How blockchain works

How Blockchain works, credits: getty

Blockchain as said earlier is a chain of blocks that contains information. So basically these blocks represent ongoing transactions on the chain.

How blockchain works

1. Transaction

First of all two users decide to initiate a transaction by exchanging a unit of value such as digital currency.

2. Block production

Due to the transactions on going by other users in the blockchain network, the transaction adds to the list of other pending transactions which in turn creates a block

3. A hash is created

A Hash is contained inside a block and is like a fingerprint due to its uniqueness i.e. Every block contains its own hash, which helps to identify the contents of the block such as sender, receiver, and the number of tokens to be transferred.

It also contains the hash of the previous block which is attached/linked to the new block. Genesis block is the first block in the chain as there’s no preceding block before it.

4. Verification

Basically what keeps a blockchain network running are Nodes.

A node, is a computer connected to a cryptocurrency network that interacts with the network by executing certain functions like creating, receiving or sending information. It is a decentralized distributed ledger that records all cryptocurrency transactions and makes the information available to both users.

These nodes evaluate and verify that everything is still in order before the execution of the transaction and a distributed ledger is generated by the node and displayed to both users.

Follow me on Twitter: @Blockchain_Cali

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store