Blockchain: how it works, applications and perspectives

Blockchain is a complex technology, but its structure can be reduced to a simple explanation. Essentially, it consists of small pieces of data, called blocks, that are sequentially linked into a database, called a blockchain. Due to the demand for such an innovation, cryptocurrencies have also become popular, which can be explored at https://wobitreview.com/cryptocurrencies-at-online-casinos/.

Blockchain functions as a growing list of data records, most commonly transactions. But today, the term itself refers to a particular type of distributed ledger technology. It is no longer limited to the use of transaction-linked systems. Thus, not all distributed registries are blockchains, but every blockchain is a distributed registry.

Architecture a and principles of operation

Cryptocurrencies, including bitcoin, are one of the successful practical applications of blockchains. Thus, it is true that every cryptocurrency is a blockchain.

Any blockchain consists of multiple blocks of data linked together, so one block contains both its own hash and the hash of the previous block. A cryptocurrency hash is a combination of letters and numbers and is built from the data contained in a particular block, so it is unique to each.

The average block size varies, but is typically between 0.5MB and 1.3MB. The information contained in a block can be divided into three parts:

• characterising the transaction, such as the time and date of the transaction and its amount of money;
• information about the participants of the transaction in the form of EDS;
• the unique hash of the block.

This architecture means that a change to the data in one block requires a change to all subsequent blocks. In particular, such adjustments lead to the generation of a new hash for it. In turn, a changed hash in one block requires recalculation in all subsequent blocks.

Features of

Typically, blockchains are peer-to-peer networks that function as decentralised databases. In most cases, they are open, so any changes within one network are visible to all of its nodes.

Another important principle of blockchain is ‘proof-of-work’. To contribute to the chain, users must use the processing power of their devices and pass tests, such as solving complex mathematical problems. While performing a proof requires a lot of time and energy, its result can be verified by other users with much less effort.

Cryptocurrencies, bitcoin in particular, use hash cash as a proof-of-work system. The complexity of the operation can be adjusted to control the rate at which new blocks are mined, keeping it preferably stable.

Benefits of blockchain technology

Experts generally highlight two of the most positive aspects associated with blockchains: data security and user identity protection. Security is ensured through a combination of several means offered by the blockchain architecture and the block content.

Each block includes a header with a time stamp, a hash of the previous block and other data that make data tampering very difficult and impossible. This structure, combined with the crowd control approach, prevents the editing and/or deletion of information from the blockchain.