Blockchain technology is an advanced database mechanism that allows transparent information sharing within a business network. A blockchain database stores data in blocks that are linked together in a chain.
The data is chronologically consistent because you cannot delete or modify the chain without consensus from the network. As a result, you can use blockchain technology to create an unalterable or immutable ledger for tracking orders, payments, accounts, and other transactions.
The system has built-in mechanisms that prevent unauthorized transaction entries and create consistency in the shared view of these transactions.
The building blocks of blockchain and the blockchain mechanism
Blockchain building blocks and blockchain mechanism are key concepts in the field of digital ecosystem and cryptocurrencies.
Blockchain is a technology that allows transactions and events to be recorded in a decentralized and immutable system.
The basic building blocks of blockchain are the following elements:
BLOCKS
Blockchain is made up of a chain of blocks, where each block contains a list of transactions and a unique identifier (hash) of the previous block. This ensures the integrity of the data.
DISTRIBUTED LEDGER
Blockchain is stored on thousands of computers (nodes) around the world. Each node has a copy of the entire blockchain, which increases its resistance to outages and attacks.
CRYPTOGRAPHY
Asymmetric cryptography is used to secure transactions. Each participant has a private and public key, which enable the verification and signing of transactions.
CONSENSUS MECHANISM
Blockchain requires nodes to reach consensus on valid transactions. This is usually achieved through various consensus algorithms such as Proof of Work (PoW) or Proof of Stake (PoS).
IMMUTABILITY
Once data is stored in the blockchain, it cannot be easily changed. This ensures trust and transparency.
