Fundamentals of Blockchain

1. Public Distributed Ledgers

• A blockchain is a decentralized public distributed ledger that is used to record transactions across many computers
• A distributed ledger is a database that is shared among the users of the blockchain network
• The transactions are accessed and verified by users associated with the bitcoin network, thereby making it less prone to cyberattack

2. Encryption

• Blockchain eliminates unauthorized access by using the cryptographic algorithm (SHA256) to ensure the blocks are kept secure
• Each user in the blockchain has their key

3. Proof of Work

Proof of work (PoW) is a method to validate transactions in a blockchain network by solving a complex mathematical puzzle called mining.

Note: Users trying to solve the puzzle are called miners.

4. Mining

In Blockchain, when miners use their resources (time, money, electricity, etc.) to validate a new transaction and record them on the public ledger, they are given a reward.