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Overview of Block Chain Technology

Blockchain technology involves storing transaction records across a distributed network of peer-to-peer nodes known as a digital ledger. Each transaction is digitally signed and stored in blocks, providing security against tampering. This allows information on the ledger to be highly safeguarded. Blockchain has the potential to streamline processes like supply chains and reduce fraud through increased transparency and decentralization. It works by connecting blocks of transaction data through cryptographic hashing, making histories transparent yet unalterable.

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35 views2 pages

Overview of Block Chain Technology

Blockchain technology involves storing transaction records across a distributed network of peer-to-peer nodes known as a digital ledger. Each transaction is digitally signed and stored in blocks, providing security against tampering. This allows information on the ledger to be highly safeguarded. Blockchain has the potential to streamline processes like supply chains and reduce fraud through increased transparency and decentralization. It works by connecting blocks of transaction data through cryptographic hashing, making histories transparent yet unalterable.

Uploaded by

Kent Innocentinnoh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Overview of Blockchain technology

Blockchain technology, also known as Distributed Ledger Technology (DLT), is a structure for storing
transactional records (the block) of the public in many databases (the chain) in a network connected
through peer-to-peer nodes. This storage of transactional records is typically referred to as a digital
ledger. For every transaction recorded in the ledger, there is a digital signature of the owner which
authorizes, authenticates and protects the transaction from tempering. This implies that the information
on the digital ledger is highly safeguarded.

The Blockchain is a revolutionary technology that has a huge potential to eliminate large amounts of
record-keeping, streamlining supply chains, saving money, reducing risks, stamping out fraud, enhancing
scalable transparency, and disrupting IT in ways that have never been seen since the invention of the
internet. Blockchain began as a real-world tech option, and is positioned to change IT in the same way
open-source software did a few decades ago. The technology makes the history of a digital asset that is
transparent and unalterable through a combination of decentralization and cryptographic hashing.

How block chain technology works

There are three important concepts of Blockchain: blocks, nodes and miners.

Blocks: Every chain consists of several blocks, with each block consisting of three elements:

 The data
 A nonce, a 32-bit number that is randomly generated when creating a blockchain. The nonce
then generates what is known as a block header hash.
 The hash, a 256-bit number that is wedded to the nonce. The hush starts with many zeroes, and
therefore, extremely small.

On creating the first blockchain, a nonce generates its corresponding cryptographic hash. This ensures
that the data in the block is signed and permanently tied to the nonce and the hash, unless the data is
mined.

Miners: Through mining, miners can create new blocks on the chain. Every block in a blockchain has a
unique nonce and hash, but the hash of the previous block is referenced in the chain. This makes it
difficult to mine a block, particularly on large chains. A special software is used by miners to solve the
complex math problems and find a nonce that produces an acceptable hash. There are approximately
four billion possible combinations of nonce and hash, given that the nonce is 32 bits and the hash is 256
bits. When the right combination is found, the miner’s block is added to the chain. In order to make
changes to a block chain, the block with the change, and blocks that follow after need to be re-mined.
This makes it nearly impossible to manipulate blockchain technology. After successful mining of a block,
all the nodes on the network accept the change and the miner is financially rewarded.

Nodes: Decentralization is one of the most key principles of blockchain technology. The chain can never
be owned by one miner or one organization. Instead, the chain is a ledger distributed through the nodes
that are connected to the chain. Here, nodes can be any electronic device that can maintain copies of
the blockchain and keep the network functional.

For every node, there is a copy of the blockchain. The network algorithmically approve approves all
blocks that are newly mined for updating and verifying the chain. Due to the transparency of
blockchains, every action occurring on the ledger can be checked/viewed. Miners are given a unique
alphanumeric identification number to show all their transactions. The blockchain technology maintains
trust and integrity among users through a combination of public information with systematic checks-
and-balances.

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