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But what is Blockchain Technology? - Short & Simple



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Blockchain technology is a way to securely and transparently record transactions across a network of computers.
These computers participate in a variety of activities, including transaction processing, block creation and ledger management.
Each computer stores its own copy of the blockchain and utilizes cryptography to secure and validate transactions.
Ensuring that once a piece of information is recorded, it can not be altered or tampered with.

The technology is often referred to as a Chain of Blocks, because it is made up of a series of blocks that are linked together in chronological order.
Each block contains a list of transactions, a timestamp, and reference to the previous block in the chain.
And the chain is being referred to as the public database of these blocks, where each is immedietly encrypted upon creation.
This creates a secure, and transparent record of all transactions that is accessible to everyone in the network.

One of the key features of blockchain technology is that it is decentralized.
Unlike traditional systems where a central authority controls and verifies transactions,
blockchain technology relies on a network of computers, also known as nodes that work together to validate transactions.
In order to validate a transaction, at least 51% of the nodes must agree that the transaction is valid.
This means that in a blockchain with millions of nodes, it wont matter if a few nodes have malicious intent.
This decentralization makes the system more resilient to attacks and makes sure that no single entity controls the flow of information.

Another key feature of blockchain technology is its ability to create smart contracts.
Smart contracts are self-executing contracts with the terms of agreement written directly into the code.
These contracts can be programmed to automatically execute when certain conditions are met, such as when a payment is made or a deadline is reached.
You may have heard of the digital paintings known as NFTs.
As an example, let's say Bob wants to buy an NFT from Alice.
Bob sends the agreed amount of cryptocurrency to the smart contract.
The smart contract then verifies that Alice have received the funds
and automatically transfers the ownership of the NFT to Bob.
The smart contract also records the transaction on the blockchain,
providing a tamper-proof record of the ownership of the NFT.

In summary, blockchain is a decentralized ledger technology that records and verifies transactions on a network of computers.
Each block in the chain contains a record of multiple transactions and once added to the chain, the data in the block can not be altered or deleted.
This creates a permanent and secure record of all transactions,
making it suitable for use in financial transactions, supply chain management, voting systems and other applications where transparency, security and immutability are important.
Category
Cryptocurrencies
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