Blockchain (a subset of Distributed Ledger Technology) is a data ledger, forged with consensus, secured by cryptography, distributed over a trusted/ trustless network of P2P, unwired/ wired, nodes over intranet / internet, which can be configured to be public or private.
It constitutes data blocks in chronological & irreversible sequence, each containing set of transactions, bundled together and added at the same time. The block is formed, upon consensus among the designated nodes, about the validity of transactions contained in it. Each block contains fixed no. of transactions along with cryptographic code and reference to previous block and time stamp. These transactions are immutable i.e. they can’t be modified or deleted.
First block of the Blockchain is called Genesis block. As seen in the figure, each block contains following:
Set of transactions, executed at the same time
Merkel tree root for transactions within the block
Hash of previous transaction
Consensus Nonce (number used once)
Blockchain DLT has primarily two types of actors. First is human, who is a seller/buyer of crypto-currency or some asset using application running on Blockchain. He creates transactions for Blockchain. Second could be human or node, who validates the transaction, builds new blocks, signs them with cryptographic codes and publish in block chain. Such validating nodes arrive at consensus based on algorithms followed in respective architectures.
Merkel tree root is a binary hash tree, a tamper proof mechanism, used to store hashes of the individual data in the block, which facilitates verification of data.
In Blockchain each block contains hash of previous block, except Genesis block. Each block gets appended to the Blockchain by linking with hash of previous block. If a block is required to be changed, then each preceding block also requires to be modified, which makes blockchain immutable.
Nonce is a 32 bit arbitrary no. used for mining process in Bitcoin, using game theory and complex algorithms.
Blockchain is in essence a distributed consensus i.e. a way of agreeing on the state of database.