Blockchain: Emerging Technology to Prepare for the Future of the Digital World
Blockchain technology is gaining a lot of traction nowadays for valid reasons. Let’s understand the meaning of blockchain technology, the three pillars on which it stands, and its functionality through infographics.
Blockchain is a highly secured structure that stores transactional records (also known as the “blocks”) of the public in several databases (known as the “chain”) in a network that is connected through peer-to-peer nodes. Anyone on the network can view all the transactions and access copies of these blocks.
Pillars of Blockchain
The decentralized system of transactions refers to transactions occurring with the mutual consensus of users. You don’t need the approval of regulatory authorities like a bank or government for transactions. The two parties involved interact directly without involving a third party, facilitating smoother, safer, and faster transactions.
Transparency in blockchain means all the transactions are public, and everyone within the network can view them. This transparent nature of blockchain ensures its security.
Immutability in blockchain indicates that no transaction gets altered once it enters the blockchain. Blockchain platform assures the security of your digital assets as it is impossible to change the data by other users.
Step by Step Breakdown of Blockchain Functionality
- User Request a Transaction.
- A Block representing the transaction is created.
- The block is broadcasted to every node in the network.
- The network of nodes validates the transaction using known consensus algorithms.
- A new data block is created once the transaction is combined with other transactions upon verification.
- The new block is added to the immutable blockchain (permanent and unaltered).
- The transaction is complete.
Check out this insightful infographic that describes the important parts of Blockchain Technology.
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