Evolution in progress...

What is blockchain.

Blockchain is a complex technology that puts together many fields such as: economy, computer science, cryptography, game theory...  so any description made here will be a very condensate and simplification of the reality but will let you understand the key concepts. 

"The  blockchain is an immutable, append only, cryptographically secured digital ledger which is distributed among all computers (nodes) connected to the network."

To understand it we can picture the blockchain as a classic accounting book (or ledger) with its pages and entries. 

Each page is numbered at it's bottom, so they follow a strict order,  if one is missing we can find it out easy, the date is written so we know when the page was filled in.

 

Each page contain a serie of unique transactions , also following a strict order as we write them one after the other, On these pages you will also find a  starting and ending balance. 

Each transaction mention: a description, amount transferred, time of transaction, payee... There is a continuity between each transaction so if one is missing an inconsistency will appear and the final balance won't make sense.

When a page is full we start a new one. 

That accounting book will form a clear historic  of the transactions that happened and show where the final total is coming from. 

Now if we compare the blockchain to that accounting book, each page would be a block. 

As in the book, each block's header contain a number, a timestamp, and a serie of transactions. All the blocks are "digitally" attached to each others in a strict order as per their number.  When one block is full of transaction a new one is attached. If one block was to be removed it would be obvious that the blockchain has been tempered with. 

 If we keep going on with the accounting book analogy.

Let's imagine a big company with one accounting book, how can they make sure the final result on the book is correct, that the accountant didn't falsify some transaction for his own gain?

A solution is to have a trusted 3rd party that would audit the book and company.

They can also have more than one accountant, each of them maintaining their  the same own copy of the ledger and verifying the consistency between each other regularly, after each page for example. 

That way if one was to cheat in some way it would be obviously to the others. Though to be effective, the company would need many accountant, ideally not knowing each other to avoid to avoid any secret agreement.

​In the same way blockchain technology is solving the trust issue by being distributed on as many independent computers as possible each of them maintaining a copy of the blockchain and making sure  each a new  block is added that the transactions  .

If one computer was managing to modify a transaction for its own profit it would be seen and rejected by the others.

So we understand that by being distributed the blockchain solve the trust issue.

Evolution in progress...

© 2019 by Shinka