Explanation About The Working Of Blockchain

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Explain the working of blockchain in a clear and concise format stating the whole procedure in a series of steps which are in sequence.

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Answered By 10 points N/A #317718

Explanation About The Working Of Blockchain

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1. A node starts a transaction by initially creating and signing it using a private key which is obtained via cryptography, it is represented as various actions in a blockchain. It represents the transfer of value from one account to another. A transaction usually contains different types of data such as account info of both receiver and sender, the amount being transacted and the various other details involved.

2. The transaction made is sent to multiple nodes using a certain protocol called Gossip protocol, and this is verified by various nodes using the criteria they have previously, and this also needs to be verified by a majority of nodes before it is added to the blockchain.

3. But once the transaction is successfully verified by the majority of the nodes, it is added to the blockchain and once added, it cannot be removed hence it is immutable.
4. Then when a newly created block enters the ledger, it cryptographically linked to the previous block using a hash link and pointer at which point the transaction gets its second confirmation and the blockchain it’s first.

5. Hence transactions are reconfirmed every time a new block is added and for a transaction to be considered final it needs to verify around six times. This is the case in a bitcoin network where each transaction is verified six times.

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