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How Does Blockchain Work

What Is Blockchain Technology? A Step-by-step Guide For Beginners

What Is Blockchain Technology? A Step-by-step Guide For Beginners

What is Blockchain Technology? A Step-by-Step Guide For Beginners Angel Investors, Startups & Blockchain developers... Is blockchain technology the new internet? The blockchain is an undeniably ingenious invention the brainchild of a person or group of people known by the pseudonym, Satoshi Nakamoto . But since then, it has evolved into something greater, and themain question every single person is asking is: What is Blockchain? By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Originally devised for the digital currency , Bitcoin , the tech community is now finding other potential uses for the technology. Bitcoin has been called digital gold, and for a good reason. To date, the total value of the currency is close to $9 billion US. And blockchains can make other types of digital value. Like the internet (or your car), you dont need to know how the blockchain works to use it. However, having a basic knowledge of this new technology shows why its considered revolutionary. So, we hope you enjoy this, what is Blockchain guide. The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value. Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain. Information held on a blockchain exists as a shared and continually reconciled database. This is a way of using the network that has obvious benefits. The blockchain database isnt stored in any single location, meaning the records it keeps are truly public and easily verif Continue reading >>

How Does The Blockchain Work?

How Does The Blockchain Work?

The blockchain technology explained in simplewords The blockchain technology is probably the best invention since the internet itself. It allows value exchange without the need for trust or for a central authority. Imagine you and I bet $50 on tomorrows weather in San Francisco. I bet it will be sunny, you that it will rain. Today we have three options to manage this transaction: We can trust each other. Rainy or sunny, the losing one will give $50 to the winner. If we are friends, this could be a good way of managing it. However, friends or strangers, one can easily not pay the other. We can turn the bet into a contract. With a contract in place both parties will be more prone to pay, however, should any of the two decide not to pay, the winner will have to pay additional money to cover legal expenses and the verdict might take a long time. Especially for a small amount of cash, this doesnt seem the optimal way of managing the transaction. We can involve a neutral third party. Each of us gives $50 to a third party, she then will give the total amount to the winner. But hey, she could also run away with all our money. So we end up in one of the first two options: trust or contract. Both trust and contract arent optimal solutions: we cant trust strangers and enforcing a contract requires time and money. The blockchain technology is interesting because it offers us a third option which is secure, quick and cheap. Blockchain allows us to write a few lines of code, a program running on the blockchain, to which both of us send $50. This program will keep the $100 safe and check tomorrows weather automatically on several data sources. Sunny or rainy it will transfer automatically the whole amount to the winner. Each party can check the contract logic, and once its running on Continue reading >>

How Does Blockchain Technology Work?

How Does Blockchain Technology Work?

Vote for CoinDesk's Most Influential People in Blockchain 2017 As stated in our guide "What is Blockchain Technology?" , there are three principal technologies that combine to create a blockchain. None of them are new. Rather, it is their orchestration and application that is new. These technologies are: 1) private key cryptography, 2) a distributed network with a shared ledger and 3) an incentive to service the networks transactions, record-keeping and security. The following is an explanation of how these technologies work together to secure digital relationships. Two people wish to transact over the internet. Each of them holds a private key and a public key. The main purpose of this component of blockchain technology is to create a secure digital identity reference. Identity is based on possession of a combination of private and public cryptographic keys. The combination of these keys can be seen as a dexterous form of consent, creating an extremely useful digital signature. In turn, this digital signature provides strong control of ownership. But strong control of ownership is not enough to secure digital relationships. While authentication is solved, it must be combined with a means of approving transactions and permissions (authorisation). For blockchains, this begins with a distributed network. The benefit and need for a distributed network can be understood by the if a tree falls in the forest thought experiment. If a tree falls in a forest, with cameras to record its fall, we can be pretty certain that the tree fell. We have visual evidence, even if the particulars (why or how) may be unclear. Much of the value of the bitcoin blockchain is that it is a large network where validators, like the cameras in the analogy, reach a consensus that they witnessed the s Continue reading >>

