Blockchain is a kind of online accounting ledger and a particular type of database. It works using very simple principles although its operation can get really complex. Unlike conventional databases, it does not reside in a centralized server, but in decentralized machines. This means it has no central manager and is located on a large number of computers around the world. A public blockchain is accessible to everyone, and its data requires consensus (based on rules) of financially motivated network participants (miners) in order to exist. However, keep in mind that blockchains may not always be public. In this way, transactions and data can be safely and permanently stored without a supreme central authority while preserving data integrity.
Transaction verification
The network itself is responsible for verifying transactions. Network users involved in validation (miners) receive network tokens (cryptocurrencies) as a reward for their efforts. This rewards can take the shape of Bitcoin, Ethereum, Litecoin or any other currency that the network issues. Miners can then exchange their cryptocurrencies for fiat money or decide to keep them as assets for investment or as a means of payment.
There are two different types of records in Blockchain technology – transactions and blocks. Transactions are similar to regular bank transfers in which one participant sends assets to another. Blocks are information that servers for confirmation of the correctness of transactions and to accept or deny their inclusion in the database. Miners are responsible for the creation of the blocks in the chain.
Miners verify each and every one of the transactions in a node. Therefore, spending the same coin twice or deducting assets from an incorrect account is impossible. If an incorrect address is entered into a transaction, this transaction is immediately blocked. The only kind of incorrect transaction would be if the sender enters an incorrect recipient address by mistake and this address exists in the network by means of coincidence. In this extremely rare case, it is not possible to rescind or return the transaction. Therefore, it is necessary to check the correctness of the address to which you wish to send your selected amount.
You can find more information on the principles on which blockchain operates here: https://medium.com/swlh/blockchain-principle-type-application-why-you-should-care-about-it-8c8a39113c7d
