What is the blockchain? And why is it important?

perminus-gaita (39)in #blockchain • 6 years ago (edited)

What is the blockchain?

Blockchain is literally a chain of blocks. Where blocks are a continuously growing list of records, which are linked and secured using cryptography.

So why is it important?

1. Blockchains are inherently resistant to modification of the data.

You do not have to trust anyone or any entity for the authenticity of the data. With the blockchain you know that the data is authentic.

2. It is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.

This makes it transparent. Meaning data is open for everyone to see. This could revolutionise how future organisations could be run. They would be extremely transparent. It also means that no single person can take down a decentralised application built on the blockchain. This decentralises power.

3. For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks.

Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority. Management by a peer-to-peer network shows that the blockchain is a transparent democratic way of managing systems which can inturn make them more efficient and productive.

4. Since the blockchain gets stronger as the number of peers increases Satoshi Nakamoto (Founder of the first successful {bitcoin} blockchain) devised a system that incentivizes people to become peers.

With this incentive model, we have seen the blockchain technology growing rapidly. Everyone wants/needs to make money. That can be done by taking part in the blockchain in one way or another e.g as a miner(basically a peer) That is also partly the reason why I am sharing this content. I am incentivised. The fact that anyone can take part in the blockchain is crucial for its growth and also crucial for the global economy as it makes the playing field much more level. Wealth can be distributed much more on merit rather than on bureaucracy.