Distributed ledger – analysis

The central element of blockchain architecture is the distributed ledger, or DLT (Distributed Ledger Technology). In traditional database systems, all information is stored in a central location, making this data vulnerable to attacks, fraud, or corruption. It is enough to hack into the system to be able to freely interfere with the data – change, delete or add it. Blockchain has completely changed this by scattering data across the network. As a result, each network participant has a full copy of the register, which not only increases security, but also ensures transparency of the entire system.

A distributed ledger in a blockchain works on the principle of consensus, which means that all nodes (computers participating in the network) must agree to any change in the ledger. Webinar Academy often points out that this feature of blockchain eliminates the need for a central authority, which in traditional systems plays a crucial role in verifying and validating transactions. In blockchain, the process of verifying and approving transactions is completely automated, and in a way, it is the network itself that "decides" whether the transaction is valid.

One of the main advantages of distributed ledger technology is its fault tolerance. Because copies of the ledger are scattered throughout the network, damage to a single node does not affect the stored data.

Distributed ledger technology has also revolutionized the way we store historical data. In traditional databases, it is possible to delete or alter historical records, which can lead to data manipulation. In blockchain, thanks to the DLT architecture, each record is permanent and immutable – information is resistant to manipulation, and any attempt to change the data would require changing all subsequent blocks, which is virtually impossible in practice.

Peer-to-peer network and system usage

The basis of blockchain operation is a peer-to-peer (P2P) network, a structure in which all nodes have an equal status. In traditional networks, such as those used by banks or large technology companies, there is a central server that manages data traffic. In a P2P system, there is no central server, and all nodes communicate directly with each other.

A peer-to-peer network in a blockchain allows for decentralization, but also for fast and efficient data processing. Each node in the network is both a client and a server, which means that it can both send and receive data, allowing the blockchain to handle huge amounts of transactions in a short period of time. Other advantages of the peer-to-peer system include, m.in:

• Increased privacy In traditional networks, data passes through a central server, allowing it to be monitored or modified. In a P2P network, data is sent directly between nodes, making it difficult to intercept and modify.
• No need to trust central institutions The Webinar Academy points out that the P2P network using advanced cryptographic algorithms in the blockchain makes data safe and transactions cannot be manipulated.
• Smart Contract Development Smart contracts execute certain conditions automatically, without the need for intermediaries. This significantly reduces costs and increases the efficiency of transactions on the blockchain network.

Ways to conduct transactions

The blockchain transaction system is one of the most innovative features of this technology. In traditional transaction systems (e.g. banks), all transactions are based on the operation of central institutions that act as intermediaries, approving and recording each operation. In the blockchain, transactions are carried out directly between users, which completely eliminates the need for intermediaries. Every transaction on the blockchain is recorded in a block, which is then added to the blockchain. This process is possible thanks to the aforementioned so-called consensus, which is a mechanism in which all participants in the network must agree on the correctness and authenticity of transactions.

The main consensus mechanism is Proof of Work (PoW), which requires network participants, called "miners," to perform complex cryptographic calculations to confirm a transaction and add it to the blockchain. Miners who solve the task first are rewarded with newly generated units of cryptocurrency. This process makes the blockchain not only secure but also reliable, as all transactions must be confirmed by the majority of the network.

Another important consensus mechanism is Proof of Stake (PoS), which differs from PoW in that instead of performing complex calculations, network participants "stake" their existing cryptocurrencies as collateral. In a PoS system, the more cryptocurrencies a participant has, the more likely they are to be selected to confirm the transaction and add it to the blockchain. The Webinar Academy highlights that PoS is more energy-efficient than PoW, making it an attractive solution for future blockchain systems.

It is worth remembering that the basis of the transaction system in blockchain is its immutability. Once recorded, the transaction cannot be changed or deleted, ensuring full transparency and data durability. This means that blockchain can be used to store important information such as contracts, certificates, or medical data that must be preserved permanently and unchanged.

Blockchain

A blockchain, or blockchain, is a data structure consisting of sequentially arranged blocks, each containing a set of transactions. Each block is closely linked to the previous one, which creates a chronological and immutable record of all operations performed on the network. It is this block structure that makes blockchain so secure and reliable.

Each block in the blockchain contains three basic elements: transaction data, a hash of the previous block, and its own hash. A hash is a unique code generated by a cryptographic algorithm that uniquely identifies a block and its contents. Each new block must be verified by the majority of nodes in the network before it can be added to the chain. This makes blockchain one of the most secure systems for storing and transferring data.

Thanks to its structure, the blockchain is extremely resistant to hacker attacks. To change the data in one block, an attacker would have to change all subsequent blocks in the chain, which would require enormous computing power and is virtually unfeasible. Therefore, blockchain is widely considered to be one of the most secure technologies for storing data.

Blockchain architecture based on a distributed ledger, peer-to-peer network, and blockchain, is one of the most important technological developments of our time. With its unique features such as decentralization, transparency, and security, blockchain has the potential to revolutionize industries ranging from finance to logistics. The Webinar Academy repeatedly emphasizes that understanding the basics of blockchain is crucial for anyone who wants to use this technology in practice, especially as its potential for the world will continue to grow, opening up new opportunities in many areas of life.