What Is Blockchain Technology And How Does It Work? | City & Business | Finance | Express.co.uk

What Is Blockchain Technology And How Does It Work? | City & Business | Finance | Express.co.uk

Blockchain was created as the network on whcih bitcoin was transferred between parties The way the network operates is by utilising daisy-chained blocks of data which record and verify every single transaction that occurs. Each block contains a hash a digital fingerprint of sorts as well as timestamped batched of recent blockchain transactions. The technology likely to have the greatest impact on the next few decades has arrived These are all linked together to prevent any outside tampering and strengthens the verification process when assets are moved. Richie Etwaru, adjunct professor of blockchain management at Syracuse University in New York, believes the technology surpasses the ledgers that are in use today. The crypto expert said: The blockchain ledger is an epic upgrade on the ledger we have today. There are a couple of things that are very interesting about it. The first thing that is interesting about the blockchain ledger is every record that is written on a blockchain ledger has a unique key that goes with it. Blockchain technology facilitates the movement and recording of asset transactions Now you dont need to get into the details of cryptography or hash keys, just trust me when I tell you that there is a really really awesome unhackable key that is in every key on a blockchain ledger. The other thing that happens to blockchain is that every record is written and stamped by the trusted party that wrote that record. In the shipping industry for example, blockchain ledgers are used to streamline cargo shipments which require multiple sign-offs, cutting down on an otherwise endless trail of paperwork. Shipping giant Maersk was one of the first companies in March 2017 to adopt this technology, and has since partnered with IBM to develop a new blockchain for th Continue reading >>

What Is Blockchain And How Does It Work?

What Is Blockchain And How Does It Work?

When the cryptocurrency bitcoin hit nearly $12,000 last year, it pushed bitcoin and the technology behind it, blockchain, into the mainstream. But, blockchain technology isnt the easiest concept to get your head around. And when a simple Google search of what is blockchain brings back nearly 63m results, it can be hard to know where to start. Here is astraightforward guide to blockchain technology and what you need to know about it. Blockchain is also known as distributed ledger technology. Its like a distributed database, that millions of computers (often called nodes) around the world have access to and are constantly updating. Bitcoin is now worth more than the economy of New Zealand (REUTERS) Any data put into the blockchain must be verified. Transactions are grouped together in blocks, hence the name blockchain, then verified by the computers (nodes) in the network. When a computer joins the network as a node, they receive a copy of the blockchain which acts as proof of all the transactions that have been performed. This means that all data stored on the network is transparent; it is public by default. This also means that all the data in the blockchain network cannot be corrupted or deleted. However, this doesnt mean you can see who is doing the transaction. For instance, with bitcoin, the public can see that someone is sending an amount to someone else but there is no information linking the transaction to anyone. This is because the public keys linking the transaction are kept anonymous. As well, it is un-hackable because it doesnt have a centralised system. Instead, it is hosted by millions of nodes around the world, instead of being in one central place. What is Bitcoin? Everything you need to know about the cryptocurrency Due to the very open nature of block Continue reading >>

Bitcoin Is A Cryptocurrency Based On A Blockchain! But How Does Itwork?

Bitcoin Is A Cryptocurrency Based On A Blockchain! But How Does Itwork?

Entrepreneur, athlete, globetrotter, and web editor. I love to share my passions and ideas. Bitcoin is a cryptocurrency based on a blockchain! But how does itwork? The blockchain is born in the mind of Satoshi Nakamoto, a genius pseudonymous and unidentified creator of Bitcoin. Satoshi could be one person or a group of person. Satoshi Nakamoto described Bitcoin in 2008 as purely peer-to-peer version of electronic cash His motivation to create the blockchain was to replace the trusted third party. The blockchain is a public and secured database. This is a list of records of every entries and exits of information. The list is continuously growing. It provides proof of who owns what at any given juncture. Moreover, this ledger is repeat on many computers, the Bitcoins nodes. The ledger is distributed all around the world publicly The main difference of blockchain is: There is no financial middle man or central review body. It means, there is no trusted third party in the process of a blockchain. The security of the system is guaranteed by its consensus mechanism, the system of network nodes who work and agree on how to update the blockchain when there is a new order of transfers from one person to another. Lets try to explain this complex concept with the Bitcoin example. First, they both need to have bitcoin wallets. Its a software that allow you to access to blockchain. It can be compared to a browser for Internet. A wallet to Bitcoin is like a Mozilla Firefox to Internet, an access door. Then, James uses his cryptographic key to order the transaction. A cryptographic key is transforming plain text into cipher text or vice versa. The key is private and ensures secure communication. This is the core part of cryptographic operation. Mainly, Jamess wallet is asking to chan Continue reading >>

