What Is A Blockchain?

What Is A Blockchain?

Technically, a reliable summation of the blockchain is the following: 

A list of approved blocks, each linking to its predecessor all the way to the genesis block.

Nowdays, we call 'blockchain' every decentralized database, or digital ledger, of transactions that everyone on a peer-to-peer network can see and interact with.

In simple words, a blockchain is a system which allows us to transfer value (i.e. money) without depending on individual third-parties (i.e. banks) to establish trust.

The blockchain solves the so-called double-spending problem while eradicating the need for middlemen who establish trust. To achieve this, a blockchain is maintained as a public distributed ledger (or register) of all transactions. It is is called "distributed" because it can be maintained transparently by anyone rather than an single, individual organization, government or person.

You can conceptualize the blockchain as the ever-growing ledger of transaction records grouped in blocks, which are linked and cryptographically secured by miners with the process called ‘mining.'  

History Of Blockchain

The first work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta. Later, in 1992, Bayer, Haber and Stornetta added Merkle trees so that a blockchain would be able to collect several documents into one block.

The concept of distributed blockchain was invented by the creator of Bitcoin, Satoshi Nakamoto (which is probably a pseudonym of a person or group of people). In Bitcoin, and other cryptocurrencies, a distributed blockchain serves a the public ledger of all transactions. 

“It might make sense just to get some Bitcoin in case it catches on. If enough people think the same way, that becomes a self-fulfilling prophecy.” — Satoshi Nakamoto (2009)

The distributed blockchain is a revolutionary concept that will disrupt a great many of the known industries. Because such blockchains can used for any type of digital value, not just Bitcoin or cryptocurencies in general.

How Blockchain Works?

It is true you don’t need to know how a blockchain really works. After all, you don't know how exactly the internet or your car works.  But, for such a revolutionary technology, you should have a basic understanding at least.

The following diagram summarizes how a blockchain works:

How the blockchain works



Images: Wikipedia, Blockgeeks