Chapter 3: How Does Blockchain Work?
Blockchain is a complex concept, consisting of a blend of different technologies, each one a foundational pillar in making blockchain the revolutionary offering that it is. In this chapter we will explore these technical aspects individually and detail why they are so important.
We will examine how does blockchain work and explain in simple terms what each aspect of the technology contributes to the larger picture. The technical aspects we dissect will be:
- Peer to peer network
- Digital signatures
- Consensus protocols
- Byzantine Fault Tolerance
- Proof of Stake
- Delegated Proof of Stake (DPoS)
- Proof of Work & Mining
Some of these technologies are already ingrained in our day to day life, if you use Whatsapp for example you are sending messages encrypted through cryptography on a daily basis. Some are less commonly used like P2P networks, whereas consensus protocol are specialised to blockchain.
Each aspect of the technology plays a pivotal role in not only allowing blockchain to carry out its functions, in a secure and dependable way, but also in supporting and sustaining the network.
This chapter is designed to help develop a more technical understanding of the technologies that make up blockchain.