What is blockchain and how does it work?

What is blockchain?

Blockchain is a list of records linked with cryptocurrency, it is a series of record of data that is maintained by numerous computers, not owned by a single entity. cryptographic principles are used to secure and bound these blocks of data together. A blockchain is simply like a diary that cannot be interfered with. These blocks are simply a series of information stored in public database.

The blocks mainly have three parts, that is; Those that store information about transactions like time, date and amount, those that store information about participants in the transactions and those that store information that differentiates them from other blocs, that is they provides a unique identity.

How blockchain works

Blockchain as the name suggests is a series of blocks joined together to form a chain, for a new block to be incorporated in the chain, certain things must happen; first, a transaction has to occur, then the transaction must be verified using various public information records, after the transaction is verified, it is stored in a block where the block joins millions of other blocks like it. Before the block is added to the blockchain, it must be given an identity known as a hash, once it receives this identity, it can be joined with other blocks to form a continuous blockchain. Once this happens, it becomes available for the public and anyone can see it alongside its details such as date and time.

Pillars of Blockchain.

Blockchain has three main pillars which include; decentralization, transparency and immutability.Decentralization.Over the years, we have been served by centralised systems such as banks where when you need to make a transaction you have to deal with the sole entity first. The centralised system has various disadvantages such as information being prone to hackers since it is stored in one spot, It is also ineffective since the system can shut down or else it can be malicious and corrupted. The decentralised system avoids all this since everyone owns the information and you do not have to go through a sole entity so as to transact with another person, you can do it directly.

Transparency.

These system provides privacy and transparency to the people, since a person’s transaction is provided publicly but their identity is hidden using a complex cryptography and their public address is the only thin that represents it.Immutability.One information has been entered into the blockchain, it cannot be interfered with, this is a very important feature which has been achieved through the cryptographic hash function. This gives companies heads up security of their information since no one can interfere with their system and alter the books of accounts, thus embezzlement can be easily eliminated through this system.It is therefore advisable that people should make use of the blockchain technology since it is a decentralised, non single entity system, it is not prone to hackers thus information cannot be tampered with as well as it is transparent since one can gain access to information if the want to.