Best explanation of Blockchain technology| What Is Blockchain |How Blockchain works

Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.

Understanding how blockchain works and identifying myths about its powers are the first steps to developing blockchain technologies.

Blockchain is an algorithm and distributed data structure for managing electronic cash without a central administrator among people who know nothing about one another. Originally designed for the crypto-currency Bitcoin, the blockchain architecture was driven by a radical rejection of at (government-guaranteed) money and bank-controlled payments.

Blockchain is a special instance of Distributed Ledger Technologies (DLTs), almost all of which have emerged in Bitcoin's wake.

TYPES OF BLOCKCHAIN

1. Public blockchain
2. Private blockchain
3. Blockchain consortium
4. A Hybrid Blockchain


HOW DOES BLOCKCHAIN WORK STEP BY STEP?

We already know that a blockchain is a collection of blocks that store data. It was invented in 1991 by a group of researchers to preserve digital documents so that no one could edit or tamper with them.


A blockchain is a distributed property that anybody can access. Once data is recorded on a blockchain, it cannot be modified. Hence, data is only recorded when the maximum number of participants agrees.


The functioning of the blockchain is dependent on three components: data, hash, and previous block hash.


Step 1:Data

The type of data stored in a block differs based on the blockchain. If the data is about Bitcoin, the blockchain maintains information about a transaction such as a sender, receiver, and transaction amount.


Step 2: hash

A hash, similar to a fingerprint, is also included in the block. When a block is created, its hash is computed. If something changes within the block, the hash will change as well. That is why hashing aids in detecting changes in a blockchain. If a block's fingerprint changes, it is no longer the same block.


Step 3: Previous data hash

A hash of a previous block is the final piece in a blockchain. The hash of the preceding block aids in the creation of a chain, and as a result of these aspects, the blockchain is extremely secure to trust and use. In a blockchain, each block is linked to the previous hash's data, but if any of the blocks' data is tampered with, the hash changes instantly, and the subsequent block recognizes it and makes the changes immediately.


Computers nowadays are capable of storing hundreds of thousands of hashes each second. To make the blockchain valid again, the hash of tampered blocks is altered by default, as are the hashes of other blocks. This is accomplished with the assistance of proof of work that has been discussed above.


Conclusion
Blockchains are growing with time, introducing new developments like smart contracts, which have been shown to be extremely useful. Blockchain is a technology that has captivated many people due to its successful operation.