How Blockchain Works7524678

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Blockchain is a piece of software made to create decentralized databases.

The device is entirely "open source", which means that anyone is able to view, edit and propose changes to the underlying code base.

Though it has become more popular then ever thanks to Bitcoin's growth - that it is been around since 2008, rendering it around 10 years old (ancient in computing terms).

The main point about NETWORKING would it be was designed to create applications that do not require a central computer service. Which means if you're using a system expand top of it (namely Bitcoin) - your data will be stored on 1,000's of "independent" servers around the globe (not belonging to any central service).

The way the service works is by 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.

Based on the application creating the transactions, they ought to be encrypted with assorted algorithms. Since this encryption uses cryptography to "scramble" the data stored in each new "block", the term "crypto" describes the process of cryptographically securing any new blockchain data that the application may create.

To completely understand how it works, you need to appreciate that "blockchain" just isn't new technology - it just uses technology in a slightly different way. The core of it can be a data graph called "merkle trees". Merkle trees are essentially ways for computer systems to keep chronologically ordered "versions" of your data-set, allowing them to manage continual upgrades to that particular data.

The reason this is important is really because current "data" systems are what is described as "2D" - meaning they do not have any approach to track updates to the core dataset. The info is basically kept entirely since it is - with any updates applied straight to it. Whilst you'll find nothing wrong using this, it does pose a challenge in that this means that data either needs to be updated manually, or his tough to update.

The solution that "blockchain" provides is essentially the creation of "versions" from the data. Each "block" included with a "chain" (a "chain" as being a database) gives a list of new transactions for your data. Which means that if you're able to tie this functionality into a system which facilitates the transaction of data between a couple of users (messaging etc), you can actually create a totally independent system.

This is what we've seen using the likes of Bitcoin. Contrary to popular belief, Bitcoin isn't a "currency" by itself; it's a public ledger of financial transactions.

This public ledger is encrypted to ensure that only the participants within the transactions can see/edit the data (and so the name "crypto")... but more so, the fact that the info is stored-on, and processed-by 1,000's of servers around the globe means the service can operate independently associated with a banks (its main draw).

Obviously, issues with Bitcoin's underlying idea etc aside, the underpin of the service is it's basically a system that works across a network of processing machines (called "miners"). They're all running the "blockchain" software - and attempt to "compile" new transactions into "blocks" that keeps the Bitcoin database as current as possible.