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What is a blockchain?

Blockchain is a technology which allows transactions between accounts to be stored on a network of distributed ledgers. The core feature of blockchain is the ability of the ledgers to stay up to date with one another, without a central authority.

How it works:

Transactions are sent by signing a transaction with a private key, which is akin to entering a passcode to do a bank transfer. The network protocol checks the signed transaction to make sure that the private key has the authorization to add the transaction to the ledger. 

Validators (also known as miners) then verify the transaction and place it into a block of transactions along with many other transactions from the same time period and a little information from the previously confirmed block. The new block is cryptographically sealed upon validation (confirmed), and sent to the other ledger holders. The network requires that a majority of the validators agree that the block is valid- this is called consensus. 

Once a transaction is placed into a block it is very difficult to reverse. It would take the majority of validators to agree to the change, and may not be possible at all if more blocks have been put on top of it already. This is why blockchain is a very secure historical record of transactions.

 

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