Test Your Knowledge

Understanding Blockchain: Blocks, Hashing Functions, and Decentralization

• A block in cryptocurrency is a collection of records, usually transactions, and is called a ledger.
• Blocks have limits on the number of transactions they can hold, so more blocks are added to the network.
• To add a block to the network, it must be mined using a hashing function, which outputs a hash.
• The SHA-256 hashing function used in Bitcoin outputs 256 zeros and ones.
• Finding the input for a hash requires guessing and checking, and changing the input slightly changes the output drastically.
• Mining involves adding random numbers to a block to find a hash that meets certain criteria.
• A blockchain is decentralized, meaning that multiple people can access and verify transactions instead of one person controlling it.
• Asymmetric encryption is used to ensure the security of transactions in a decentralized system.
• Participating in a blockchain, such as mining, is rewarded with cryptocurrency.
• The hash of the previous block is added to a block, making each block a chain and ensuring the integrity of the blockchain.
• The blockchain is immutable, meaning that once something is added, it cannot be changed.
• The blockchain is useful for transactions but not for copyrighted material or personal information.