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What is Blockchain?
We have already told you that blockchain is actively developing and now even has several generations. But still, what is blockchain, why is it called decentralized, and how do new blocks appear? Let's find out!
Blockchain is a continuous and sequential chain of data "blocks". Copies of it are stored on computers around the world. It has no center through which all transactions are carried out, or the process is controlled. Because of this, the system is called decentralized.
Each block contains encrypted information in the form of a hash code. The hash is a mathematically generated set of characters, it is copied to the next block in the chain, thus connecting it to the previous one. Any corrections in the block lead to a change in the hash, which means that the code in the corrected block and the next after it will not match — this completely discredits the following chain; it is marked as fictitious and is not allowed. When blocks are added to the chain, the Blockchain system automatically checks the authenticity of the data of previous and new ones. Thus, it is impossible to replace or falsify information in the chain.
New blocks are added with the help of miners — these are computers that solve complex computational problems using the POW algorithm — in the case of first and second-generation blockchains — and POS — in the case of the third one — as a result of which new blocks are added. Depending on the power of the computer, it takes a different amount of time to solve the problem. For each solved block, the owners of the miners receive a reward in the form of coins of the corresponding cryptocurrency and transaction fees.
Storing copies of the chain on independent computers around the world, connecting blocks with a unique code, and control of changes — this set of functions makes the Blockchain system transparent as well as one of the most secure and independent from others. Therefore, it has become popular in various areas not even related to the financial industry.