How does Blockchain work?
COVID19 has changed the world of work a lot in recent years. Different industries have to address different challenges due to these changes. From these changes, there is a pressure for companies to change processes and procedures and design them differently, also the introduction of new technologies is favored by challenges. We are working with Blockchain technology, unfortunately many can’t even imagine how this technology works and why it brings such great benefits.
So here is a little introduction:
Blockchain allows transactions to take place without a trusted third party, all participants are in a peer-to-peer network – so they have equal rights and can (re)track their processes transparently. However, past processes cannot be changed simply because the blockchain is structured chronologically. To do this, a computational task must be solved. This requires, on the one hand, a high computing capacity and, on the other hand, a lot of energy. This means that if a transaction is changed, it can only take place if the majority of instances in the peer-to-peer network confirm this information, e.g. Per Proof-of-Work.
Other ways to validate transactions include Proof-of-Stake (PoS), Proof-of-Authority, Proof-of-Burn, Proof-of-Capacity, or Proof-of-Elapsed Time.
A new block is needed? – You have certainly heard something about miners in the context of bitcoin. Miners are entities that validate blocks via computers with high computing power.
To do this, they must generate a matching random number, called: Nonce. This is very costly and, as you may have noticed, one of the drawbacks of blockchain, which work using proof-of-work. This is because this process consumes a large amount of power, but requires a large amount of computational capacity, making it less susceptible to tampering.
Once a miner has found the nonce, the chain may be extended and the miner is rewarded (with newly generated Bitcoins).
A little background fact: Bosch is currently exploring the Ethereum platform with projects like self-charging and self-paying cars at electric charging stations.