Blockchain literally translates as a chain of blocks. Each of these blocks digitally stores certain information. In the case of cryptocurrencies, this is data about transactions (date and time of block creation, address, etc.). Any user can see this information, but cannot change it.
Each new transaction, regardless of its size, becomes a new hashed cluster. It consists of a unique set of characters and numbers created according to a certain algorithm.
Blockchain blocks are stored in nodes (nodes) that help synchronize and timely update data for all participants. Nodes come in full and lightweight versions. Full nodes store absolutely all blocks, light nodes store only the most recent blocks, but can also query previous blocks if necessary.
A number of events must occur before a block enters the blockchain.
First, the transaction must be verified. Unlike classic transactions, which are approved by a bank or payment system, in blockchain transactions are verified by a network of computers. Typically, networks consist of thousands or even millions of machines around the world.
Second, once a transaction has been verified, information is sent to the blockchain. It contains the date, time, amount and digital signature of both parties.
Finally, the block receives a unique encrypted identification code as well as the hash of the previous packet added to the chain. Once hashed, it can be added to the blockchain.
As we described above, all blocks appear in the chain in chronological order. It contains information about the date and time of the transaction, its own encrypted code, and the hash of the previous block.
Once the information enters the blockchain, it cannot be changed or deleted. As the Washington Post journalist noted, the key to the security of the technology is that all users of the network are notified of any changes. He also wrote that blockchain could be used by the U.S. military to protect information about its technology.
The second condition that keeps blockchain secure is the complexity of the proof-of-work process (Proof-of-Work). To change a blockchain, a hacker would need to solve a whole set of mathematical problems from nodes and miners, which is not that easy.
And the most important thing is the transparency of the network. Anyone can see information about blocks, which means full transparency of transactions. Since there are millions of computers on the network at any given time, it becomes almost impossible to hack the system and go undetected.