Skip to main content

How Blockchain Records All the Transactions

Every business starts with a transaction among participants. Transactions involve the storage and exchange of values. These values are the essence of transactional data. Data must not only be stored securely, at the point of origin, but also must be safeguarded during the exchange as well as storage with other players.

Recording Transactions 

Let us understand how blockchain works with the help of an example. In a non-digital world of the past, had you bought a house, you would have paid a specific sum of money and would have agreed to pay the rest in installments, let’s say, over five years. You would record the amount paid as a transaction.

You would also keep the record safe and secure in a vault so nobody could tamper with it. Not only that, but you would also encode your record in a manner that even if the record lands in the hands of someone who cannot be trusted, the transaction cannot be interpreted easily.

Today, in the age of digital technology, record keeping can be made secure with blockchain technologies and for that, it becomes imperative to understand how blockchain works. Blockchain technologies provide a sophisticated system of record keeping.

Entries are recorded in sets, also called blocks of data. After the block reaches a certain number of records, a new block starts to be formed. Blocks are held together in a chain that forms a digital ledger. Each block is encoded by a mathematical function that generates complex hashes automatically by using the data in that block.

The hash for each block is stored not only in the block that it belongs but also in the next block in the chain. Now, for an attacker to change data in a block becomes harder. One, changing the data results in the generation of a new hash value. Two, the new hash does not match the hash that was recorded previously in the next block, resulting in the chain rejecting the new value.



Sharing Information with Participants

Let us get back, for a moment, to the ancient system of bookkeeping. The seller of your house would also keep a record of such transactions. You would share your code with the seller, so both of you could understand what was recorded.

Blockchain technologies share information by using Public Key Cryptography that uses a set of cryptographic keys – private and public keys. Private keys are secret keys that are supposed to be held privately. The sender of a message uses the private key to encrypt digitally signed messages.

These encrypted messages and a hash output can be sent to the receiver securely, using sharable public keys over a network. The receiver can then use the private key that is owned by the receiver only to decrypt the message and the hash and verify that the right sender indeed sent the message.

We hope you have found this articleinformative and interesting. For more information or queries contact us to knowmore about this technology.

Comments

Popular posts from this blog

Smart Contract Development Company in Washington

Smart Contracts are now essential to any blockchain-based business. The self-executing digital contract is the key to automate processes, transactions, and agreements, helping to reduce costs, hence security and end the very confusing and not reliable paperwork. Smart contracts are automated digital contracts that enable highly-secure and self-executing agreements to be formulated. They solve many issues faced in traditional contracts such as lengthy paperwork, the need for third-party intervention, and huge costs. Codezeros is the Smart Contract Development Company with the best solutions for your enterprise. Up to date with every new technology and innovation in the blockchain world. Our team of experts is focused on building an outstanding computer-based protocol. Customizable for any type of industry, the digital contract doesn’t need a middleman to ensure that all the parties involved are performing their part. Once all the rules and conditions are settled, its base algor...

Top blockchain App Development Company in Toronto

Nowadays, it’s quite a challenging job to find-out the best company that provides blockchain application development services. There are lots of companies in the market that offers blockchain solutions and are trying to take a first place in this field. Codezeros is a leading Blockchain app development company with high potential for perfection and innovation. To create Blockchain apps that revamps user experience has been our vision since inception.       Codezeros is a Top  blockchain App Development Company in Toronto  that has a highly dedicated team of expert developers who can craft apps perfectly according to your requirements. They provide customized blockchain app development solutions based on the client requirements and also deliver blockchain technology related other services with high quality at an effective cost. We develop next generation of Blockchain Apps for our customers using Ethereum & Hedera Hashgraph and many mor...

Security Token Offering Services(STO) | Codezeros

Stay at the top of growth wave with quality token development. Security tokens are just a more flexible version of regular securities, only more efficient. They are cryptographic tokens that pay interest and dividends or share profits to token holders based on an asset like shares, real estate, or bonds. Some of the major benefits of opting for STO development are as follows: Traded as securities Credibility Low Fees Decentralized assets remain decentralized An enterprise or a startup will sell its digital asset- its cryptocurrency, to its investors and whosoever, supports the project financially. This sale of their cryptocurrency or a fraction of it will happen in a pre-decided currency form of USD, Euros, or a cryptocurrency like bitcoin. This process will be followed by whitepaper creation and a pitch deck. Later on, after Tokenomics of the cryptocurrency and smart contracts, a pre-STO landing page is created. This process comprises of STO solutions that we provide. We...