Blockchain is based on peer-to-peer topology, that works as distributed ledger technology (DLT). Let’s discuss an example, to explain how Blockchain works, and the best way is to explain by using bitcoins:
- Consider a digital transaction ledger, in which all types of transactions are recorded and stored within a block, and once a block is filled, a new block is chained to it. Now, every bitcoin transferred has a public key and a private key associated with it. A public key contains the address of the user when the bitcoin is sent across a network. And the private key is the password of the bitcoin through which the receiver could gain access to the bitcoin or any digital asset for that matter.
Each transaction is stored in blocks and in a distributed way, thus bringing in transparency and one the information is logged that could be manipulated and that this database is immutable.
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