What is blockchain technology quora

"Blockchain" is a term that gets thrown around a lot these days. With big movements in the price of cryptocurrencies like bitcoins, people are talking more and more about the technologies that form the backbone of these coins. But what is a blockchain in cryptocurrency? A Transactional Record The Bitcoin blockchain maintains a record of who has how many Bitcoins and what's been done with them. Every time someone makes a transaction, anew record is added to the blockchain that tells other users that some coins have been moved from one wallet to another. Unlike a bank ledger, however, the Blockchain is distributed and public. There's no one person who has control over it. Blockchains Are Made of Blocks The blockchain isn't one single document. Instead, it's a string of small pieces of data called "blocks." Each block points to the next one and has a special record that the network uses to verify the previous block. This record, called a hash, is the result of running a complex cryptographic algorithm on the contents of a block in the blockchain. Hashes prevent users from modifying the blockchain once a block has been verified. Distributed and Safe Cryptocurrencies are designed to be resilient. It was incredibly important to the minds behind Bitcoin that the currency remained safe against any single point of failure. The blockchain is a vital part when it comes to making this dream a reality. In order to keep the blockstring safe, it's duplicated on every node on the Bitcoin network. The Bitcoin network is a global group of Bitcoin investors and enthusiasts who run special software on their computers. You can join the network too by downloading a simple program and connecting it to the internat. Adding Blocks A new block is added to the blockchain at regular intervals. With some currencies, like Etherium, this interval is several seconds. With Bitcoin, a new block is added every 10 minutes. Cryptocurrency networks rely on miners to verify new blocks. These users use powerful computers to solve cryptographic functions and are often rewarded with cryptocurrencies for their trouble. If it takes a long time for your Bitcoin transaction to go through, this process may be the reason why. Miners don't process transactions on a first-come, first servedbasis. Instead, they allow people to pay them more money in order to jump the queue. If you're not willing to pay a premium, you'll have to wait for these users before your transaction gets added to the blockchain. How The Bitcoin Blockchain Works: A Step-By-Step Explanation Here's a quick run-through of how all of this works in practice. 1. Users on the network make new, unconfirmed transactions. In order to ensure that these users have sufficient funds, each transaction has to reference parts of the blockchain that record old transactions. Each transaction can only be mentioned once, but you're allowed to make a new transaction that sends yourself change. 2. These new transactions are collected by nodes, verified, and assembled into new blocks. These blocks aren't broadcast to the network immediately. The node has to solve a cryptographic function first that references the previous block. This requires a lot of processing power. For the Bitcoin blockchain, the function is solved about once every ten minutes on average. Whichever node solves this function first gets to add a new block. 3. When a block solves a cryptographic function (about once every ten minutes), it sends the new block to other members of the network. It's added to the and of the blockchain. It's possible (albeit unlikely) that two nodes try to add a block at the same time. When this happens, both nodes are added to the and of the blockchain simultaneously, forming two endpoints for the blockchain. When the next block is added, it can only be attached to one of these blocks. Whichever block it's attached to will remain on the blockchain forever, while the other one will be discarded. 4. Work begins on a new block, starting from step one. Users can now reference transactions in the block that was added in order to send each other Bitcoins. The Advantages of Blockchains Blockchains offer many advantages over traditional ledgers. They're distributed, so there's no single point of failure. Even if three-quarters of the computers on the Bitcoin network disappeared tomorrow, there'd still be thousands of copies of the blockchain we could continue to use. They're difficult to modify, due to the cryptographic technologies used to verify new blocks and hash old ones. Finally, they aren't controlled by a single authority. Every computer on the Bitcoin network can contribute to keeping the blockchain safe and adding new blocks. There's no way for an authority figure to exert its will over the whole system.

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