How can blockchain technology be used?
The previous article provided a brief introduction of what blockchain technology is and how it differs from the conventional ledger technology we use today. This article will build on that to explain how a blockchain works and how it can be useful to different sectors.
Now, it is important to note that all of blockchain technology, whether it is cryptocurrencies or anything else, relies heavily on very advanced cryptography. As such, explaining how it works to the lay person can get quite technical. The following explanation is an attempt to convey the ideas behind blockchain without getting bogged down in the details.
Transactions in Blockchain
Before a transaction takes place and can be uploaded onto the blockchain, it needs to be verified. Let’s take an example. Person A wants to transfer money to Person B. The details of the transaction, along with other key information, is processed into a block. This block also contains a public key or password that every node has access to and a private key that only Person A has access to. contains the transaction information. The solving of this complicated problem simultaneously provides the details of the transaction and also authenticates it. Once the authentication is complete, everybody on the blockchain knows that Person A has transferred money to Person.