Just like a car, appliance or the Internet itself, you don't need to know how blockchain works to use it. However, it may be useful to have a basic knowledge of this revolutionary new technology.
First, we have to pay attention to two fundamental concepts: the node, which is each of the networked computers that have downloaded the blockchain into its memory and uses software to distribute updated information in real time, and the miner, which are the machines responsible for controlling the transaction, thanks to high power computers and through a complex validation protocol.
Explained in a summary manner, the system members are responsible for generating the transactions included in the blocks, which will be registered and transmitted to all nodes in the network. This allows each node to always have up-to-date information (such as when multiple people work simultaneously with a shared Google Docs document, for example).
Transactions through the blockchain are carried out from electronic wallets or wallets, which are encrypted files that work very much like a bank account. These e-wallets have a public key and a private key. The first is an alphanumeric string between 26 and 35 characters, equivalent to an account number. Therefore, the recipient of the transaction must provide its public key to the issuer. In turn, the private key is used to authorize operations from each user's wallet, which is known as asymmetric cryptography.
All kinds of transactions from all kinds of wallets and related applications are continuously produced on the network. When detected by nodes, these operations become part of what is known as the connection pool of transactions pending verification. When this happens, miners will choose these unconfirmed operations, to create a new transaction block with them.
A block is the parts of a string that group sets of confirmed transactions, and consists of the following elements:
- An alphanumeric code that links to the previous block.
- A package of transactions.
- A second alphanumeric code that will link to the next block.
Each block is added to the string via a cryptographic hash or hash, that is, a fragment of code generated from various mathematical operations, which acts as a fingerprint in any data collection. In the case of Bitcoin, for example, the function known as SHA256 Hash is used, which creates a 64-digit hexadecimal number. However, another type of cryptocurrency, such as Ethereum or Litecoin, use different procedures.