Today, I want to share with you the meaning of blockchain in simple. The word blockchain has a background history with Bitcoin. because the first creation of blockchain and practical use of it began with Bitcoin. In recent years it is become a fast improving technology with a good position in the market.
What is a blockchain?
If you know about Bitcoin, you could see the Bitcoin's foundation is based on blockchain. A blockhain is a distributed database which is decentralized and maintained not by only a single point or an entity but it can be operated by many nodes. This database is made by sequential records called "block". When a block is created, the previous block cannot be altered so they are immutable blocks and this is the unique characteristic of blockchain and also the key point to use blockchain. Each block can be created by every node in network (with potential mathematical calculation called hashing) but only one block could be choose at any given time and with the result of hashing and some election mechanism between nodes and then that and only that block could be added to the last block (append to the chain).
For example in Bitcoin blockchain every block consists of bitcoin transactions, so every time the last block is constructed and approved (chose) by other nodes (here are bitcoin miners), it means the confirmation of the transactions, so previous block could never be altered (if it does it means that the transaction couldn't be authentic and could cause double spending money and it is so bad).
By this mechanism of blockchain and the form of decentralized it made it a secure solution for many applications. By this technology turning to blockchian by companies and governments is increasing rapidly.
Benefits of blockchain:
Trust-less exchange without inter-mediation: People or companies (parties) could be feel free of exchange without any concerns about risks
Cross-referencing: Users can control and validate their data alongside the blockchain
Integrity of data
Data consistency
Decentralized
Process integrity
Immutability of data
Cost saving
and many other things
Image source:
Hamidreza Asgari
Jun 2, 2017