Blockchain

Blockchain is a decentralized and distributed digital ledger technology that records transactions across many computers in such a way that the registered transactions cannot be altered retroactively. Here’s an overview of its key concepts:

1. Structure:

- Blocks: Each block contains a list of transactions. Once a block is completed, it is added to the chain, creating a blockchain.

- Chain: The blocks are linked together using cryptographic hashes, forming a chain of blocks, hence the name "blockchain."

2. Decentralization:

- Unlike traditional centralized systems where a single entity controls the database, blockchain operates on a network of computers (nodes). Each node has a copy of the entire blockchain.

- This decentralization increases security and transparency, as no single point of control exists.

3. Immutability:

- Once a transaction is recorded in a block and added to the blockchain, it is nearly impossible to alter. This immutability ensures the integrity of the data and prevents fraud.

4. Consensus Mechanisms:

- Blockchain networks rely on consensus mechanisms to agree on the validity of transactions. The most common are Proof of Work (PoW) and Proof of Stake (PoS).

- Proof of Work (PoW): Miners compete to solve complex mathematical puzzles to validate transactions and add new blocks. Bitcoin uses PoW.

- Proof of Stake (PoS): Validators are chosen based on the amount of cryptocurrency they hold and are willing to "stake" as collateral. Ethereum is transitioning to PoS.

5. Transparency and Security:

- All transactions on a blockchain are transparent to all participants in the network. However, participants are usually pseudonymous, identified by cryptographic addresses.

- The cryptographic nature of blockchain makes it highly secure. Transactions are encrypted and linked together, making it difficult for hackers to alter any transaction.

Blockchain technology continues to evolve, with ongoing research aimed at addressing its limitations and exploring new applications.

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