What Is Blockchain?

What Is Blockchain?

All of a sudden, blockchain is everywhere. The technology, which was invented in 2008 to power Bitcoin when it launched a year later, is being used for everything from copyright protection to sexual consent ( yes, really ). Considering the daily churn of news around blockchain, not to mention the skyrocketing value of Bitcoin and other cryptocurrencies that rely on the technology, you may be wondering what the hell blockchain actually is. Its actually a pretty simple concept, though things quickly get more complicated the harder you look. With that in mind, here are a few different ways to wrap your head around blockchain, from straightforward definitions to far-reaching metaphors. To start, heres the simplest explanation with no metaphors or hyperbole. In the language of cryptocurrency, a block is a record of new transactions (that could mean the location of cryptocurrency, or medical data, or even voting records). Once each block is completed its added to the chain, creating a chain of blocks: a blockchain. Because cryptocurrencies are encrypted, processing any transactions means solving complicated math problems (and these problems become more difficult over time as the blockchain grows). People who solve these equations are rewarded with cryptocurrency in a process called mining. If you own any cryptocurrency, what you really have is the private key (basically just a long password) to its address on the blockchain. With this key you can withdraw currency to spend, but if you lose the key theres no way to get your money back. Each account also has a public key, which lets other people send cryptocurrency to your account. Information on the blockchain is also publicly available. Its decentralized, meaning it doesnt rely on a single computer or server to function. So Continue reading >>

The Blockchain Explained

The Blockchain Explained

"The more we divulge things we know about them, the more theyll shift and change." bit.ly/2z3j0X1 The blockchain. Everyones talking about it. But what is it, how does it work, and whats it for? We get it: Ads arent what youre here for. But ads help us keep the lights on. So, add us to your ad blockers whitelist or pay $1 per week for an ad-free version of WIRED. Either way, you are supporting our journalism. Wed really appreciate it. Continue reading >>

How Does Blockchain Work?

How Does Blockchain Work?

Blockchain is a complex concept, consisting of a blend of different technologies, each one a foundational pillar in making blockchain the revolutionary offering that it is. In this chapter of the Lisk Academy we will explore these technical aspects individually and detail why they are so important. We will examine how blockchain works and explain in simple terms what each aspect of the technology contributes to the larger picture.The technical aspects we dissect will be: Some of these technologies are already ingrained in our day to day life, if you use Whatsapp for example you are sending messages encrypted through cryptography on a daily basis. Some are less commonly used like P2P networks, whereas consensus protocol are specialised to blockchain. Each aspect of the technology plays a pivotal role in not only allowing blockchain to carry out its functions, in a secure and dependable way, but also in supporting and sustaining the network. This chapter of the Lisk Academy is designed to help develop a more technical understanding of the technologies that make up blockchain. A Peer to Peer (abbreviated to P2P) network is a very important part of how blockchain technology works, and why it is so solid and secure. Here we will explore what is P2P and why it is such a vast improvement on the centralized systems we are familiar with today. A lot of people use cryptography on a daily basis without giving it a second thought as many popular messaging apps use encryption. It is also one of the core aspects of blockchain technology. In this segment of the Lisk Academy we will provide a simple yet detailed explanation of cryptography, both symmetric and asymmetric key cryptography. In some ways, digital signatures do what their names suggest: they provide validation and authenti Continue reading >>

