🔷 How Does Blockchain Work?

🏗️ Introduction

Blockchain is a revolutionary way of storing and verifying data without the need for a central authority. But how does it actually function?

At its core, a blockchain is a series of connected blocks, each containing transaction data, a unique identifier (hash), and a reference to the previous block. These blocks are secured with cryptographic principles, making the system tamper-proof and trustless.

In this guide, we’ll break down the step-by-step process of how blockchain records and validates transactions.

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🔗 Step 1: Initiating a Transaction

Let’s imagine Alice wants to send 1 SiriuX to Bob. Here’s what happens:

1️⃣ Alice uses her blockchain wallet to send 1 SIRI to Bob’s wallet address.
2️⃣ The transaction includes:

• Sender’s Address (Alice)
• Recipient’s Address (Bob)
• Amount (1 SIRI)
• Digital Signature (Alice's private key proves ownership)
  3️⃣ The transaction is broadcasted to the blockchain network, where multiple nodes (computers) will validate it.

✅ Key Takeaway: Transactions are not confirmed immediately—they must be verified by the network.

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🔗 Step 2: Transaction Validation (Consensus Mechanism)

Since blockchain is decentralized, there’s no single authority to verify transactions. Instead, nodes (computers on the network) must reach a consensus. This process varies depending on the blockchain type:

🔹 Proof of Work (PoW) – Used in Bitcoin

• Miners solve complex mathematical puzzles to validate transactions.
• The first miner to solve the puzzle adds the transaction to a new block.
• This process is called mining and requires significant computational power.

🔹 Proof of Stake (PoS) – Used in SiriuX

• Validators are chosen based on the amount of cryptocurrency they hold and are willing to "stake."
• Instead of competing, a random validator is selected to confirm the transaction.
• This is energy-efficient compared to PoW.

✅ Key Takeaway: The blockchain network agrees on transactions before they are confirmed.

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🔗 Step 3: Adding the Transaction to a Block

Once validated, transactions are grouped into a block. Each block contains:

📦 Transaction Data – Details of all transactions within the block.
🔢 Block Hash – A unique cryptographic fingerprint of the block.
🔗 Previous Block Hash – A reference to the last block in the chain.

This structure ensures that blocks are linked together, forming a continuous, immutable ledger.

✅ Key Takeaway: Each new block is cryptographically linked to the previous one, ensuring security.

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🔗 Step 4: Finalizing the Block (Immutability & Security)

Once a block is filled with transactions:
1️⃣ It is sealed with its cryptographic hash.
2️⃣ The hash is stored in the next block, ensuring a permanent, tamper-proof chain.
3️⃣ Any change in past blocks would require changing all subsequent blocks—which is computationally impossible.

🔒 Why Is This Important?

• If someone tries to alter a past transaction, the hash will change, breaking the chain.
• Because of decentralization, there’s no single point of failure.

✅ Key Takeaway: Blockchain records cannot be altered or deleted, ensuring data integrity.

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📌 Example: Alice Sends 1 Siriux Token to Bob

To understand blockchain better, let’s visualize a real-world example.

🔹 Alice sends 1 Siriux Token to Bob.
🔹 The transaction is broadcasted to the network.
🔹 Validators confirm its legitimacy.
🔹 It is added to a new block and becomes part of the blockchain.

🛑 Can Alice reverse this transaction?
No! Blockchain transactions are permanent and immutable.

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✅ Key Benefits of Blockchain Technology

✔ Decentralization – No single authority controls transactions.
✔ Security – Transactions are encrypted and immutable.
✔ Transparency – All transactions are publicly verifiable.
✔ Trustless System – No need for intermediaries (banks, payment processors).

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🎯 Why Blockchain Works the Way It Does?

Blockchain is a revolutionary system that enables secure, transparent, and tamper-proof transactions.

• Each transaction is verified by network participants.
• Blocks are cryptographically linked, ensuring data integrity.
• Once recorded, transactions cannot be altered or removed.

🚀 Next Lesson: "The Difference Between Centralized, Decentralized, and Distributed Systems"