How Blockchain Is Made
Innovative Blockchain technology was originally developed for Bitcoin cryptocurrency system. But later it was further developed and now also allows to store metadata in addition to information about transactions . It's intention is based on a huge database of common use operating without a centralized management and control.
Blockchain is a sequence of linked units, that contain the specific information. The blocks are filled with records about any events. New blocks are added to the end of the chain, duplicating the previous information blocks and adding a new piece of information. Blocks are stored on the computers of participants of the system, than can be located in any various part of the world. They form a giant computer network, that is based on the following principles:
How it operates
Each computer involved in Blockchain contains copies of all blocks, that makes the system immune. Its operation failure can only occur when all computers lose the information simultaneously. As soon as added blocks duplicate existing information, this only increases the damage resistance of Blockchain.
All Blockchain users are equal participants in the system. Administrators or moderators are absent. However, there are simple participants, forming a record of any events. And there are miners, whose task is the grouping the records into blocks and sharing them to other participants. Miner is rewarded with a certain number of virtual coins for his work.
When a record is formed by a simple participant, it is encrypted, but is available for the observing. Unconfirmed i.e. not included into block record is considered invalid. Blockchain members can still use them, but their information security is not warranted. Only information entered in the block is considered to be accurate and verified. Block becomes confirmed and since this moment it's no longer possible to edit or delete the recording.
Keys and identification of participants
Blocks and records contained there are available to each participant. You can open any block and see how the information has changed, check its authenticity. However, all the blockchain data is encrypted. User authentication in the system is performed using a special cryptographic key consisting of letters and numbers.
Key generation takes place by means of an algorithm called hashing. Using the key the system participant is able verify the information, but has no access to background information. But even the slightest change in information will also change the key itself. Therefore, the use of the keys provides distributed system protection and reliability, eliminates the double-spend (re-recording events).
The unit consists of a body and the header. The body contains all the records, and the header contains Blockchain important information. Blocks are interconnected through the keys contained in the headers. PMoreover keys of past transactions are also contained there, so it eliminates the possibility of network hacking.
Blockchain is a universal platform. If the original system was developed exclusively for Bitcoin and its forks, such as Litecoin, it is now possible to use it in other areas. Blockchain allows to account land registries, store information about bank loans, marriage, traffic violations. The interest to this platform by the different structures is growing rapidly.