How Blockchain Technology Works?


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The term block-chain is a decentralized network of computers, whose data is encrypted and is a set of ledgers. Block-chain stores data across a network of computers. It is decentralized and distributed and also available for anyone and everyone to use.

By decentralized, it invariably means that data is not stored in a single computer that acts as a server. Rather, information is distributed across a network of computers. All connected but accessible by anyone. Data that is stored is encrypted. This makes it safe, secure and authentic. Block-chain has been described as the new internet and was created by Satoshi Nakamoto in 2009. In its literal term, block-chain is a chain of blocks that contain secure information. It is accessible to anyone but not owned by anyone.

How it works..

We shall look at how block-chain works.

As stated earlier, data is stored in a block (it is also referred to as a ledger in some quarters). This stored data can vary from transactions to documents or details. It all depends on what the developer wants to save.

Hash: A block also has a hash and this hash is unique to the other networked block. A hash identifies a block and its content. Any change made to the contents of a block makes the hash change in-line with its new properties. This hash is what detects changes to a block. Each block or ledger contains a data, the hash of the block and the hash of the previous block that precedes this block. The first block in a blockchain is called the Genesis.

Proof of work: A Proof-of-Work is a mechanism that slows down the creation of newer blocks. Thereby ensuring that it takes a longer time, about ten minutes for the proof of work before a new block is created.

P2P Network: This is an open network that allows for people to join. The P2P network helps with the distribution of the blockchain. The members of this group consist of the parties that are responsible for every data in each block and also for the blockchain process. Every newcomer to this network gets a full duplicate of the blockchain. When a new block created, it is sent to every member in the network for verification that it hasn’t been tampered with. Every member of the P2P creates a consensus of verifying the validity of each block. Any block that does not pass verification is then removed.

The process behind the Hash, Proof-of-Work and the P2P network makes blockchain highly secure and unable to be hacked.

Another point to make is that blockchain is very dynamic and always evolving. Because of this, other processes are being created in the blockchain methodology. Like the Smart contract. Smart Contracts are computer algorithms that are stored on the computer and can be used to exchange coins (but with a set of rules).

Block-chain technology has revolutionized the Internet and this technology can be used in almost all sectors of the society.


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  1. Way cool, some valid points! I appreciate you making this article available, the rest of the site is also high quality. Have a fun.

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