Blockchain is an incorruptible digital ledger for economic transactions that can be programmed to record anything of value. The record of the transaction that was made can be fully public for public blockchains or private in the case of private blockchains.
Blockchain is an emerging technology that consists of a network working in consensus to maintain and propagate an immutable digital ledger.
As the name implies, blockchain is composed of a chain of blocks of data, where each new block references previous blocks in the chain. This ensures security, continuity, and at the same time prevents any change to the old blocks since any tampering of published blocks will cause a “fork” or a new chain and cause the tamperer to instantly be rejected from the system since the other honest miners will not validate the new chain.
Miners are in charge of processing data and running the algorithm that creates new blocks, but not just any miner can write data or create a new block. This process of selecting which miner can create a new block is called consensus.
Blockchain has several key components:
- Miners: participants who help secure and run blockchain by lending processing power to solve an algorithm. Miners also are in charge of processing inputs to the blockchain and writing them down on the blocks. Miners are rewarded with a blockchain’s native coin or token in return for work performed.
- Protocol: software that manages, regulates and propagates the blockchain. The protocol also contains the algorithm that miners solve for and that guarantees security and consensus. The consensus mechanism contained within the protocol is responsible for coordinating the actions of all miners and participants towards the creation and propagation of a new block. Any would be
- Blocks: contain the transactions on the blockchain. Blocks are produced at set intervals by miners.
- Nodes: any participant that is connected to the blockchain
- Wallets: digital containers of your cryptocurrency. Allows access to and manipulation of stored digital assets as well as provides the means by which you can receive and send cryptocurrency or tokens.
Examples of blockchains are: Bitcoin, Ethereum, NEO, Zilliqa, EOS,