How blockchain works
Let's understand the workings of the blockchain ledger in its simplest form. To understand the system in its generic form, it is important to use several states of blockchain and explore them further:
- Transaction preparation: At this stage, party A creates a transaction that includes information including the public address of the receiver, a source digital signature, and a transaction message. Now, this transaction is made available to all of the nodes in the blockchain.
- Transaction verification: The blockchain nodes work in a trustless model, where each node (the machine running the blockchain client software) receives this transaction, and verifies the digital signature with party A's public key. After successful verification, this authenticated transaction is parked in the ledger queue and waits until all the nodes successfully verify the same transaction.
- Block generation: The queued transactions are arranged together and a block is created by one of the nodes in the...
