What is a blockchain?

OK, you decided that it's worth to put your money in crypto (I agree with you), and now you want to know more about it. And the first question is, what is a blockchain?

Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain.

Information held on a blockchain exists as a shared, and continually reconciled, database. This is a way of using the network that has obvious benefits. The blockchain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralized version of this information exists for a hacker to corrupt. Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet. By storing blocks of information that are identical across its network, the blockchain cannot be controlled by any single entity and has no single point of failure.

To be a bit more technical, it is a continuously growing list of records (collection of fields, possibly of different data types, typically in fixed number and sequence) called blocks, which are linked and secured using cryptography (hence Cryptocurrency). Each block typically contains a hash (mathematical algorithm that maps data of arbitrary size to a bit string of a fixed size which is designed to be a one-way function, a function which is infeasible to invert) pointer as a link to a previous block, a timestamp (the process of securely keeping track of the creation and modification time of a document. Security here means that no one - not even the owner of the document - should be able to change it once it has been recorded) and transaction data. By design, blockchains are inherently resistant to modification of the data. A blockchain can serve as "an open, distributed ledger (consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions. There is no central administrator or centralised data storage.) that can record transactions between two parties efficiently and in a verifiable and permanent way. 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 needs a collusion of the network majority.

Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault tolerance (characteristic of a system that tolerates the class of failures for which there is an unsolvability proof). Decentralized (process of distributing or dispersing power away from a central location or authority) consensus has therefore been achieved with a blockchain. This makes blockchains potentially suitable for the recording of events, medical records, and other records management activities, such as identity management, transaction processing, documenting provenance, or food traceability.

The invention of the blockchain for bitcoin made it the first digital currency to solve the double spending problem (scheme in which the same single digital token is spent more than once) without the use of a trusted authority or central server. The bitcoin design has been the inspiration for other applications.
By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Although it was originally devised for the digital currency (Bitcoin) the tech community is now finding other potential uses for the technology.

That’s it for today, STAY SAFE AND HODL!