{"id":1511,"date":"2021-09-30T12:32:12","date_gmt":"2021-09-30T10:32:12","guid":{"rendered":"https:\/\/climatetrade.com\/?p=1511"},"modified":"2021-11-23T14:54:36","modified_gmt":"2021-11-23T12:54:36","slug":"how-does-blockchain-actually-work","status":"publish","type":"post","link":"https:\/\/climatetrade.com\/how-does-blockchain-actually-work\/","title":{"rendered":"How does Blockchain actually work?"},"content":{"rendered":"<h2><span style=\"font-weight: 400;\">This post will cover how <\/span><b>blockchain technology <\/b><span style=\"font-weight: 400;\">works, th<\/span><span style=\"font-weight: 400;\">e <\/span><b>advantages<\/b><span style=\"font-weight: 400;\"> it presents, as well as its <\/span><b>disadvantages<\/b><span style=\"font-weight: 400;\">.<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">It is easy for newcomers to <\/span><b>mix up cryptocurrencies and blockchain<\/b><span style=\"font-weight: 400;\">. Although the first blockchain (Bitcoin) is a cryptocurrency, it does not necessarily mean all blockchains are (or will be) necessarily used as payment networks. <\/span><b>Blockchain technology<\/b><span style=\"font-weight: 400;\"> has <\/span><b>unique properties<\/b><span style=\"font-weight: 400;\"> without which we would not be able to guarantee such a high level of <\/span><b>transparency, decentralization and immutability<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you do not understand yet some of the concepts do not worry, we will explain them to you step by step. The following concepts, constitute the <\/span><b>foundation of blockchain technology<\/b><span style=\"font-weight: 400;\"> and we will go over them without getting too technical on the implementation details:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Distributed ledgers<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Consensus mechanisms<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Mining<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Public and private blockchains<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Blockchain platforms<\/span><\/li>\n<\/ul>\n<h4><b>Distributed ledgers<\/b><\/h4>\n<p><b>What is a ledger?<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Today, vast amounts of information are controlled and managed by institutions that we trust to act honestly. <\/span><b>Blockchain technology<\/b><span style=\"font-weight: 400;\"> enables a shift from today\u2019s centralized repositories of information to more <\/span><b>decentralized<\/b><span style=\"font-weight: 400;\"> robust fault tolerant <\/span><b>networks<\/b><span style=\"font-weight: 400;\">. Using blockchain technology, it is possible to imagine a future where we do not rely on centralized organizations to manage our data but we, the users, have greater control of our digital lives. So how do blockchains enable this? It starts with <\/span><b>simple accounting<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><b>Ledgers<\/b><span style=\"font-weight: 400;\"> are <\/span><b>data sources<\/b><span style=\"font-weight: 400;\"> that track accounts and <\/span><b>balances<\/b><span style=\"font-weight: 400;\"> of assets, they are fundamental to accounting and <\/span><b>tracking value<\/b><span style=\"font-weight: 400;\">. Today most ledgers are maintained in databases run by <\/span><b>central authorities<\/b><span style=\"font-weight: 400;\"> such as banks, credit card companies or governments. Record-keeping by <\/span><b>central authority is beneficial<\/b><span style=\"font-weight: 400;\"> for several reasons:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A <\/span><b>central authority<\/b><span style=\"font-weight: 400;\"> can maintain data <\/span><b>integrity<\/b><span style=\"font-weight: 400;\"> by <\/span><b>restricting access<\/b><span style=\"font-weight: 400;\"> to the ledger to authorised users.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The <\/span><b>data location<\/b><span style=\"font-weight: 400;\"> is known and <\/span><b>accessible<\/b><span style=\"font-weight: 400;\"> to the data curators this allows for <\/span><b>fast retrieval<\/b><span style=\"font-weight: 400;\"> and regulating <\/span><b>access to the data.