I’ve gathered you all here today to breakdown every persons first Google search once we heard the word blockchain:
Thankfully, I found the perfect answer (bear with me): The blockchain is an open and immutable ledger that stores data electronically in a digital format with identical copies on every computer connected to it. This makes each user a root user.
Makes sense? I didn’t think so either, but that’s the first thing that showed up.
Let’s try again: The blockchain is a digital ledger that sits on top of the internet, tracking every transaction that occurs. Every computer that is connected to the blockchain has a copy of it that updates every time a transaction occurs.
Let’s break that down: Similar to how accounting ledgers track the transactions of a business, every time a transaction occurs it is recorded on the blockchain. Certain computers ensure that the transaction (referred to as a block) is added to the blockchain and linked to the transaction before it (hence the word chain.) A block is added using cryptography, and chained to the block before it. This results in a database sorted in chronological order accessible to all users. The blockchain is the main piece of technology in the new iteration of the internet, Web 3.0.
Now that you know what a blockchain is, let’s dive into the history. The blockchain was invented during the pitch for bitcoin. In 2008, the Bitcoin Blockchain was born, but it is important to note that there are multiple blockchains that exist with unique properties. We know the Bitcoin and Ethereum blockchains to be the most popular ones.
The data on the blockchain exists on all computers. Each computer has access to the database, and it’s entire history. Due to this fact, nobody controls data, and more importantly, companies no longer own your data. Companies today use your data to create algorithms tailored to you, but can also use their private network to censor information or even manipulate you.
Since the blockchain exists on every computer, there is no central node. You no longer have to use one platform to execute a transaction. Communication can occur from one machine (node) to another. This includes monetary transactions, the exchange of assets, and more.
Everybody has a blockchain address which is a string of 30+ alphanumeric characters unique to each user. Being that you now own your data, you can choose to release your identity or remain anonymous. This virtual identity allows for an added layer of security, and has great potential for the future… but we will dive into that shortly.