Blockchain 101
What is Blockchain?
According to IBM, “Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.”
In simpler words blockchain is a network of blocks that holds information about previous transactions and their validity.
How blocks are formed?
When a transaction is initiated, miners (we’ll learn this later) starts to create a hash based on the previous hash, when the specified condition is matched, the miner publishes their work, then validators(we’ll learn this later) confirms those hash, and if validators confirm that hash, this transaction is added to the block, this block is then added to the chain, hence blockchain.
How the transaction is facilitated on the blockchain?
For transactions, you need to have a crypto wallet,
A crypto wallet is nothing much than a pair of keys, i-e, Private and Public Keys.
If you want to receive a payment, you’ll have to share your public key with the sender, whereas to send a payment you would require to use the private key.
A public key as the name suggests is made to be public, whereas your private key should be kept with maximum security because if this gets compromised your entire wallet is compromised.
There is also a concept known as Keyword phrases, which consists of 12–24 words that can be used to access your private key, in case you lose your private key, but these phrases are just a one-time deal, and cannot be regenerated obviously because of security purposes.
Types of Wallets:
There are two types of wallets in the crypto world, Hot Wallet and Cold Wallet.
1- Hot Wallets are those which are somehow connected to the internet, and you can access them from anywhere.
Examples of Hot Wallets are MetaMask, Binance, etc.
2- Cold Wallets are those which are totally offline.
Examples of cold wallets are USB Ledger and Paper wallets.
How Blockchains works are types of blockchains are, will be the next article.
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Ahmad Mustafeen
