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BTC for dummies
According to Wikipedia, the term "blockchain" first appeared as "the name of a fully replicated distributed database implemented in the bitcoin system." Accordingly, 2008 can be considered the date of birth not only of bitcoin, but also of the blockchain, since this technology was first used in the bitcoin system.
Simple explanation. Blockchain is essentially a chain of blocks. Blocks contain digital information, think of them as packets of data tied up like a Christmas present. In the case of the Bitcoin blockchain: Within each block is a series of bitcoin transactions that took place over a period of time.
Contents
Blockchain technology is a system used in the construction of cryptocurrencies, which is a distributed database (ledger). Information about various transactions is recorded in the chain, and the blockchain works without communication with the central server. The main function of the blockchain is the storage of blocks (elements) containing time data and a link to the previous network node. Blockchain technology is constantly evolving, improving, revealing its potential and is increasingly being used in various fields.
Technology in simple terms
A blockchain network is an interconnected chain of blocks that operates according to certain rules. The account book is located on a set of PCs, after each operation it is updated. Various data are entered into the cells of the system, starting with information about transactions and ending with the ownership of any work by a specific author.
Blockchain is a chain of blocks connected to each other, filled with certain information (new records and information about the past node). Blockchain elements are filled with information about transactions in the network (user actions: transfers, purchases, registration of rights, and so on). After the operation is created, the transaction is sent to the mempool and awaits confirmation. As soon as the block is formed, the participants check it: in case of validity, they add it to the general chain. Accounts are constantly updated and always up to date (Bitcoin Fortress for reference).
Operations
A feature of a distributed network lies in the complete transparency and availability of information for each of the participants. The chain is under constant data verification, so forgery or changes to the already formed part of the chain are excluded. New information appearing on the blockchain is completely transparent and available for download by every user. In Bitcoin, when installing an official “heavy” wallet, a person downloads information about transactions to a PC for the entire life of the cryptocurrency. To obtain information about a particular operation, you should use special services, for example, blockexplorer.com. It is enough to enter the block number, operation or wallet address in the search box to get detailed information.
Decentralization
The governments of many countries are annoyed by the advantages of blockchain technology: independence and the inability to control the operation of the system. There is no central server for storing information, and information is located on the computers of millions of users. It would take a lot of money and a lot of power to get even a fraction of control. Blockchain technology has a fundamentally new structure and is ahead of existing systems in terms of reliability. Today, information about people, transactions, bank accounts and other data resides on one or more servers. If they are damaged or information is stolen, the system will collapse. With blockchain technology, this is impossible: the chain is not afraid of hackers and external influences.
Availability of copies on the PC of each user. The blockchain chain is simultaneously on tens of millions of computers, so there is no need to coordinate each transaction. When a new operation appears, it is validated by network participants. No one has the right to change the order of the blocks or make changes to the content. The key to a specific block with information is held by a specific user who has access to the information.
Data encryption
Automatic encryption of information ensures network confidentiality. A cryptographic principle is applied, which excludes the binding of a wallet number to a specific user. Information within chain elements is not available to third parties. High speed and accuracy of operations. Blockchain technology guarantees instant transactions without the involvement of intermediaries. Banking institutions, payment networks and notary offices are simply not needed. The correctness of the operation is checked by each user of the network with maximum accuracy.