Blockchain technology allows ownership of digital assets regulate and secure more directly and efficiently, as it offers a complete and unchangeable data recording. This makes all authentication processes faster, more secure and cheaper.
All data is simultaneously stored in encrypted form on different computers and servers worldwide. The data are transaction data with e.g. monetary units, certificates, production and delivery data, audit log data, source code or digital values, which also include non-fungible tokens (NFTs). Each transaction is thus stored decentrally. Even if several of the computers and servers fail, the data can be retrieved reliably.
Transactions are stored in blocks, with each newly generated block relative to the block before the block. These blocks form a chain: "block" and "chain" = "blockchain". The chain continues indefinitely.
Each transaction is public but anonymous within the blockchain. It is thus comparable to a decentralized, open cash book (“open ledger”). This "open ledger" is not stored centrally on a server, but decentralized in the blockchain network. Each network participant can keep their own book. As a result, there are many independent copies on different computers.
If you now make a transaction, e.g. a transfer of cryptocurrency, you publish it in the network. So-called miners or validators then check whether the transaction is valid: is there enough money in the sender's wallet to be able to transfer the amount? If this is the case, by the "Proof of Work" consensus process the miners look for a key code to link the not yet validated transaction to the open cash book. The miner who manages this first receives a financial reward for the computing power expended. The miner publishes the found key in the network and the open cash books are synchronized.
The miners organize and secure the open cash book together. It's like a multi-eye principle. Invalid transactions such as trying to send more cryptocurrency than you have from A to B will be rejected by the network, the transaction will be rejected.
The transfer is now valid. For information about the other leading consensus process click "Proof of Stake".