25+ Answers - How Does Bitcoin Blockchain Work And What Are The Rules Behind It? - Quora

25+ Answers - How Does Bitcoin Blockchain Work And What Are The Rules Behind It? - Quora

How does Bitcoin Blockchain work and what are the rules behind it? What is Blockchain Technology? A Step-by-Step Guide For Beginners The blockchain is an undeniably ingenious invention the brainchild of a person or group of people known by the pseudonym Satoshi Nakamoto . By allowing digital information to be distributed but not copied, blockchains create the backbone of a new type of internet. Originally devised for the digital currency, Bitcoin, the tech community is now finding other potential uses for the technology. Bitcoin has been called digital gold, and for good reason. To date, the total value of currency is close to $9 billion US. And blockchains can make other types of digital value. Like the internet (or your car), you dont need to know how the blockchain works to use it. However, having a basic knowledge of this new technology shows why its considered revolutionary. The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value. Don & Alex Tapscott, authors Blockchain Revolution (2016) Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain. Information held on a blockchain exists as a shared and continually reconciled database. This is a way of using the network that has obvious benefits. The blockchain database isnt stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralized version of this information exists for a hacker to corrupt. Hosted by millions of computers simultaneously, its data is accessible to anyone on the inter Continue reading >>

Blockchain - Wikipedia

Blockchain - Wikipedia

For other uses, see Block chain (disambiguation) . Blockchain formation. The main chain (black) consists of the longest series of blocks from the genesis block (green) to the current block. Orphan blocks (purple) exist outside of the main chain. A blockchain [1] [2] [3] originally block chain [4] [5] is a continuously growing list of records , called blocks, which are linked and secured using cryptography . [1] [6] Each block typically contains a hash pointer as a link to a previous block, [6] a timestamp and transaction data. [7] By design, blockchains are inherently resistant to modification of the data. Harvard Business Review defines it as "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way." [8] For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority. Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault tolerance . Decentralized consensus has therefore been achieved with a blockchain. [9] This makes blockchains potentially suitable for the recording of events, medical records, [10] [11] and other records management activities, such as identity management , [12] [13] [14] transaction processing , documenting provenance , or food traceability . [15] The first blockchain was conceptualised in 2008 by an anonymous person or group known as Satoshi Nakamoto and implemented in 2009 as a core component of bitcoin where it serves as the public ledger for all transactions. Continue reading >>

What Is Blockchain And How Does It Work?

What Is Blockchain And How Does It Work?

Bitcoin exploded on to the worlds stage in 2012 as a currency backed by everyone and controlled by no one. But what exactly makes it work from a technology standpoint? Use commas to separate multiple email addresses How to minimize the risks of phishing scams Blockchain technology backs up Bitcoin to this day, but theres been a recent groundswell of interest from a variety of industries in making distributed ledger technology work. A blockchain is the structure of data that represents a financial ledger entry, or a record of a transaction. Each transaction is digitally signed to ensure its authenticity and that no one tampers with it, so the ledger itself and the existing transactions within it are assumed to be of high integrity. The real magic comes, however, from these digital ledger entries being distributed among a deployment or infrastructure. These additional nodes and layers in the infrastructure serve the purpose of providing a consensus about the state of a transaction at any given second; they all have copies of the existing authenticated ledger distributed amongst them. When a new transaction or an edit to an existing transaction comes in, generally a majority of the nodes within a blockchain implementation must execute some algorithms and essentially evaluate and verify the history of the individual blockchain block that is proposed, and come to a consensus that the history and signature is valid, then the new transaction is accepted into the ledger and a new block is added to the chain of transactions. If a majority of nodes do not concede to the addition or modification of the ledger entry, then it is denied and not added to the chain. This distributed consensus model is what allows blockchain to run as a distributed ledger without the need for some cent Continue reading >>

