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Ethereum: A simple explanation of how blockchain works

Imagine -you are at a party and you want to give some beautiful things to your friends as a gratitude for coming. You can give them money or physical gifts, but this is not very effective, right? What happens if everyone had a copy of the list of what everyone wanted, so everyone could agree with whom he gets?

This is practically what is blockchain: a digital book (list) that follows transactions (what people want and give each other). But instead of using cash or physical money, uses special computer called « blockchain » to record everything.

Here’s how it works:

1. A group of people agree with the rules

A group of individuals called miners, who work together to create a new « block » (collection of transactions). They use strong computers to solve complex mathematical problems, which helps check if the block is valid. This ensures that a single person can add new blocks to the book simultaneously.

2. The transaction is registered in Blockchain

Rudar collects a group of transactions from all the people who participated in the party (ie they want to send something or receive something). Then combine these transactions in a single block and add them to the book.

3. The block confirms the miners

Rudar computers check the block of any error or duplicate, ensuring that the new transaction is valid. If everything looks good, the miner sends a new online block.

4. Everyone can see Blockchain

Once a new block is added to the book, it is visible to all participants. This allows anyone to believe that everyone has an accurate copy of the list (blockchain).

5. Miners receive prizes for their work

The miners received the recent ethreum chips (E ETER) to solve complex mathematical problems and locking checks. The more blocks, the more ether do!

How to work in practice:

• When you send someone an Ethereum, it is added to a new block on the blockchain.

• Blockchain is then broadcast to the entire network of miners.

• The miners check the transaction and add it to their copy of the book (Blockchain).

• Anyone can see an updated blockchain who assures everyone has the exact list.

Simply said, Ethereum uses blockchain technology to create a safe, transparent and unauthorized book for all transactions. The decentralized nature of the blockchain allows transactions with colleagues without the need for intermediaries such as banks or governments.

Although this explanation could take some time to understand, I hope it will help you understand how Ethereum works!