In the last session, we took a peek into the basics of Blockchain Technology and the very basic components that constitute the technology. Today we learn about the Components of Blockchain Technology as we delve a little deeper into the more complex aspects and try to understand what these components actually do and the part it plays in running the entire technology.
Components Blockchain Technology: Networks and the Blocks
As we learned in the last session that each block in a Blockchain is constituted of a ledger which holds the details of every transaction and how exactly the blocks are arranged in a sequence.
A Blockchain Ledger happens to be distributed across a network. Let’s remind ourselves of the fact that one of the main reasons Blockchain Technology has been adopted till date is because it can be decentralized. The decentralization happens since, the nodes or the terminals of that particular chain has a copy of the ledger and get updated as soon as any transaction takes place, with the necessary details. For ease of understanding, we can compare a ledger as something similar to a distributed LOG file. Only in this case, the log files are spread across the network and are updated real-time and record its entry everywhere as and when any transaction happens.
Components of Blockchain Technology: Parts of a Blockchain Ledger
In Components of Blockchain Technology, the components of a Ledger does record and store the details of the transactions that take place from time to time and are updated on a real-time basis across the network. Probably, the most renowned cryptocurrency, Bitcoin, and definitely the very first one, had 3 specific components. However, others too might have components which may not be the same as Bitcoin, but definitely, the basic components would remain the same, i.e. The details of a Transaction and the way they are stored. In the Components of Blockchain Technology in Bitcoin of a Blockchain Ledger mentioned as under:
- The INPUT Component: The INPUT components of Blockchain Technology contains information that a particular person already has a Bitcoin in his/her possession. The person in possession of the same might have bought it from some other user or possessor and this entry forms the very FIRST part or the INPUT component of the ledger.
- The AMOUNT Component: As the name suggests, the AMOUNT portion has the details of how much is the current value of the BITCOIN, that is currently being held.
- The OUTPUT Component: The OUTPUT component marks the details of the whereabouts of the recipient or the person who is supposed to receive the Bitcoin so that the same could be transferred to the right person without any failures or mistakes.
In the next session of the Cryptocurrency tutorial, and Components of Blockchain Technology, we focus mainly into how the transaction actually happens for a Bitcoin, considering the fact that there are actually no such physical or even virtual coins that actually exist with either the sender or the receiver.
Suggested Blockchain Topic
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