In the simplest terms, Blockchain is a public distributed ledger system used by cryptoassets. The power of blockchain technology lies in its ability to distribute information in a secure manner. It is a decentralized system distributed across all nodes in a computer network that makes up a system. Blockchain technology is also known as a distributed ledger technology. A blockchain database can’t be controlled by a single party or infiltrated and it isn’t stored in a single location. Instead, its hosted by tens of thousands of computers at once making it one of the best innovations along cryptoassets.
How does Blockchain work?
A blockchain like the name suggests consists of multiple blocks looped together. When a single block stores new data, it is then added to the blockchain. For a block to get added to the blockchain, the following has to happen:
- A transaction occurs within the network.
- The transaction is then verified by a network of computers consisting of thousands of computers.
- The transaction is stored in a block. Remember we said a blockchain is a ledger used to store transaction information. After a transaction occurs and is verified as an accurate one, it is then stored in the block.
- After all this, the block is given a unique identifying code also known as a hash. The most recent block added to the blockchain is given to the block and once the block is hashed, it is now added to the blockchain.
Once a new block is added to a blockchain, it becomes public information and anyone can view it. All the information about a transaction is stored on the blockchain.
Cryptoassets and the blockchain technology
To be precise, all cryptoassets are based on the blockchain technology. Cryptoasset would never exist without the blockchain technology. One thing with blockchain and the cryptoasset world is that it is transparent. Take a look at the blockchain of a Bitcoin. You have access to all the data stored on the blockchain but you can’t edit or modify it increasing security of a transaction. In the blockchain, you can see when, where and by who the block was added to the blockchain.
The primary aim of a blockchain is to allow digital information to get recorded on a ledger or record and distributed but not edited or modified. Anyone can access the data on the blockchain and verify transactions without having to modify the data.