What is Blockchain?
Blockchain is a public distributed ledger where digital transactions are recorded. Blockchain represents a new way of how information is shared in this world, with the potential of becoming the cornerstone in information sharing in the years to come. Since it is a secure, public electronic ledger, it can be shared between various users with all transactions recorded with a time-stamp and linked to the previous ones. While it was initially developed as the accounting principle for Bitcoin, its usability has surpassed that to move to various other real-life applications.
How does Blockchain Work?
Blockchain consists of blocks, each of which records some recent transactions. These blocks go into the Blockchain permanently. New blocks are generated as soon as old blocks are completed. All such blocks are connected to each other in a linear and chronological manner, with each block containing a hash of the earlier block. The Blockchain has all the information, right from the first ever block to the most recent one.
The Blockchain was designed such that the transactions contained in the blocks are permanent. They can never be deleted or copied, though they can be distributed. Moreover, since every block requires complex cryptography to be added, they remain almost fool-proof. That being said, Blockchain shall continue to grow in size because of its design, thus leading to serious storage issues in the future.
Blockchain databases are managed autonomously for information sharing between two different parties. Because it is a peer-to-peer network with a distributed time-stamping server, it does not need an administrator.
The users are the administrator.
You are the administrator!
The need for third-party is eliminated in Blockchain because it is the users who validate every time one person pays another for something. The transaction details are recorded into blocks publicly after which it is verified by other users. All the participating computers, also called nodes, share the Blockchain database. Every node receives a copy of the Blockchain, thus getting public records of every transaction ever executed.
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