Blockchain Technology; a New Paradigm_ The technological mix that created the blockchain

The technological mix that created the blockchain

Satoshi put together a clever mix of prerequisites that would make it possible to fulfill all the above conditions

#Cryptography
It is through cryptography that the algorithms that run and secure the transactions are developed. Through the use of digital signatures, a transaction is secured by ensuring that the information in the transaction can only be produced by the holder of the private key, hence securing the transaction.

#Peer-to-Peer Networks; Pooled resources

The bitcoin blockchain admits several types of members that make up its community

##Full Nodes: Computers that would be capable of keeping the ledger and constantly receiving updates of newly embedded blocks to add to the ledger, while also verifying the transactions being broadcast to ensure that they are genuine.

##Wallets: The destinations for all transactions, which are where the users keep their balances as indicated in the ledgers. A wallet need not work as a node.

##Miners: These are the participants who draw a reward from the blockchain to find blocks that will enable information about transactions to be immutably embedded into the blockchain. They also collect the verified transactions and hash them into the blockchain for a fee.

The beauty of the blockchain is that no one single entity is obligated to keep a central source of information, and therefore, it is possible to host the blockchain in a worldwide network.

#Decentralization
It is this decentralized network that is known as the blockchain. Decentralization serves a huge purpose in the blockchain. Since no one single person is trusted to decide wallet balances and the authenticity of transactions, everyone verifies every transaction and rejects suspicious ones. The majority wins. In short, the blockchain is the truest manifestation of ‘power to the people.'

#Management through consensus
Because of the decentralized nature of the blockchain, the set of rules that govern how everything is done is open and available to everyone. The rules have to be followed in an exact manner, all the time, without fail. That is how consensus is reached. If any of the rules have to change, the whole network is alerted, and mostly have to give an overwhelming consensus before any changes can be done. Any change of rules without a significant compatibility problem in the blockchain is called a ‘soft fork.'

If a large number of members feel they want a different set of rules, they will eventually orchestrate a ‘hard fork,' which is essentially a split in a blockchain. This is what happened when Bitcoin Cash was created from Bitcoin.