1. Blockchain technology is a decentralized system that enables secure and transparent transactions between parties without the need for intermediaries like banks.
2. It works by creating a digital ledger or a chain of blocks that records and verifies all transactions across multiple computers, known as nodes, in a network.
3. Each block in the chain contains a set of transactions along with a unique identifier called a hash.
4. The blocks are linked together through the hash of the previous block, forming an immutable and tamper-proof record of transactions.
5. To add a new block to the chain, the transactions are verified and bundled together into a block by network participants called miners.
6. Miners compete to solve complex mathematical puzzles that validate the transactions, and the first one to solve the puzzle earns the right to add the block to the chain.
7. Once a block is added, it becomes part of the permanent blockchain, and the information stored within it cannot be altered without the consensus of the network.
8. The decentralized nature of blockchain ensures that no single entity or authority has control over the entire network, making it more resistant to hacking and fraud.
9. Blockchain technology is commonly associated with cryptocurrencies like Bitcoin, where it is used to facilitate and secure transactions.
1.0 However, the potential applications of blockchain extend beyond cryptocurrencies, with its benefits being explored in various industries such as supply chain management, healthcare, finance, and more.