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· 29 Nov 2021

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How Blockchain Works

Blockchain is a piece of software designed to create database.

The program is a completely "open source" system, which means anyone can view, edit and propose changes to its code base.

Although it has become very popular due to the growth of Bitcoin - it has actually been around since 2008, making it almost ten years old (ancient in terms of computer).

The most important point about "blockchain" is that it is designed to create applications that do not require a centralized data processing service. This means that if you use a built-in system (i.e. Bitcoin) - your data will be stored on 1,000 "independent" servers around the world (which are not the owners of any central service).

How the service works by making a "ledger". This ladder allows users to perform "tasks" with each other - having the content of those agreements stored in new "blocks" for each "blockchain" site.

Depending on the application that creates the functions, it must be encrypted with different algorithms. Because this encryption uses cryptography to "irritate" the data stored in each new "block", the term "crypto" describes the process of encrypting any new blockchain data that an app might create.

To fully understand how it works, you must realize that "blockchain" is not a new technology - it uses technology in a slightly different way. At its root is a data graph known as "merkle trees". Merkle Trees is actually a computer program for storing "timely" versions of a set of data sets, allowing them to control the continuous development of that data.

The reason this is important is because the current "data" systems are the ones that can be described as "2D" - meaning they have no way of tracking updates to the main database. The data is completely stored as it is - with any updates applied to it directly. While there is nothing wrong with this, it causes a problem because it means the data has to be manually updated, or it is very difficult to update.

The solution provided by the "blockchain" is actually the creation of "versions" of the data. Each "block" added to a "chain" ("web chain") provides a list of new functions for that data. This means that if you are able to integrate this functionality into a system that facilitates data marketing between two or more users (messaging etc), you will be able to create a completely independent system.

This is what we have seen with the popularity of Bitcoin. Contrary to popular belief, Bitcoin is not “money” in itself; is a public book of financial transactions.

This public ladder is encrypted so that only participants in the sale can view / edit the data (hence the term "crypto") ... but moreover, the fact that the data is stored, and processed banks (its large drawing).

Obviously, problems with the basic concept of Bitcoin etc aside, the essence of the service is that it is basically a system that works across a network of processing machines (called "miners"). All of this uses "blockchain" software - and works to "integrate" new transactions into "blocks" that keep the Bitcoin site up to date as much as possible.

Although many people have unwittingly promised to support the blockchain, it actually has significant risks - most notably relying almost entirely on the encryption algorithms used by its various systems. If one of these algorithms fails, or users are at risk in any way, the entire "blockchain" infrastructure may suffer as a result.

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