How Blockchain works Pt I
In this article we are going to talk about how blockchain works through example by a transaction.
Imagine 2 people: Alyssa and Bobbi. These 2 people have Bitcoins and in this scenario Alyssa owes Bobbi 2 Bitcoins.
In order for Alyssa to send the owed Bitcoin to Bobbi, Alyssa will broadcast a message with the transaction that she wants to make all the miners in the network.
Alyssa will give the miners Bobbi’s address along with the amount she is sending included with a digital signature and Alyssa’s public key. The signature is made with Alyssa’s private key and the miners can validate that Alyssa is the owner of the coins.
Once miners confirm the transaction is valid, they will then put it in a block along with other transaction and then they will attempt to mine the block. It is done by putting the block through the SHA-256 algorithm.
The output needs to start with a certain amount on 0’s to be considered valid and the amount of 0’s needed depends on what is called the “difficulty”. The “difficulty” changes depending on how much computing power there is on the network.
To be continued…
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