How does Blockchain work?

What exactly is Blockchain?

Blockchain is a type of database, which has a chain of data stored in blocks,it has unique characteristics that differentiate it from traditional databases. The key features of a blockchain include decentralization, immutability, and security through cryptographic techniques.

Decentralization: In a traditional database, data is usually stored in a central location, and access is controlled by a central authority. In a blockchain, the data is distributed across a network of nodes (computers) that participate in the network. Each node has a copy of the entire database, and there is no central authority controlling the entire system. This decentralized nature makes it resistant to censorship and single points of failure.

Immutability: Once data is added to the blockchain, it becomes extremely difficult to alter or delete. Each block in the chain contains a reference to the previous block, and changing the information in one block would require changing all subsequent blocks, which is computationally infeasible. This immutability provides a high level of trust in the integrity of the data.

Security: Blockchain uses cryptographic techniques to secure transactions and control access to the data. Nodes on the network validate and agree on the transactions before they are added to the blockchain. The consensus mechanism (such as proof-of-work or proof-of-stake) ensures that malicious actors cannot easily manipulate the data or compromise the network.

The security of a blockchain relies on the cryptographic link between blocks. Each block contains a hash (a unique identifier) based on its data and the hash of the previous block. If someone attempts to change the information in a block, it alters its hash. As a result, the subsequent block's reference becomes invalid, breaking the chain. This interconnectedness makes it computationally infeasible to alter one block without changing every subsequent block—a feature that enhances the immutability and security of the blockchain.

While blockchain technology provides a high level of security and immutability, it's important to note that no system is completely unhackable. The security of a blockchain network depends on factors such as the consensus mechanism, network size, and the implementation of cryptographic techniques. Additionally, vulnerabilities in the software or smart contracts built on top of the blockchain can still be exploited.