What is blockchain? You may have first read about blockchain in news articles about cryptocurrencies like bitcoin. Indeed, blockchain’s first well-known application is cryptocurrency bitcoin. However, blockchain goes beyond bitcoin and cryptocurrency.
First things first: Is blockchain a coding language?
A common question people often have about blockchain is whether blockchain is a coding language.
Blockchain: A definition & breakdown
Here is the definition of blockchain: A blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the consensus of the network.
But what does this really mean? Let’s break this definition down.
First, a digital ledger is a digitalized collection of transaction records. When something is “decentralized and distributed,” there’s no central service center or supercomputer hosting and storing these records. Rather, the records, or digital ledger, are separated, or distributed, into millions of identical copies and on different machines.
Second, “public” means that the digital ledger is open to the public, as opposed to being held by a particular entity. This also means that all the machines or computers in the blockchain network have access to add transactions and update all the copies on other machines.
Any updates or changes made in the blockchain network need to be verified to ensure the integrity and security of the digital ledger.
An example: your bank account
Picture your own bank account. You make monthly income, which is a monthly addition to your account. You also have deductions, such as bills or dining out.
A bank has millions of accounts like yours from other individuals and companies. Traditionally, the bank holds on to all these records on their local servers and is the only party who can edit or update this information. If a hacker were to break into the bank’s system, they would have access to all of the records at once.
Alternatively, in a blockchain network, we can make millions of copies of the same record and distribute it to the public, rather than in a central location like the bank. Now, in order to hack into the records, a hacker would need to be able to change all the copies of the financial records for the changes to pass the verification on the blockchain network.
Now you have some basic knowledge about what blockchain is and how it operates. If you liked this guide to blockchain, let us know in the comments!