What is Blockchain Technology? and How it Works? Complete Guide for Beginners
Understanding Blockchain Technology
If you are a complete beginner and don’t know what blockchain is go through the entire article to understand what this technology is and how its works behind.
Introduction
Let us first break down Blockchain into two words “Block” and “Chain” so what do Block and Chain refer to, here?
Block — The block contains the data or the information of records that is a list of all transactions done by X person to Y
Chain — The chain helps to add all the blocks since all the blocks have a limit which is 1500- 3000 transactions for bitcoin per block.
Ledger — It is a collection of all the transactions or records stored in a block. Once all the transactions limit in one block are filled up it goes to the next block and adds them to form the network. This network is formed by miners who verify the transactions by the Proof of Work method.
What is Hashing Function?
Let’s say are giving some input to the computer and because of that, it gives you some output. The same is with the hashing function you will give some input and it will give you an output value in the form of digits.
Where Bitcoin uses SHA- 256 hashing function and Ethereum uses the Keccak-256 hashing function.
What is SHA-256?
SHA stands for Secure Hashing Algorithm and 256 refers to 0 & 1 of 256-bit long output values.
Important things to know about hashing function:
- You can’t find it but you have to guess it.
eg: if you give input A and you want output F you have to guess it and add or remove more A.
2. Changing the input, a little bit can change the entire output.
eg: follow me on Twitter and follow @akash_the_dev on Twitter are different things and will give you different output.
What is Decentralized?
Let’s understand this from an example like you posted content on a social platform that is controversial now you want that content to stay on the platform but you don’t have entire control over that content because the platform you will be using to post content has the ownership to delete it without your permission and this is called Centralized System.
So what’s a Decentralized System — It is a system where there are no government bodies, organizations, or any person who has entire ownership of the things but it is managed by the community of people who supports the project and you have all the ownership of whatever you want to post you can and no one can bring it down because it can’t be deleted since the information is stored on thousands of networks of computers.
Who are Miners and What do they do?
So miners are the person who verifies your transaction if it’s done or not and for this, they get some Bitcoin tokens for the work they are doing for the community and they add the last block to form the network of chains called a blockchain.
What is Immutable?
It is a way through which all the transactions history can’t be altered or changed.
Due to this, you cannot alter anything in the blockchain once the action is been taken and all these actions will be visible to the public.
What is Cryptography?
It is a method to secure the blockchain system with the help of maths and logical problem-solving.
So let’s summarize what is Blockchain Technology.
It is a list of records that stores data or information publicly in chronological order which is secure by cryptography, accessible to anyone in the network, and is not controlled by any central authority is called Blockchain Technology.
So hope you have got the idea of what is Blockchain Technology and how it works.
If you got something to learn please do follow Akash Jha and BlockTrain for more insightful content for Web3 and Blockchain in a simplified way.
You can also connect with me on Twitter and LinkedIn too.
Thanks for reading.
