Dozens, hundreds, thousands, or more participants in the blockchain track and validate the transactions associated with it.Įach blockchain entry gets validated through consensus, where individual participants on a blockchain network must all “agree” that the data in each entry is correct. Yet one of the most important aspects of blockchain technology is this-it’s decentralized. This Hash becomes part of the next record.

The Previous Hash and Stuff (data) fields generate the Hash field. Over time, chains get added, which updates the hash as new blocks of data are added to the chain.Ī simplified example of a blockchain storing recipe instructions. Each ledger entry is a link in a “chain.” Within each chain is a unique identifier known as a hash and a block of data associated with it. How blockchains workĪn easy way to visualize how a blockchain works is with an old-fashioned ledger. In all, gaining a sense of how blockchain technology works will give you a further sense as to how it may eventually shape the way you go about your day.īlockchain technology holds great potential because of the unique, decentralized way it handles data-which marks the first step in understanding how it works.

It’s the foundational technology that underpins cryptocurrency and NFTs (non-fungible tokens), yet it has several other emerging applications as well. Understanding the basics of blockchain can help you understand several of the big changes that are taking place online. What’s blockchain technology? The term gets bandied about often enough, but it doesn’t always get the explanation it deserves.

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