What is Blockchain for Beginners
Explaining the Term
What is Blockchain for Beginners | The blockchain is unquestionably one of the greatest innovations of all time. This magnum opus is the brainchild of a group of people called Satoshi Nakamoto. This technology was first outlined way back in 1991 by two researchers who wanted the genesis of a system in which the document timestamps could not be tempered. Since then, it has transformed into the next big thing. The question however that everyone is asking is “what exactly is blockchain”?
Blockchain for Beginners | Blockchain is a foolproof information recording system that is impossible to intrude, alter, hack, or cheat.
In simpler terms, blockchain is a digital ledger. This ledger is copied and distributed across all the computers that are a part of the blockchain network. Each block in the chain can perform transactions and whenever a new transaction takes place, an update of that transaction is passed over the ledger of every member. Various people referred to as the Distributed Ledger Technology (DLT) manage this decentralized database.
How does it prevent fraud?
This has to do with the dynamically updating ledger on every member of the chain. If a hacker wanted to corrupt data on the blockchain system, he would have to change every block in the chain making it virtually impossible. Blockchains like Bitcoin and Ethereum grow by the minute with more blocks added to the system continuously. This factor exponentially enhances the security of the ledger.
Why is there so much hype?
Blockchain for Beginners | Blockchain was not the first attempt at creating a digital currency. People have strived for it in the past but all such attempts have failed.
The main reason for this failure was trust. It is quite common to think that if someone were to invent a currency, he would give himself a hefty amount of money or even steal it from other users.
Bitcoin solved this problem with a dynamic database which they called a blockchain. The normal databases are based upon SQL and have someone in charge who looks after the entire system. The admin can alter the entries of the database. Blockchain is unique because it puts no one in charge. People who use blockchain are the ones who administer it. No one can copy, alter, or spend a bitcoin twice. This gives its users a level of trust.
Analogy as an Example
Google Docs is a very simple analogy to understand blockchain technology. Whenever we create a document and share it with a group of people, the technology distributes it rather than copying or transferring it. This essentially creates a decentralized distribution chain giving access to all the users simultaneously. No user has to wait for the other party to complete their modifications. Moreover, all the changes to the document happen in real-time, transparent to every user.
Blockchain is of course much more complex than this analogy but a Google Doc is a good way to start somewhere.
Conclusion: Blockchain for Beginners
In a nutshell, we tried to elaborate on the concepts of blockchain by discussing Bitcoin as an example. Bitcoin is the first commercially successful implementation of this technology. With prolonged censorship and harsh government regulations, it is not far when the entire world slowly transitions to embrace this marvel. The future of transactions is here!