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How does Blockchain technology work?


After getting acquainted with Blockchain technology in the article “What is Blockchain Technology?”, In this post, you will get acquainted with the general operation of Blockchain technology in a technical and simple language.

First of all, do not forget how it works Accurate The Blockchain is so complex that it does not fit into a simple article. As a simple user, you will not need to know how it works to use Blockchain technology, just as you do not need to know how the Internet works to use the Internet.

It is also important to know that blockchain has many applications as a new solution, and in each context, a specific and customized type of blockchain is usually used. For example, the Bitcoin blockchain and the Blockchain used to track food have completely different ways of working, but the general rule is the same.

Blockchain technology combines three old technologies

The concept of Blockchain technology is a combination of the three core technologies. None of these three technologies are new, but their coordination with each other forms a new technology.

The three principles in Blockchainchain technology are:

  • 1) Private key encryption
  • 2) A distributed network and head office
  • 3) Rules and an incentive (usually financial) to persuade users to participate in transaction approval, record keeping, and network security.

In the following, we will examine how these principles work together to secure digital transactions.

Encryption keys

Two people want to interact with each other via the Internet.

How does Blockchain technology work?

Each of them has a private key and a public key.

How does Blockchain technology work?

The role of the private key and the public key in the Blockchaink is to create a secure and secure digital identity. The combination of these keys is called a signature “digital signature” It turns out that it has a lot of application and validity. This digital signature enables ownership control.

But ownership control alone is not enough to secure digital communications. While the identity issue is resolved with public and private keys and digital signatures, blockchain activity should be as secure as possible and anyone should be allowed to perform and verify transactions.

This is achieved with a distributed network.

A distributed network

How does Blockchain technology work?

The advantage and need for a distributed network with the example “If a tree falls in the forest” is better understood. If a tree falls in the forest and we have recorded the moment of the fall with thousands of cameras, we are sure and we have visual evidence that the tree has fallen, even if the details (why or how) are unclear. Most of the value of the Bitcoin blockchain is that it has a large network. In this network, the so-called validators, like those with cameras, record the evidence and come to an agreement about it. But here, instead of the camera, the evidence is based on mathematics.

Simply put, the size of the network in a blockchain is essential to its security.

This is one of the most attractive features of the Bitcoin blockchain. This network is very large and has accumulated a lot of computing power. As we write this, Bitcoin, with more than 4,000,000 TH / s of processing power, has more processing power than tens of thousands of banks and branches. Ethereum, while still young, competes with large companies with 139 TH / s of processing power.

By combining cryptography (private and public keys) and distributed networking, an extremely useful form of digital interaction is possible.

block

How does Blockchain technology work?

The contents of a block are: a digital signature (a combination of private and public keys) – time tag – information

This block is then distributed among all network members (nodes or nodes).

How does Blockchain technology work?

Motivation and consensus

As we said, the Blockchain needs contributors to survive and maintain its security, so there must be an incentive for contributors to be attracted to the network.

For example, many open and public blockchains, such as Bitcoin and Ethereum, use a concept called mining to motivate network security.

By providing computer processing power to the network, computers compete to get the answer to a mathematical equation, and any computer that can get the answer is rewarded. So the motivation to receive rewards allows people to provide the processing power of their computers to the network. In the case of bitcoin, the goal is to prevent bitcoin re-spending, or so-called double-spending. This is achieved through mining.

When a block is completed, it joins a chain of blocks called a chin block.

In the article How Bitcoin works, you can get more details on how the Bitcoin blockchain works.

Hypothetical image of a chain of blocks:

How does Blockchain technology work?

The type of consensus reached in each Blockchain can be different. It depends on the type, purpose and rules of a Blockchaink. It is the protocols and rules of the Blockchain that determine what type of transaction is approved and what type of transaction is not approved. Also, the motive and type of agreement are different in different blockchains.

And if we want to summarize all the above descriptions in one photo:

How does Blockchain technology work?

Source: Coindesk

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