What are blockchain protocols and why are they important?

But to maintain how data is transferred across the networks in a secured manner, a set of protocols is required. Since blockchains are used for transactions, protocols play a very important role in data sharing so as to maintain the security of the cryptocurrency networks. What is Blockchain Protocols?

What are the four principles of blockchain?

The protocols aim to address the four principles: Security: Protocols maintain the security of the whole crypto network. Since the network involves the transfer of money so protocols define the structure of data and also secure data from the malicious users. Decentralization: Blockchain is a decentralized network.

What are the rules that govern a blockchain network?

These rules that govern a blockchain network are referred to as a protocol. It is essentially the common communication rules that the network plays by. Distributed Ledgers: Distributed ledgers are a type of database that are spread across the multiple peers and the records are stored one after the other in a continuous ledger.

What is a transaction in blockchain?

A transaction with respect to blockchain refers to an exchange of assets manages under the rules (smart contracts) of the blockchain. All peers on a blockchain network reach a consensus to verify transactions. This consensus is governed by an algorithm fed into the protocol layer of the blockchain.