<\/b><b><\/b><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><b><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-medium wp-image-1513 aligncenter\" src=\"https:\/\/climatetrade.com\/wp-content\/uploads\/2021\/09\/Picture3-300x174.png\" alt=\"\" width=\"300\" height=\"174\" srcset=\"https:\/\/climatetrade.com\/wp-content\/uploads\/2021\/09\/Picture3-300x174.png 300w, https:\/\/climatetrade.com\/wp-content\/uploads\/2021\/09\/Picture3-200x116.png 200w, https:\/\/climatetrade.com\/wp-content\/uploads\/2021\/09\/Picture3-400x232.png 400w, https:\/\/climatetrade.com\/wp-content\/uploads\/2021\/09\/Picture3.png 439w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/b><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Updates to a database are known as \u201c<\/span><b>transactions<\/b><span style=\"font-weight: 400;\">\u201d. The following are key properties for a <\/span><b>database transaction<\/b><span style=\"font-weight: 400;\">\u00a0 :<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Transactions need to be <\/span><b>atomic<\/b><span style=\"font-weight: 400;\"> (where all updates are applied to the ledger or none of them are).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Transactions need to be <\/span><b>durable<\/b><span style=\"font-weight: 400;\">, meaning they persist in the system and there is no chance of the change being reverted.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Transactions need to be <\/span><b>consistent.<\/b><span style=\"font-weight: 400;\"> Ledger data must be modified in a reliable permitted way.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">They also need to be <\/span><b>isolated. <\/b><span style=\"font-weight: 400;\">Transactions must be isolated one from another.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Recently, <\/span><b>distributed ledger technology<\/b><span style=\"font-weight: 400;\"> has gained popularity. Distributed ledgers do <\/span><b>not rely on a central authority<\/b><span style=\"font-weight: 400;\"> to maintain data. Maintaining agreements among the shareholders of the ledger is a difficult problem. Data integrity can be maintained using <\/span><b>public\/private key cryptography<\/b><span style=\"font-weight: 400;\"> which can verify who initiates transactions and that they are authorized to do so.<\/span><\/p>\n<p><b>Transactions<\/b><span style=\"font-weight: 400;\"> in a <\/span><b>distributed ledger<\/b><span style=\"font-weight: 400;\"> must have the same properties as a centralized ledger, they must be <\/span><b>atomic, durable and consistent<\/b><span style=\"font-weight: 400;\">. Accessing the latest data often takes longer in a distributed ledger system than a centralized one, because it takes time for the participants to agree on the ledger\u2019s state. Therefore the latest transactions are not immediately available to every node (participant in the network).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A ledger is <\/span><b>distributed <\/b><span style=\"font-weight: 400;\">when it has been securely replicated across geographic locations. Some features of DLT include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Consensus formation<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Peer-to-peer protocols<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Cryptographic infrastructure<\/span><\/li>\n<\/ul>\n<p><b>Blockchain<\/b><span style=\"font-weight: 400;\"> technology is a <\/span><b>version<\/b><span style=\"font-weight: 400;\"> of <\/span><b>distributed ledger<\/b><span style=\"font-weight: 400;\"> technology. It implements these features through a specific\u00a0 data structure called a \u201c<\/span><b>blockchain<\/b><span style=\"font-weight: 400;\">\u201d and <\/span><b>consensus mechanisms<\/b><span style=\"font-weight: 400;\"> such as proof of work, proof of stake, delegated proof of stake, proof of authority, etc.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>To know about <strong>&#8216;Why does ClimateTrade use blockchain technology to offset carbon emissions?&#8217; <a href=\"https:\/\/climatetrade.com\/why-does-climatetrade-use-blockchain-technology-to-offset-carbon-emissions\/\">click here<\/a>.<\/strong><\/p>\n<p class=\"entry-title fusion-post-title\">\n","protected":false},"excerpt":{"rendered":"<p>This post will cover how blockchain technology works, the advantages it presents, as well as its disadvantages. It is easy for newcomers to mix up cryptocurrencies and blockchain. Although the first blockchain (Bitcoin) is a cryptocurrency, it does not necessarily mean all blockchains are (or will be) necessarily used as payment networks. Blockchain technology has [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":1521,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[84],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How does Blockchain actually work? - ClimateTrade<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/climatetrade.com\/how-does-blockchain-actually-work\/\" \/>\n<meta property=\"og:locale\" content=\"es_ES\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How does Blockchain actually work? - ClimateTrade\" \/>\n<meta property=\"og:description\" content=\"This post will cover how blockchain technology works, the advantages it presents, as well as its disadvantages. 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