{"id":7331,"date":"2022-09-23T15:14:54","date_gmt":"2022-09-23T08:14:54","guid":{"rendered":"https:\/\/bap-software.net\/?post_type=knowledge&#038;p=7331"},"modified":"2023-04-12T11:10:49","modified_gmt":"2023-04-12T04:10:49","slug":"how-does-blockchain-work","status":"publish","type":"knowledge","link":"https:\/\/bap-software.net\/en\/knowledge\/how-does-blockchain-work\/","title":{"rendered":"What is Blockchain? How does Blockchain work?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The idea of blockchain has been around since the 90s. However, it was first introduced in 2008 as the distributed ledger behind bitcoin transactions. As blockchain continues to grow stronger and become more popular with users, have you ever wondered \u201cHow does blockchain work?\u201d. This article will answer your question.<\/span><\/p>\n<h2><b>I. What is blockchain?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Blockchain is a combination of the two words \u201cblock\u201d and \u201cchain\u201d. This is a decentralized platform created to promote decentralization, transparency, and data security.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are many definitions of blockchain. According to IBM, Blockchain is a shared ledger, immutable that facilitates the process of recording transactions and tracking assets within a business network.\u00a0<\/span><\/p>\n<div id=\"attachment_7335\" style=\"width: 860px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-7335\" class=\"wp-image-7335 size-full\" src=\"https:\/\/cdn.bap-software.net\/2022\/09\/what-is-blockchain.png\" alt=\"What is Blockchain?\" width=\"850\" height=\"638\" \/><p id=\"caption-attachment-7335\" class=\"wp-caption-text\">What is Blockchain? &#8211; Image: operavps.com<\/p><\/div>\n<h2><b>III. The structure of blockchain<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Each block includes 3 main parts:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Data: Data will be different types of information depending on the blockchain network.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Hash of the current block: This is the identifier for each block. Each block has a unique hash and is considered our fingerprint.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Hash of the previous block: This is the hash that helps the blocks to link together and create a chain. The first block is called the primitive block because it is not associated with any other blocks.<\/span><\/li>\n<\/ul>\n<p><b>III. Types of blockchain networks<\/b><\/p>\n<h3><strong>1. Public Blockchain<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">This blockchain is open to everyone and it is owned by no one. Anyone with a computer and internet can join the network. People often use the public blockchain to exchange and mine cryptocurrencies.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bitcoin, and Ethereum are 2 examples of public blockchains.<\/span><\/p>\n<div id=\"attachment_7332\" style=\"width: 860px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-7332\" class=\"wp-image-7332 size-full\" src=\"https:\/\/cdn.bap-software.net\/2022\/09\/bitcoin-ethereum.jpg\" alt=\"Bitcoin and Ethereum\" width=\"850\" height=\"478\" \/><p id=\"caption-attachment-7332\" class=\"wp-caption-text\">Bitcoin and Ethereum &#8211; Image: todayscrypto.news<\/p><\/div>\n<h3><strong>2. Private Blockchain<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Like the name private blockchain network, it is only open to a few authorized users. A single organization controls the private blockchains, which are operated within a closed network.<\/span><\/p>\n<h3><strong>3. Hybrid Blockchain\u00a0<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">This is a combination of a public blockchain network and a private blockchain network. It can choose the participants in the blockchain and decide which transactions can be made public.<\/span><\/p>\n<h3><strong>4. Consortium Blockchain\u00a0<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Similar to a hybrid blockchain network, a hybrid blockchain network has both public and private components, but multiple organizations will manage a blockchain network.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Although these types of blockchains are initially more complicated to set up, they can provide better security.<\/span><\/p>\n<div id=\"attachment_7333\" style=\"width: 860px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-7333\" class=\"wp-image-7333 size-full\" src=\"https:\/\/cdn.bap-software.net\/2022\/09\/Four-types-of-blockchain-technology.jpg\" alt=\"Type of blockchain network\" width=\"850\" height=\"448\" \/><p id=\"caption-attachment-7333\" class=\"wp-caption-text\">Type of blockchain network &#8211; Image: techbullion.com<\/p><\/div>\n<h2><b>IV. How does blockchain work?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/bap-software.net\/en\/technology\/\">Blockchain technology<\/a> can automate most of the following steps:<\/span><\/p>\n<h3><strong>1. Record transaction<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">First, a participant in the blockchain network executes a transaction. Transactions are recorded as a block of data and include a variety of details.<\/span><\/p>\n<h3><strong>2. Reach consensus<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Blockchain does not have a centralized entity, transactions reside in a decentralized peer-to-peer network to be verified. Because of that, other members of the blockchain network begin to verify the authenticity of the transaction.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A consensus mechanism conducts the verification process. The transaction will be sent to the verification nodes. If the majority of the network agrees that the transaction is legit, then the transaction is verified.<\/span><\/p>\n<h3><strong>3. Linking blocks<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Once consensus is reached, transactions are written to the block, which is equivalent to a place in a ledger. In addition, it will contain a timestamp and a unique ID to secure it from any changes.<\/span><\/p>\n<div id=\"attachment_7334\" style=\"width: 860px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-7334\" class=\"wp-image-7334 size-full\" src=\"https:\/\/cdn.bap-software.net\/2022\/09\/how-does-blockchain-work.jpg\" alt=\"How does Blockchain work\" width=\"850\" height=\"450\" \/><p id=\"caption-attachment-7334\" class=\"wp-caption-text\">How does Blockchain work? &#8211; Image: 200lab.io<\/p><\/div>\n<p><span style=\"font-weight: 400;\">This block is formed and then connected to the previous block via a cryptographic-hashing protocol. And then a new block will form a link with this block. In this way, it creates a chain of blocks.<\/span><\/p>\n<h3><strong>4. Share Ledger<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">When data is updated on the ledger, all members in the network are also shared and updated in real-time. It cannot be reversed or modified. Likewise, a new transaction can be entered but the previous transaction remains unchanged.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So, \u201cHow does blockchain work?\u201d probably won&#8217;t be the question of many people. Hopefully, this article will help you get more useful information about blockchain as well as a basic look at how it works.<\/span><\/p>","protected":false},"author":25,"featured_media":7334,"template":"","meta":{"_acf_changed":false},"tags":[9290,9295],"blog-cat":[2074],"class_list":["post-7331","knowledge","type-knowledge","status-publish","has-post-thumbnail","hentry","tag-blockchain-technology","tag-cryptocurrency","blog-cat-blockchain"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.1 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What is Blockchain? How does Blockchain work? - BAP Sorfware<\/title>\n<meta name=\"description\" content=\"As blockchain continues to grow stronger and become more popular with users, have you ever wondered \u201cHow does blockchain work?\u201d. 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