When it comes to things like blockchain technology, people decide to outsource their learning by asking others for simple explanations. Unfortunately, there aren’t many quick references available on the Web. If you’re reading this article & you know nothing about blockchain, we consider ourselves lucky to provide a great place for you to begin your learning process.
What actually is a Blockchain?
Bitcoin is breaking record after record, but there must be more to the technology than just crypto, or not? Well, we can take a look at the underlying technology first to understand what it actually provides to us.However understanding blockchain far easier than you might think. The name itself clearly states that this blockchain is nothing but a chain of blocks, where chain is nothing but network & block is nothing but data.
Blockchain Technology
Blockchain technology itself is nothing completely new. It's a combination of existing technologies creating something new and exciting, tackling very specific problems while being broadly applicable. Generally speaking, you deal with a peer-to-peer network where no client talks to a central server but to many other clients.
This peer-to-peer network comes with a distributed database. Data is shared among all clients of the network. The data forms a chain where each block points at its predecessor in some form.
Placing individual entries into the chain would be inefficient which is why multiple entries are actually batched into blocks. This means that each block contains several data entries (thus the name of the technology).
To establish trust between all clients, or in other words, make sure that no one simply changes the chain and sends a fake one to your client, blocks contain a cryptographic reference. This reference often takes into account the content of the current and the previous block so that the correctness of a block and the whole chain can be verified.
The process of appending a new block to the chain is either called mining or forging, depending on the actual blockchain implementation.
The chain itself is designed to be immutable. Entries can't be changed and can't simply be deleted again, there is always a new entry - like an event log that states what happened when - publicly available.
A blockchain stores information about transactions, cryptocurrencies, and smart contracts. A blockchain is a bit like an onion - it has many layers! If you're feeling overwhelmed by blockchain's complexity, don't worry because intentionally complex systems are often that way so that they cannot be tampered with.
Although Blockchain has several well-known applications, the most popular ones are Bitcoin & Ethereum. Bitcoin is used as a cash system for conducting transactions while Ethereum is a software which is used to create distributed applications based on Blockchain technology.
That's all folks, for now! 😁