What is Decentralized Network (Blockchain)
Please read the article down below first so you can get a proper context for the current article.
I promise it won’t take long.
Definition
- Decentralized network is type of computer network where the control mechanism was done by a lot of people or participant rather than being a centralized network which is being control by one entity or people hence the term decentralized.
- This pretty much doesn’t give any single room for failure in this type of network because the network can operate normally even if one or more of it participants left in maintaining the network. But this doesn’t truly give it an immunity towards failing.
Note: Decentralized network is a vast topic and doesn’t only centered around cryptocurrency and blockchain itself. It can also include social media platform such as Mastadon, storage system such as InterPlanetary File System (IPFS) and many more.
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Now let’s get back to my article.
How it Work
This is a step by step guide on how a decentralized network work. (This example is can only be apply with Proof of Work (PoW) mechanism)
Participant in The Decentralized Network Will Create a Nodes
- Nodes is any type of computer that exist. For example, a laptop is a nodes. Participant usually create a nodes by downloading a certain software client that support blockchain.
- This software (Software is just another names for app but most of it only accessible via computer) can allow the nodes to connect to the decentralized network and download a copy of a certain blockchain.
Transaction are Broadcast Inside The Decentralized Network
- When a participant make a transaction, it is broadcast to all of the nodes in the decentralized network using variety of methods.
Nodes Validate a Transaction
- Every nodes that was created will validate the transaction to make sure that transaction is valid and the sender has enough fund to execute that transaction.
- Validation process can vary depending on the blockchain type. Some of the example for validation process is Proof of Work (PoW), Proof of Stake (PoF) and more. In other way we also call this thing as consensus mechanism.
Here’s a list for the validation process.
Nodes Add The Transaction Details Into a Block
- If the validation process was successfully done, the nodes will add the transcation details into a block (Block is a collection of digital ledger that contain every transaction details).
Miners Compete To Solve a Complex Mathematical Problem
- Miners are nodes that responsible to add new block inside a blockchain. They will do this by competing to solve a mathematical problem and anybody who solve it first will get the right to add the new block inside the blockchain.
- Then they will get a reward based on what cryptocurrency that was mined. (This only apply on blockchain network that use Proof of Work)
New Block got Added to The Blockchain
- Once this was done, there is simply no way to remove the block from the blockchain itself unless you destroy the whole blockchain network itself.
- This is because most block contain its own hash which is a unique identifier that contain cryptic combination of number and alphabet. If the data in the block was change, the hash also will change making it very difficult to tamper the blockchain without being detected.
All Nodes Will Update Their Copy of The Blockchain
- This is to make sure the nodes will have the same version of blockchain with other nodes in the network.
Rinse and Repeat
- Then, it’s just a matter of rinse and repeat. Every time a transaction was done, the same step will follow.
- All of this can be done 24/7 without stopping. The only way to stop it is by destroying the blockchain or shutting down internet which is almost impossible to be done.
Thanks for reading and as always keep learning about crypto everyday.
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(DISCLOSURE: This article contain affiliates and referral link for a certain cryptocurrency products or exchanges. This article also is not a financial advice and only for educational purpose.)
