What is Blockchain Technology?

Blockchain technology is one of the top trending topics that has caused a massive shift in matters of technology. This can be attributed to the increase in the need for internet users to have secure transactions and at the same time reduce transaction costs.

Introduced in 2008 Blockchain is an immutable, shared ledger useful in the tracking of assets. These are both tangible (land, cars, houses) and intangible (copyright, intellectual property) assets. This Shared ledger has gone through a series of eras. Through this Blockchain has had a series of modifications to make it useful in many sectors compared to its initial purpose revolving around digital currencies.

Hence, it is vital to know how this technology works and the common features surrounding the technology. That’s the goal of this article: every important detail on Blockchain technology will be discussed here.

How Blockchain Technology Works?

To understand blockchain tech activities it’s important to know how it works. The blockchain is a decentralized ledger. It involves transactions across different peer-to-peer networks. Through these participants initiate transactions without needing a central party. The major steps that are undertaken are:

1. A peer makes a request (e.g., initiating funds transfer)
2. Then there is the broadcasting of the request across the P2P network
3. The nodes (computers in a network) validate the transaction using a specific algorithm
4. After this, the verified transaction is combined with other transactions. This is to create a new data block.
5. Lastly, there is the addition of the new data block to the existing blockchain. This is in an unalterable way.

The Technologies in Use by Blockchain

For the technology to fully work some technologies come into place. The combination of these technologies ensures the achievement of objectives like transaction safety. These leading technologies are namely; a P2P network, cryptographic keys, and a means of computing. Let's look at each of these technologies:

Cryptography Keys

This consists of private and public keys. These keys are important in performing transactions successfully between both parties. Each party makes use of two of these keys and uses them to produce a secure digital identity. This security feature is what distinguishes blockchain technology. This identity is what authorizes and controls the transactions. Many experts refer to it as a digital signature.

A peer-to-peer Network

In technology peer to peer network services are essential. This incorporates a large group of individuals that through the digital signature agree to make a transaction. From this, it is simple to describe P2P as the participants in a transaction whose access is the cryptography keys.

The parties after agreeing (authorizing) a deal, there is the certification that ensures a successful transaction. The verification is done through a special mathematical verification algorithm. The P2P network is useful to undertake transactions after verification.

Computational Means

For every transaction to be successful a means of computing is important. Through these different activities are possible. These activities are mostly to keep the network records and store transactions. This provides an up-to-date shared ledger. The stored transaction will ensure the activities are traceable. Then the record in the network is for accountability reasons and to avoid any activity that does not involve the parties transacting.

Conclusion

Blockchain technology is a game changer in the field of Tech. This is expected to increase as more companies, governments, tech experts and many other stakeholders continue to take part in activities surrounding this technology. Major activities include financing, developing, usin, etc. Next, we will look at The Common Design Feature of Blockchain.