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Blockchain by Mind Map: Blockchain

1. Today's problem of the financial world

1.1. corrupt

1.2. high fees with many third-parties

1.3. long transaction duration

2. How Blockchain solves these problems

3. Core concepts of Blockchain

3.1. consensus algorithm

3.1.1. Proof of work (PoW) Bitcoin

3.1.2. Proof of stake (PoS) Ethereum 2.0

3.1.3. process of ensuring that all the different users in a blockchain come to an agreement regarding the current state of blockchain

3.2. Peer2Peer Network

3.2.1. No centralized server

3.2.2. distributed application architecture that consists of computing devices connected to each other, without a central server

3.2.3. is more secure as there is no single point of failure

3.3. Distributed ledger

3.3.1. A ledger is a system containing all the records of a input and output of a process

3.3.2. A distributed ledger is a data structure which is spread across different computing devices

3.3.3. data is shared among all its users increasing transparency and avoiding corruption

4. How is a transaction added to the blockchain

4.1. 0. User A sends user B an amount

4.2. 1. The transaction is requested and authenticated.

4.3. 2. A block represents the created transaction

4.4. 3. The block is sent to every node (participant) in the network

4.5. 4. The nodes validates the block

4.6. 5. The nodes receives a reward after a successful validation

4.7. 6. The block is added to the latest block of the chain.

4.8. 7. The new block is distributed across the network

4.9. 8. The transaction is completed