How Blockchain Works
By: The Ubrican
Tags: Cryptocurrency, P2p, Cryptography, Ubricoin, Blockchain

Care to know how..

Vincent O.

How exactly does this blockchain technology work? I can tell you one thing, you don’t need to be a computer scientist to understand this. I mean I have never been to a computer science 101 class but I have an idea on how it works. Blockchain relies on three major process:

(a) open ledger, (b) distributed ledger and © miners.

Open ledger

Blockchain is a public ledger. This means that the chain of transactions done on blockchain are open for everyone to see. Provided you are in the network, you are able to see where the money is, where it is going, and where it has come from. This is regardless of your location, be it in Africa or in Europe. The open ledger shows how much money each of the actors has in his or her wallet. By being a public ledger, everyone can decide whether a transaction is valid or not. The interesting part is that if a transaction is not valid, it is not added to the open ledger. It is rejected and does not become part of the chain. This makes it difficult for fraudsters to get away with your money.

Distributed Ledger

Blockchain’s main goal is to get rid of centralized ledger like we see in the banks. Blockchain therefore takes the centralized ledger and distributes it across all actors. An actor is any person in the network running the software application on his or her computer or mobile device. They are also referred to as nodes. Take a network of four actors in different parts of the world, A (in Asia), B (in Africa), C (in America), and D (in Europe), actor A’s application downloads and continually updates a copy of the ledger, so does actor B, and so does actor C, and so does actor D. Each of the four has the same copy of the ledger updated continuously. Anyone else who joins the network will have the same copy of the ledger. The ledger is distributed across a network of nodes. This means there is no centralized ledger. To avoid problems, all the copies of the ledger in the network must remain synchronized. All participants in the network must see the same copy. But how exactly does this synchronization work? This leads to the third principle of the blockchain, the miners.

Miners

Miners are special nodes which can hold the ledger. Since there is an open ledger that everyone can see and the ledger is distributed across multiple nodes. To synchronize the ledger, the miners compete among themselves to validate transactions and put them on the ledger. The first miner who will validate the transaction will get a financial reward, for example a Bitcoin.

Synchronizing the ledger across the network, a miner will be able to solve the transaction and add it to the ledger. The miner will then broadcast that information to the entire network. He will say, “Here is a validated transaction and here is the key that enables everyone on the network to take it and add it to their own ledger.” Once this is done, the other miners will see that the transaction is already validated and added to the ledger, which means there is no point in trying to solve this transaction again. The other miners will immediately take this transaction, add it to their own ledger and will look for another transaction to work on, and hopefully get a reward next time.

Blockchain is as simple as that. Three processes that ensures the safety and authentication of your transactions.

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Originally published at Ubrica World Cafe (UWC)