How Blockchain Works

 

A blockchain network is a database that is shared across a network of computers. When a record is been added to the chain it is very difficult to change or manipulate. The network makes constant checks to ensure all the copies of the database transactions are the same(A data page is when records are gathered together into blocks and added to the chain one after another) Blockchains have been used to underpin cyber-currencies like bitcoin, xrp, Etherium and many other blockchain projects.

      A USED CASE OF BLOCKCHAIN METHOD EXPLAINED BELOW:

A blockchain tech trade is initiated, For instance, let’s say Mr Donald is selling ten of his coins to Mr Trump for $10. A detailed list of transaction is recorded, including a digital signature from both party.The network checks the record with the help of the computers in the network, called ‘nodes’, validates the details of the trade to make sure it is in correct order.The records that the network accepted are therefore added to a block. Every block contains a unique code called a hash which also contains the hash  of the previous block in the chain

(Hash codes are difficult to change and keep records safe)

The block is then added to the blockchain network whilst the hash codes connect the blocks together in a specific arrangement after passing validity checks. A math function is used to create hash codes that takes digital information and generates a string of letters and numbers from it.

    Let’s take a closer look at two important characteristics of hash codes:

First, no matter how big or small the size of the original file, a hash function will acurately generate a code of the same length. For instance, Any figures (500 xrp)given during a transaction would generate hashes of the same length 

(EXAMPLE 1: 4bfr2f07fbe086drg7yho75khryh4ht444ggg45t7) 

So if someone decided to delete just one figure (50 xrp) from previous transaction, it would show up with a different hash totally not related to Example 1 as explained 

(EXAMPLE 2: gh4rbfr2f07fb656e086drgdf75kytg5n68reyv46k)

The most interesting thing is that the changed hash breaks the chain and the next block in the chain still has the old hash, so to reset the chain; a hacker would have to recalculate that. And the next, and so on. Recalculating all those hashes would take an enormous amount of computing power which cost a fortune.

Unlike traditional ledgers, a blockchain technology database are decentralized and not answerable to any “superior”Gaining blockchain technology resources unlike centralized control of a network(traditional banks),which are answerable to a superior; trust becomes a problem. One answer is to only let world you know, such as company employers and employees. But blockchains technology such as the likes of bitcoin, xrp, etherium, Dragon coin network and so on are open to anyone. Members are anonymous. No one can tell if they are genuine.

To settle this and build trust, these blockchains set tests for the computers that seek to join and definitely add records to the chain. The tests are called consensus models. 

(The test requires network members to ‘prove’ themselves with records proof of work and stake)

 

PROOF OF WORK

To add a block to the chain, nodes must demonstrate that they have done ‘work’ by solving an increasingly difficult computational puzzle. These process are called mining which uses a lot of computing power. In return for their work, members can receive rewards through airdrops – tokens for instance, or bitcoins, xrp, etherium, dragon coin etc.

PROOF OF STAKE

Participants like investors buy tokens which allow them to join the network. The more tokens they acquire, the more they can mine and earn profits.

Financial institutions have been investing in blockchains technology to simplify their record-keeping for payments with already proven used cases of cross border payments

(moneygram now using the xrp ripple blockchain technology)

Leave a Reply

Your email address will not be published. Required fields are marked *