How Block Chain Works? What is Block Chain Technology in Nut Shell

How Block Chain Works?  What is Block Chain Technology in Nut Shell

Detailed Explanation

•A node starts a transaction by first creating and then digitally signing it with its private key.

•A transaction can represent various actions in a block chain.

•Most commonly it represents transfer of value between users on the block chain network.

•Transaction data structure usually consists of some logic for validation.

•A transaction is propagated by using a flooding protocol, called Gossip protocol, to peers.

•Peers validate the transaction based on pre-set criteria.

•Usually, more than one node are required to verify the transaction.

Once the transaction is validated, it is included in a block.

•Then it is propagated into Block Chain network.

• The transaction is considered confirmed.

•The newly-created block now becomes part of the ledger and chain.

•The next block links itself cryptographically back to this block using hash pointer.

•At this stage, the transaction gets its second confirmation and the block gets its first confirmation.

•Transactions are then reconfirmed every time a new block is created.

•Usually, six confirmations in the a network are required to consider the transaction final.