HOW BLOCKCHAIN WORKS?

Introduction

A #blockchain?? is a digital, #decentralized, and distributed ledger that records transactions across many modes (computers) in a network. It consists of a chain of blocks, with each block containing transaction data, a timestamp, and a hash that is connected with the previous block.

Let's see the exact process:

• New Transactions Requested

Whenever a transaction is initiated (e.g., sending cryptocurrency, executing a smart contract), it gets verified by nodes in the network and bundled into a new "block" along with other recent transactions.

• A Transaction Block Created

Each new block contains data about valid transactions, a timestamp, and a cryptographic hash that uniquely identifies the block and connects it to the previous block in the chain.

• Block Circulation Among Nodes

Nodes on the network compete to validate the new block using a consensus mechanism like Proof-of-Work (PoW) or Proof-of-Stake (PoS). This process ensures the transactions are legitimate and prevents tampering.

• Nodes Validate Transaction Block??

Once a node solves the complex cryptographic puzzle (PoW) or meets the staking requirements (PoS), the new block is broadcast to the network for verification by other nodes.

• Nodes Received a Reward for a Proof-of-Work

The Proof of Work protocol is used during the mining process. During this process, nodes compete to ensure that the information contained in each block of transactions is accurate. For their efforts, they receive a reward.

• Block Added in Blockchain

In the context of #blockchain technology, the term "block added" refers to adding a new block of transactions to the existing block of blocks. Once the data is validated, the block is closed. Then, a new block is created for new transactions to be entered into and validated

• Chain Update

Suppose a majority of nodes reach a consensus that the new block and its transactions are valid. In that case, the block is permanently added to the blockchain, creating an immutable and transparent record of all transactions.

Final Thoughts

Blockchain technology has the potential to disrupt various industries by enabling secure, trustless, and efficient data management and value exchange. From cryptocurrencies and smart contracts to supply chain tracking and decentralized applications (DApps), the applications of blockchain are vast and continuously evolving.

While blockchain is still a relatively new technology, its core principles of decentralization, transparency, and immutability offer a promising foundation for building more secure, efficient, and trustworthy systems in the digital age.