How blockchain works: components and functions of the technology
![How blockchain works](https://i.sspdaily.com/news/2024/3/3/what-is-blockchain-1.jpg?size=355x198)
SSPDaily has prepared an article that explains the principles and components of the blockchain in a simple way. Learn about the work of this innovative technology that has found its application in finance, supply chain management, and even healthcare.
Blockchain features
A blockchain is a decentralized digital ledger that records the transactions of multiple computers. It is primarily used in the financial industry to increase security, transparency, and efficiency.
How it works
Blockchain operates on a peer-to-peer network where each participant, called a node, stores a copy of the complete blockchain. When a new transaction occurs, it is recorded in a block, which is then added to the chain. To maintain the integrity and security of the blockchain, a consensus mechanism is used, usually through proof-of-work or proof-of-stake algorithms.
Blockchain components
The key components of a blockchain are a decentralized network of nodes, a transaction history stored in blocks, cryptographic algorithms for data protection, and consensus mechanisms for confirming transactions. Blockchain technology guarantees the security and transparency of transactions by eliminating the need for intermediaries and allowing participants to interact directly with the network.