What is Blockchain?
Blockchain Technology is often referred to as Distributed Ledger Technology(DLT). It is a growing list of blocks(records) that are linked together using Cryptography. Cryptography is a secure communications technique. They are managed by a peer-to-peer network for use as a publicly distributed ledger which is unalterable. This unalterable behavior makes it secure by design and portrays its distributed computing system.
In 2008, Blockchain technology was introduced by an unknown identity named Satoshi Nakamoto. The main purpose was to serve Blockchain as a public transaction ledger of the cryptocurrency Bitcoin.
What is a Block?
Blockchain is comprised of a list of records called blocks. Each block consists of a cryptographic hash of the previous block, a timestamp, and transaction data. The timestamp proves that the data existed when the block was published to get itself into the hash, hence blockchains cannot be modified once recorded.
The process of block creation is as follows:
- The data.
- Nonce – A 32-bit generated random whole number.
- Hash – A 256-bit number attached to nonce.
These blocks are created by Miners(Blockchain Developer) using Nodes which constitutes the process called Mining.
How does it work?
Blockchain is a database that stores blocks of encrypted data binding them together to form a single source of truth. These digital assets are distributed rather than copied or transferred making it unchangeable over time. These digital assets are decentralised.
Mining a block isn’t easy since it has its own unique Nonce and hash along with the reference of the previous block’s hash. Miners use various software to solve the complexity of finding a nonce that generated accepted hash. Every block is added to the chain only when the miners(Blockchain Developer) find out the right nonce from the 4 billion possible nonce-hash combinations. All the nodes accept the change when a block is successfully mined, hence rewarding the miner financially.