Blockchain

Blockchain

A blockchain is a decentralized, distributed, and immutable digital ledger that records transactions across many computers so that the record cannot be altered retroactively without the alteration of 1 all subsequent blocks and the consensus of the network. The ledger contains like assets or money transfers between persons, that are linked together cryptographically in such a way that forging or inserting fake transactions is practically impossible.

The integrity of this sequence of transactions is guarded by thousands of networked computers working together to make sure that not one single computer can go rogue and dominate the blockchain sequence or decisions of the network.

This network of computers overseeing a particular chain of transactions is also sometimes referred to as “the blockchain,” even though, technically speaking, the blockchain is the chain of transactions, not the computers that secure and maintain it. That’s why one might talk about “which blockchain are you on,” referring to which particular network of computers one is talking about, as opposed to: “this blockchain sequence was forged,” referring to the interlinked chain of transactions. Which of the two is meant usually becomes clear through context.

There are many different networks, or “blockchains” out there, but only one true, valid “blockchain”, or sequence of transactions, in each network. You’ve probably heard of several of these blockchain networks: Bitcoin, Ethereum, or Litecoin, for instance. Each network must have only one valid blockchain transaction sequence otherwise any bad actor could insert their own transactions into the network. For every blockchain network, there is only one source of truth, the main blockchain transaction sequence, which goes back all the way to the very first moment the very first coin on the network was minted

  • Decentralized: No single entity controls the blockchain. It's shared across a network of computers.

  • Distributed: Copies of the blockchain exist on multiple computers, ensuring redundancy and security.

  • Immutable: Once data is recorded on a blockchain, it's incredibly difficult to alter or delete.

  • Ledger: A record of transactions, like financial transactions, asset ownership, or any other type of data.

Key Characteristics:

  • Transparency: Transactions are typically visible to all participants on the network.

  • Security: Cryptography secures the data within each block and the links between them.

  • Efficiency: Transactions can be processed quickly and efficiently, reducing the need for intermediaries.

Applications:

  • Cryptocurrencies: Bitcoin, Ethereum, and other cryptocurrencies utilize blockchain technology.

  • Supply Chain Management: Tracking the origin and movement of goods.

  • Healthcare: Securely sharing patient data.

  • Voting Systems: Enhancing the security and transparency of elections.

  • Smart Contracts: Automating agreements and transactions.

In simpler terms: Imagine a chain of blocks, each containing information. Once a block is added to the chain, it's extremely difficult to change it, making the records very secure and reliable.

person holding sticky note
person holding sticky note