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What is Blockchain - explained in simple terms
Your 2-Minute dose of Genius!
Sika Republic
January 11, 2024
Welcome to Blockchainomics. Your 2-Minute dose of genius focused on blockchain technology, cryptocurrencies and digital assets. We look forward to helping you feel a little bit smarter every week as we delve into decentralized finance and the future of money!
Blockchain is a technology that blends the accessibility of the internet with the security of cryptography by creating a new way of recording and validating data electronically.
Historically, data has been stored either by keeping a written record on paper, or by recording transactions into a spreadsheet. Blockchain technology changes all of this by introducing what’s known as a distributed ledger. Information is recorded digitally, converted into secure cryptographic code and transferred through a global network of independent computers that validate and keep a safe and unchangeable record of those transactions in real-time.
Blockchain is literally a limitless digital chain which adds numerous new blocks of information to the chain over time.
So how does it work?
Single transactions are grouped together into a block. They’re recorded and secured using 64-character cryptographic code (a combination of letters and numbers) and validated by a global network of independent computers.
Once a block is created the information can’t be changed unless the global network of validators all verifies it. This means, no single person can access the information in the block and successfully change it. After the first block is validated, another block is created and added to the chain. The process works as before, with new blocks being created and linked to the previous block by a unique cryptographic hash.
What makes blockchain so unique?
It’s secure. Unlike other methods of storing and validating data, transactions or data stored on a blockchain can’t be tampered with. The data is encrypted and needs the consensus of the global network of independent validators to be approved or changed.
It’s transparent. Public blockchains are decentralized, which means they aren’t controlled by a single company or government. The technology is open source, distributed across the globe through the internet and anyone can view any transactions recorded on the blockchain at any time.
It’s fast. Rather than relying on how quickly one person can work, blockchain technology can be processed in minutes, seconds, or possibly even quicker, without geographical restrictions.
This technology allows cryptocurrency transactions to be processed around the globe safely and transparently. It allows ownership data to be stored without the risk of the data being tampered with. It also allows orders to be tracked through each stage of their journey, until they arrive where they are expected.
While Blockchain became most well-known with the popularity of cryptocurrency, there are many industries and companies which understand the potential of blockchain and are using this technology to modernize and expand their businesses across the globe.
Today’s Takeaway:
While the term Blockchain is still new to many people, it’s been around for years. Imagine if you purchase an item and it’s recorded on the blockchain; you no longer have to keep a receipt to prove you own it, the transaction is visible on the blockchain to anyone who wants to go online and view it. Your personal details aren’t visible, but a record of the transaction is. As the world becomes more familiar with the technology and it’s proven its reliability, more use cases are being created based on this technology. It's even being used by the brands that you know and love, in some of the services that you use every day!