A Complete Beginner's Guide To Blockchain

A Complete Beginner's Guide To Blockchain

A Complete Beginner's Guide To Blockchain {{article.article.images.featured.caption}} Opinions expressed by Forbes Contributors are their own. The author is a Forbes contributor. The opinions expressed are those of the writer. This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe You may have heard the term blockchain and dismissed it as a fad, a buzzword, or even technical jargon. But I believe blockchain is a technological advance that will have wide-reaching implications that will not just transform the financial services but many other businesses and industries. A blockchain is a distributed database, meaning that the storage devices for the database are not all connected to a common processor. It maintains a growing list of ordered records, called blocks. Each block has a timestamp and a link to a previous block. Cryptography ensures that users can only edit the parts of the blockchain that they own by possessing the private keys necessary to write to the file. It also ensures that everyones copy of the distributed blockchain is kept in synch. Imagine a digital medical record: each entry is a block. It has a timestamp, the date and time when the record was created. And by design, that entry cannot be changed retroactively, because we want the record of diagnosis, treatment, etc. to be clear and unmodified. Only the doctor, who has one private key, and the patient, who has the other, can access the information, and then information is only shared when one of those users shares his or her private key with a third party say, a hospital or specialist. This describes a blockchain for that medical database. Blockchains are secure databases by design. The concept was introduced in 2008 by Satoshi Nakam Continue reading >>

Can Someone Explain How The Bitcoin Blockchain Works?

Can Someone Explain How The Bitcoin Blockchain Works?

Can someone explain how the Bitcoin Blockchain works? I'm trying to figure out how the blockchain works and how to read it via blockchain.info website. Is there a laymen way of explaining how the block chain works and how to read the blockchain to trace transactions? What I know so far is:the blockchain is just a public ledger of transactions on the bitcoin network. The methods of accessing data will differ between using Blockchain.info (web-based API) and Bitcoin-Qt/bitcoind (local API). If you are looking to pull all the blockchain data, you'll exceed access threasholds with Blockchain.info. –  Stephen Gornick Jul 31 '13 at 23:56 There are dozens of writeups about how Bitcoin works and the role of the blockchain. It would be much better if you would read one or two of them, and then ask specific questions about anything you don't understand. –  Nate Eldredge Sep 16 '13 at 20:30 If you are completely new to Bitcoin, you may find my second answer more accessible, which is a less technical description. As you said, the blockchain is a log of all transactions that were ever verified on the Bitcoin network. The transactions are collected in blocks, which are found approximately every ten minutes in a random process called mining. As transactions transfer ownership of Bitcoin balances, each of these blocks represents an update of the user's balances on the network. By following the blockchain from the Genesis Block and applying all transactions that were validated in each block in the correct order, you arrive at the current status quo. This is a hash of the previous block header which ties each block to its parent, and therefore by induction to all previous blocks. This chain of references is the eponymic concept for the blockchain. The Merkle Root is a reduced repr Continue reading >>

Blockchain 101: How This Emerging Technology Works

Blockchain 101: How This Emerging Technology Works

Home News Blockchain 101: How This Emerging Technology Works Blockchain 101: How This Emerging Technology Works Unless youve been living in Slab City or off the grid for a while, youve probably heard this years omnipresent buzzword blockchain. But perhaps youre a bit clueless as to what this newer technology entails. In a recent HSBC survey of 12,000 respondents in 11 countries, 80 percent of people could not explain how blockchain works. Dont worry, you are not hanging in the blockchain rafters alone. Im one of the 80 percent dangling right along with you and will attempt to simplify this emerging technology under the brass tacks of Blockchain 101. Blockchain is a distributed database that maintains a list of records. Each record is called a block, and each block contains the history of every block that came before it. Authors Don and Alex Tapscott of a book titled Blockchain Revolution [1] describe the blockchain as an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value. Steve Wilson of ZDNet says the following: 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. Wilson describes blockchain as a special instance of Distributed Ledger Technologies (DLTs), almost all of which have emerged in Bitcoins wake. The definitions listed above are correct, but all three definitions still tend to leave me (and perhaps you) dangling once againonly this time, were all sitting here peering t Continue reading >>

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