantages of using blockchain technology then check out our blog from the link given below
How does blockchain technology work
Before we understand how does blockchain works let’s take a look at the components.
Blockchain technology usually consists of three components:
The information is put in the block.
A nonce is a 32-bit whole number. When a block is created, the nonce is generated at random, resulting in the generation of a block header hash.
Lastly, The hash is a 256-bit number that serves as a link to the nonce. It begins with a large number of zeroes
Blockchain works through a multi-step process. In simple terms, it happens as follows:
- Participants have the authority to enter a transaction, that the technology authenticates.
- firstly This operation creates a block that will represent this particular transaction or data.
- The block then goes to all computing nodes on the network.
- then The authorized node verifies the transaction and adds the block to the existing blockchain. (Nodes in a public blockchain network is miners; they usually pay for this task in a process called proof of work or PoW, usually in the form of the encrypted currency.)
- At last the Updates go through the network that will complete the transaction.