OneArt

A typical blockchain definition looks something like this: blockchain is distributed ledger technology (DLT) or a database in which transaction records are stored. These records are publicly available, meaning that anyone can access and view transaction data.Where is blockchain data stored?Let&#39;s look at bitcoin as an example. Bitcoin is a digital form of money powered by the blockchain technology. All bitcoin transactions (receiving and sending) are recorded and stored in this database (aka blockchain). However, unlike a bank database, which is centralized, transaction data is stored in blocks that form a chain. So, blocks are where the data is held.&#x1f4a1;By the way, crypto is also the <a href="https://oneart.digital/en/blog/how-is-crypto-stored-in-blockchain" rel="noopener noreferrer nofollow">data held on a blockchain</a>.<h2 id="header-0">Blockchain explained: how does it work?</h2>&#x1f517;Blockchain infrastructure can be represented as a chain of blocks, each storing information about a transaction.Imagine the anchor of a ship with a chain. The top part is the last record of the transaction; if you go lower, you can see older transactions. You can&#39;t change their places, because you would have to break the whole chain. It&#39;s the same with blockchain: if someone manipulates a transaction, the network will break and everyone will see what happened. Being open and transparent, such a system ensures the blockchain security.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/61b0c75d2e544c34ab5e70fda8f86a2e.png" /><h3 id="how-are-blocks-added">How are blocks added?</h3>In a centralized system, information is added to the database by a centralized management body. Blockchain is not managed by any central authority, i.e. it is decentralized.<blockquote>&#x1f914;Curious fact: All of the above applies to public blockchains (the most traditional and common option). However, there are also private blockchains. A private network establishes its own rules that determine who can browse transactions and transfer data to a chain of blocks. Private blockchains are not decentralized. There is a hierarchy in terms of network management, so it would not be accurate to refer to such a blockchain as decentralized.</blockquote>Blockchain is supported by network participants, who verify the validity of transactions and add information in the form of a block to a chain of already existing blocks. Network participants &#34;collaborate&#34; through a network of computers (called nodes) that have open-source software installed. Keeping the blockchain running (validating information, adding blocks, etc.) requires a lot of processing power from these computers, so the network rewards participants with digital currency. Anyone can become such a participant.&#x1f4d6;Satoshi Nakamoto (a pseudonym for a person or group of people) posted a <a href="https://bitcoin.org/bitcoin.pdf" rel="noopener noreferrer nofollow">document</a> to the public in 2008. The document explains how digital money, Bitcoin, based on the blockchain technology, works. These principles still apply today.<h3 id="the-main-blockchain-characteristics">The main blockchain characteristics:</h3><ul><li>Decentralized (except for private blockchains)</li></ul>No central management body.<ul><li>Immutable</li></ul>Data on the blockchain cannot be changed.<ul><li>Distributed</li></ul>Ledger networks are managed by multiple users rather than a single central system.<ul><li>Сonsensus-powered</li></ul>Each blockchain has &#34;a collection of rules&#34; for fast decision-making by network participants. The opinions of the participants may differ, but the consensus algorithm determines the &#34;right way&#34;. It helps the system work more efficiently.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/6c5c5f5977374585ac98ccc9836e6fde.png" /><h2 id="header-1">Why use blockchain?</h2>Blockchain technology has turned the financial world upside down. It has the potential to replace banks and other forms of centralized governance with open and decentralized systems powered within the global crypto industry. What does it provide?SecurityIt&#39;s almost impossible to hack the blockchain itself and tamper with data for the purpose of fraud. What&#39;s more, the accuracy of data on blockchain is validated by the consensus on which network participants are guided.Boundless and fastFor example, you are in Australia and need to send a friend cryptocurrency to the US. Blockchain allows you to do this quickly, securely and without intermediaries (a bank).ConfidentialBlockchain transactions don&#39;t require your personal information.OpenThe code as well as transaction information can be viewed by anyone, so manipulation is almost impossible.<h3 id="follow-official-oneart-channels-to-find-the-latest-info-and-updates">Follow official OneArt channels to find the latest info and updates:</h3><ul><li><a href="https://twitter.com/art_wallet" rel="noopener noreferrer nofollow">Twitter</a></li><li><a href="https://t.me/art_wallet" rel="noopener noreferrer nofollow">Telegram Group</a></li><li><a href="https://t.me/artwallet_official" rel="noopener noreferrer nofollow">Telegram Announcements</a></li><li><a href="https://coinmarketcap.com/community/profile/OneArt" rel="noopener noreferrer nofollow">CoinMarketCap Community</a></li><li><a href="https://www.linkedin.com/company/oneart/" rel="noopener noreferrer nofollow">LinkedIn</a></li></ul>

What is a Blockchain & How Does It Work?

Table of Contents

OneArt

Other articles published on Dec 12, 2022

U.S. Fed Meeting Tomorrow: How Will the Crypto Market React?

Coinbase CEO anticipates a more than 50% decline in revenue in 2022

Callisto Security Introduces SoulBound Tokens for Audited Smart Contracts

Putin Says "Risk Of Nuclear War Rising" Crypto Market Fumbles

How is Tora Inu challenging other coins?

Decimal team: Nikita Bogorad, CBDO

Join our free newsletter for daily crypto updates!