Blockchain: A Distributed ledger

Assets

Anything that is capable of being owned or controlled to produce value, is an asset. Tangible Assets Intangible Assets

  • Tangible Assets: Asset that has a physical form. e.g. Machinery, Buildings and Land.

  • Intangible Assets: Asset that is not physical in nature.

    • Intangible assets are subdivide as
      • Financial, e.g. bond
      • Intellectual e.g. patents
      • Digital e.g. music

Ledger

  • Ledger is a principal book (or computer file) for recording asset transfer between participants.

Ledger Accounts Ledger Distributed Ledger

  • Distributed ledger(shared ledger) is a ledger that is replicated, synchronized and spread across multiple sites, countries, and/or institutions.

What is Blockchain

Blockchain is an append-only distributed ledger, where records are stored in blocks, and blocks form a chain.

Blockchain

Every block contains transactions, that can be verified by any node in the network. Consensus is procedure to have an accurate Blockchain at every node. In the below every node has the same blockchain consisting of two blocks and thus every node has the same order or transactions stored. Consensus

How transactions are created and verified and put up into blockchain

There are two types of transactions in the blockchain network:

  • Coin base transactions: these transaction are the backbone of bitcoin blockchain. Coinbase trasaction are created by miner as a mining reward. This is also a way to put new coins into the system.

  • Transactions transfering assests ownership from one public key to another These trasactions are the manjority of the transaction we find into the blockchain network. These transaction basically involve signature by sender on the public key of recipient.

The flow of trasaction is in the below image.

How Blockchain works

Blockchain