How Does a Blockchain Work- Simplified
Blockchain is a chain of blocks . It is a distributed ledger & open to anyone . All the blocks are chained and all of them contain information . A block contains 3 things :- 1) Our data/information 2) Hash 3) Hash of previous block .
DATA : Data contain information related to blockchain . For example , Let’s assume we have blockchain of bills . Then in data/information , we have name of payee , phone number , address , bill amount , etc .
HASH : Hash is always unique like human fingerprint for human . In the same way , Hash is unique to everyone .
1st block is called genesis block . It does not contain hash of previous block . When we create new information (or) record of bill , new block will be added to this blockchain . This block will contain our data & it also need unique hash and at last this block will have hash of previous block .
Every time information is added or altered , new unique hash is generated & inserted into that block .
What happens when we want to change information in hash ?
Let’s assume we have a block & we wanted to change information in it . With blockchain , changing information is very difficult . It is not like other where we can just change something by typing . We don’t change isolated data in the hash we created . Instead we create new block which have information about changes .
It means , a new bill number for that particular block is generated again . So , this technology res data differently in comparison to other technologies & helps us in tracking better than others .
When we create a new block , there is something evolved called as ” proof of work ” i.e, when we try to create a new block in blockchain , a cryptographic puzzle must be solved . The one who solves the puzzle shares the solution to all others . And whole network will verify this & after that new block is added .
Proof of work is the kind of algorithm to figure out which block will be added next . After this , blockchain becomes more secure . It will be distributed across large network of computers & everyone in the network have full copy of blockchain . If anyone tamper with any of the block , tampered block will be rejected by other nodes in the network thus making data more secure .
These are the reasons why block is revolutionary & everyone across the world is adopting its technology .