What is Blockchain?

What is Blockchain?

The buzzword “Blockchain” being thrown around recently. But not so many people seem to know what blockchain is or how does it work. And Tokenview Blockchain Explorer is the biggest browser to search the addresses, transaction, block info, price for the blockchain cryptocurrency.

First let's take an example of Google spreadsheet or MS Excel (Windows). This spreadsheet is shared among different networks of computer, where everyone has copy of it. The spreadsheet contains information of the transactions committed by real people.

This is Blockchain.

It works with Blocks, where as spreadsheet works with “rows” and “columns”. The data is added to the block in blockchain, by connecting it with other blocks in chronological others creating a chain of blocks linked together.

How Does the Blockchain Work?

A node starts a transaction by first creating and then digitally signing it with its private key (created via cryptography) . A transaction can represent various actions in a blockchain. Most commonly this is a data structure that represents transfer of value between users on the blockchain network. Transaction data structure usually consists of some logic of transfer of value, relevant rules, source and destination addresses, and other validation information.

A transaction is propagated (flooded) by using a flooding protocol, called Gossip protocol, to peers that validate the transaction based on preset criteria. Usually, more than one node are required to verify the transaction.

Once the transaction is validated, it is included in a block, which is then propagated onto the network. At this point, the transaction is considered confirmed.

The newly-created block now becomes part of the ledger, and the next block links itself cryptographically back to this block. This link is a hash pointer. At this stage, the transaction gets its second confirmation and the block gets its first confirmation.

Transactions are then reconfirmed every time a new block is created. Usually, six confirmations in the a network are required to consider the transaction final.

Defining digital trust

Trust is a risk judgment between different parties, and in the digital world, determining trust often boils down to proving identity (authentication) and proving permissions (authorization).

In the case of blockchain technology, private key cryptography provides a powerful ownership tool that fulfills authentication requirements. Possession of a private key is ownership. It also spares a person from having to share more personal information than they would need to for an exchange, leaving them exposed to hackers.

Authentication is not enough. Authorization – having enough money, broadcasting the correct transaction type, etc – needs a distributed, peer-to-peer network as a starting point. A distributed network reduces the risk of centralized corruption or failure.

Authentication is not enough. Authorization – having enough money, broadcasting the correct transaction type, etc – needs a distributed, peer-to-peer network as a starting point. A distributed network reduces the risk of centralized corruption or failure.