Blockchain is cutting-edge technology. Blockchain is nothing but a distributed database that every connected node has on the network.
Courtesy Euromoney
Let's dive into the Transaction process of Blockchain.
1- Authorization:
First of all, a transaction is requested and this transaction is verified by a Private key. The user who requests the transaction has this key. Without this key, you can’t request any kind of transaction.
2- Authorization:
After the transaction is authenticated. Now, it is required for it to be approved before adding to the chain. Now, this step is done by consensus which is actually an algorithm. This means that majority of nodes of the blockchain network have to be agreed to this transaction. The nodes will get a reward for it. This is known as “Proof Of Work”.
Proof of work isn’t that effective. Because large firms buy a lot of machines (nodes) and then connected them to the blockchain network. That’s why they have a lot of shares in the network. To stop this kind of one side distribution, Blockchain has adopted Proof Of Stake validation consensus protocols. According to this, participants must have a stake in the network so that they can select, verify and validate. Now, Blockchain has included the “smart contracts” which automatically execute transactions when certain conditions are met.
After authorization, the block which is actually a piece of data is added to the chain and then this addition of block to the chain or you can say this transaction information is distributed to all nodes. So, that anyone can verify it using a public key.
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