What Is Blockchain Technology | How Does Blockchain Work In 2021

Blockchain technology is quite old, but in 2009, Satoshi Nakamoto gave the theory to use Bitcoin for cryptocurrency. He published a paper about digital currency based on Blockchain.

What is Blockchain

Bitcoin is a cryptocurrency and is quite popular right now. It is also being seen as an alternative to the common currency. But the technologytechnology behind this cryptocurrency is how Blockchain works. Today we will understand it.

Blockchain can be used and not only in Bitcoin but also in many other sectors. It is a secure, safe, and decentralized technology that is almost impossible to hack or tamper with.
You can guess the value of bitcoin from the fact that in 2010 the value of 1 bitcoin was less than just US $ 0.06, but now the value of 1 bitcoin has crossed $ 49,120.40. How did this happen? Apparently, because of blockchain, it is so secure and popular.

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How does it work

It is the same thing as the name. There are many blocks in it and they are connected to each other — this has become blockchain. Each block contains data, hash, and hash of the previous block. Now tell you about the hash of data, hash, and previous block.

The data that resides in the Bitcoin blockchain is actually the transaction details in that data. Information like sender, receiver, and account is kept in it.

After the data comes the number of hashes. You can think of a hash as a biometric which is unique to everyone. Your face ID cannot match anyone else, similarly, this hash is also unique. If there is any change in the block, it changes the hash.

How Does Blockchain Work

All blocks are connected to each other virtually. This is a system in which there is no scope for tampering. Because even if someone wants, the information of the blockchain cannot be changed.

The hash of the previous block — A block also hashes of the previous block and because of this, a chain of blocks is formed. That is, they are connected to each other.

How Does Blockchain Work

If you change the data of one block, then you have to change the data of the other block as well. If it is not done then the blocks cannot remain connected among themselves. It is not possible to change the data from all the blocks around the world. But hackers can do anything.

What is proof of work?

However, computers have become so powerful that by calculating, they also change the hash. To prevent this, there is also proof of work in the blockchain. This is a method that slows down the formation of fresh new blocks. It takes about 10 minutes.

Proof of work is a protocol or method that verifies transactions in a way. Bitcoin miners live with very powerful computers that solve a lot of complex mathematical problems.
The miner who first solves him gets a reward in the form of bitcoin. This may take 10 minutes. This problem is actually done to validate transactions in a block.

The good thing about blockchain is that it is not centralized. Distributed in millions of computers around the world called the peer-to-peer network.

Here transaction information reaches all the people —

For example, as soon as someone adds a new block to the blockchain, its information goes to all the people who are connected to the blockchain system. However, these details are not shared by anyone’s personal details or location at all.

Because of the blockchain, Bitcoin is a cryptocurrency that is completely de-centralized and no one controls it. As we conduct transactions through UPI, the bank has complete control over it. Even the control of your money is with the bank and the government.

How does bitcoin transaction happen?

All users of the Bitcoin network have public keys and private keys. A public key is an address that all the users of this network know, that is, it is public. It is just like an email address.

You will only know the private key and you can also understand it like a PIN or password. One needs a public key to transfer bitcoins.

Source : [my medium blog]