What is the Blockchain?
You can also get a basic idea of what blockchain means by looking at the word itself. Block + Chain. We will elaborate, but first, think of blockchain as a “chain” of “blocks.” Simple enough, but that doesn’t really get to the bottom of it. The “blocks” in blockchain are units of cryptographic data, which is fancy speak for saying that they are incredibly secure. These records of transactional data are nearly impossible to alter, fabricate, or destroy.
These data blocks are verified through complex cryptographic equations performed by a vast network of decentralized nodes (or CPUs) at set intervals of time. Once verified, the data is added to the long chain of previously verified blocks and cannot be changed unless a consensus of all the decentralized nodes agrees to the changes. Hence the indomitable Blockchain.
What About Decentralization?
We get that it is secure, but what makes it so different from anything else we have seen before? The secret lies in decentralization. Let’s look at Bitcoin, the world’s first decentralized currency. It uses blockchain technology and verifies its blocks through a process called “proof of work.” The nodes that verify the blocks are scattered all over the world. There isn’t one company, one government, or other entity that can control the production, verification, and transaction of Bitcoin. It is genuinely peer-to-peer and “transparent.” Anyone with an internet connection can store, produce and transact bitcoin, or see a full history of the transactions made on the blockchain.
Though bitcoin was the first mover in the cryptospace, there are other faster, more environmentally friendly blockchain technologies that were designed solely around the idea of decentralized finance, or DeFi, as it is affectionately known by its proponents (Bantublockchain )
We will stop here today and continue tomorrow