How Blockchain Works4575343
Blockchain is really a piece of software designed to create decentralized databases.
The system is entirely "open source", which means that anyone can view, edit and propose changes to its underlying code base.
Though it has become ever more popular thanks to Bitcoin's growth - it really is been around since 2008, rendering it around a decade old (ancient in computing terms).
The most important point about ORBITEX is that it was designed to create applications which do not require a central information systems service. This means that if you're utilizing a system build on top of it (namely Bitcoin) - your data will be stored on 1,000's of "independent" servers all over the world (not owned by any central service).
How a service works is as simple as creating a "ledger". This ledger allows users to create "transactions" with each other - obtaining the contents of those transactions saved in new "blocks" of each "blockchain" database.
Depending on the application allowing the transactions, they ought to be encrypted with various algorithms. As this encryption uses cryptography to "scramble" the data stored in each new "block", the phrase "crypto" describes the entire process of cryptographically securing any new blockchain data that the application may create.
To fully understand how it works, you need to appreciate that "blockchain" isn't new technology - it simply uses technology in the slightly different way. The core of it is a data graph called "merkle trees". Merkle trees are essentially methods of computer systems to hold chronologically ordered "versions" of a data-set, allowing them to manage continual upgrades to that particular data.
The main reason this is important is really because current "data" systems are what might be described as "2D" - meaning they don't really have any way to track updates to the core dataset. The info is basically kept entirely since it is - with any updates applied directly to it. Whilst there is nothing wrong with this, it does pose a problem in that this means that data either needs to be updated manually, or his tough to update.
The solution that "blockchain" provides is basically the creation of "versions" with the data. Each "block" put into a "chain" (a "chain" as being a database) gives a list of new transactions to the data. This means that if you're able to tie this functionality right into a system which facilitates the transaction of information between a couple of users (messaging etc), you can actually create a totally independent system.
This is exactly what we've seen with all the likes of Bitcoin. Contrary to public opinion, Bitcoin isn't a "currency" in itself; it's a public ledger of monetary transactions.
This public ledger is encrypted to ensure that only the participants inside the transactions have the ability to see/edit the data (hence the name "crypto")... but way more, the fact that the data is stored-on, and processed-by 1,000's of servers around the world means the service can operate independently of the banks (its main draw).
Obviously, difficulties with Bitcoin's underlying idea etc aside, the underpin of the service is it's basically a method that works across a network of processing machines (called "miners"). These are all running the "blockchain" software - and attempt to "compile" new transactions into "blocks" that keeps the Bitcoin database as up to date as possible.