Block chain is a shared public ledger technology and it is used for securing stored transactions across self-regulating computers known as nodes. It is made up of decentralized distribution of a chain of blocks and it also gives access to all that have private and public keys for the transactions. Block chain is reliable for reducing the risks of fraud and it also help to add a lot of transparency to the block chain network. Block chain is made up of information about each of the transactions in digital transaction. The blockchain database is independently managed via a peer-to-peer system together with a distributed timestamping server.
Elements of block chain
There is a need to first understand the concept of the block chain technology before we can fully understand its mechanism. The following are the common elements of block chain:
- Distributed ledger: The distributed ledger consists of a record of shared data that does not involve any central administrator. Any transaction in the ledger is recorded once and helps to reduce the duplication of energy; this is unlike the networks of traditional business
- Immutability: It permits the ledger to remain without change. No participating can ever tamper with the transaction as long as they are recorded on the blockchain If there is any error in the transaction the error can be easily reversed by simply adding an entirely new transaction.
- Smart contracts: Smart contracts exist in virtually every part of the block chain network. They help in determining the conditions for digital transfer between the buyers and sellers or the network participants.
Block chain comes in different forms of network building processes. A block chain network can be established as a private network, a public network, a consortium and a permissioned network. Each of these types of block chain has its specific impact on the network.