Blockchain Technology – CVJ.CH Academy

How does blockchain technology work?

The main difference between a typical database and a blockchain is the way the data is organized. Blockchain technology collects information into blocks, also called blocks, that contain information. Blocks have specific storage capacities, and when they are filled, they are appended to previous blocks. This creates a chain of data called a “blockchain.”

A database structures its data in tables, while blockchain technology – as the name suggests – structures its data in blocks (blocks) that are linked to each other. Thus, all blockchains are databases, but not all databases are blockchains. Thus, this decentralized system creates an irreversible data record. When the block is filled, it is set in stone and becomes part of this fixed schedule. Each block in the chain is also given an exact timestamp when it is added to the chain.

Decentralized structure

One of the main advantages of blockchain technology is decentralization. In traditional databases, central control usually comes from a central organization or authority responsible for the database, such as a company or government. On the other hand, decentralized databases are distributed across a network of computers, and no single entity has control over the database. This makes the database more secure and less vulnerable to hacker attacks or data breaches.

New information added to the blockchain in the form of blocks is constantly compared with the database, which is stored in multiple locations and updated periodically. All records in this database are public and verifiable. There is no central location for blockchain. Therefore, it is difficult to deal with the system because all the information exists in many places at the same time.

“Imagine a spreadsheet that has been replicated thousands of times across a network of computers. Then imagine that this network is designed to update the spreadsheet regularly. Then you have a basic understanding of blockchain technology.” – Amir Ruzek, Blockgeeks

Unlike a traditional database, a blockchain network can provide strong trust guarantees based on the cryptographic and game-theoretic properties of the system. For example, a user or developer can be confident that code running on a blockchain network will continue to work as intended. This is also the case when individual computers on the network try to undermine the system. The blockchain network enables unmediated peer-to-peer interactions and digital services owned by user communities rather than companies.

Blockchain technology uses encryption algorithms to ensure data security and integrity. Each block in the blockchain has a unique cryptographic hash that is generated based on the data in the block. This hash links the block to the previous block in the blockchain, creating a chain of blocks linked to each other. This process of linking blocks creates a permanent and immutable record of transactions.