What is Blockchain and How Does the Blockchain Work?

Blockchain is a technology built with a distributed ledger, through a cryptographic signature for peer-to-peer data transfer and data storage. blockchain ledgers are maintained in a network of consensus protocols to guarantee their security futures. 

Blockchain technology was invented in 1991, and gained mainstream attention through Bitcoin in 2010, over the years, more exploration has been done about the blockchain, which introduced the existence of considerable technologies, and protocols such as Ethereum, Solana, etc.

Why is it called blockchain?

The name, “blockchain”, is the combination of the word Block – which can be said to be a store for cryptographic data, and Chain – which is the network connecting the obtained data for peer-to-peer distribution.

What are the Qualities of the blockchain 

The fundamental of a blockchain is the decentralized Ledger, with various key factors of data, the blockchain has only one data ledger that is distributed to all interactors, this means, a single data is shared within the full block to all participants of the network and also, transparent to everyone because the data nodes are easily accessible.

Another good fundamental of the blockchain is, that each data can be traced and tracked through a cryptographic protocol which secures the network from hacks and can be said to be immutable, meaning transactions on the blockchain can’t be deleted or canceled.

The blockchain is vast, with newer versions of technology built regularly, this technology can be specified into three categories.

The Permissionless blockchain, the Permissioned blockchain, and the private. 

The Permission–less Blockchain

Blockchain can be regarded as a Decentralized network whereby anyone can access it and become part of the network, for example building other projects on it and accessing its database, also there are no regulations within a fully decentralized blockchain it’s entitled to anyone and transparent thereby requires no personal information. 

The Permissioned Blockchain

The Permissioned blockchain can be referred to as centralized, this requires authentication before the database or node can be accessed and is governed by an entity. In some cases, most protocols are partially decentralized with some level of transparency.

The Private blockchain is designed to allow users to maintain data privacy using the protocol, transactions are hidden and kept private, and counters censorship. 

How The Blockchain Works

Transactions on the blockchain are data distribution, these data are coins, and tokens, but are both classified as cryptocurrencies which are value-added protocols on the blockchain ledgers.

The blockchain works as a consensus mechanism, transactions are verified on different blocks before authentication, and the approved transaction is wrapped with other transactions made within a particular period and then recorded in a block. The newly created block connects to the existing one through a cryptographic hash, Block transactions are connected in a string and then modified.

The blockchain network is secured due to the built-connected sequence which modifies the data in every block, every new block is recorded once it is added to the network, and if a block is incorrect it is automatically corrected through a sequence in real-time after the data is updated on the ledger and participant of the block is notified immediately.