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As a distributed and decentralized archive, aimed at managing the transfers of digital assets, the Blockchain allows users to exchange digital values with each other in the form of transactions.

We’ll now show how Blockchain can achieve such goals.

What the Blockchain is

Essentially, the Blockchain is a

  • distributed archive

  • based on peer-to-peer networks

  • implemented through encryption

As a distributed and decentralized archive, aimed at managing the transfers of digital assets, the Blockchain allows users to exchange digital values with each other in the form of transactions.

In this way, there is no need to resort to third parties/authorities which guarantee transactions.

Blockchain’s Goals

Blockchain technology was originally introduced to support Bitcoin.

The main purpose was to prevent the phenomenon of double spending of cryptocurrencies, i.e. the possibility of spending the same currency several times.

However, the role of the Blockchain is not limited to the financial transaction sector.

In general, each transaction involving digital values can be recorded within a distributed ledger.

Blockchain technology

Blockchain technology can take different forms and implementations.

Therefore, it represents more a concept of an architectural nature than a specific and well-defined technology.

Each different implementation can also provide specific features and functionalities, such as the execution of smart contracts.

Blockchain transactions

The exchange of values between the counterparties within the Blockchain takes place by recurring to transactions.

The transactions are validated by the network of blockchain nodes, before being inserted into the distributed ledger.

Once appended to the ones already registered within the ledger, transactions become unalterable and unchangeable.

Blockchain’s blocks

By its very nature, as the name itself shows, the Blockchain is nothing more than a chain of blocks.

Each block within the Blockchain contains one or more transactions.

The addition of new blocks to the Blockchain takes place on the basis of predetermined time elapses.

In this way, it is possible to keep the overall history of transactions, by tracing the sequence of registrations made on the blocks.

The distributed ledger

In accounting terms, the blockchain can be considered a distributed and decentralized ledger, known precisely as the “distributed ledger”.

The management of the ledger takes place through the use of consensus protocols, which are designed to achieve the network’s consent on the transactions recorded within the ledger.

There are different types of consensus protocols, as much as there are different implementations of the blockchain.

Among the most common consensus protocols we can mention the Proof of Work (PoW), the Proof of Stake (PoS) and the Proof of Authority ( PoA).