A lot of people have heard of the blockchain, the underlying technology behind Bitcoin. But what excactly is the blockchain?

How it works

The blockchain itself isn't inhearently the same as Bitcoin, it is a technological concept that can be applied to many different problems. As the name suggests it is a chain of blocks that contain information about transactions. This chain of blocks are stored on a ledger on many different servers which is the reason people call bitcoin decentralized. If you want to change a block the other copies of the ledger will disagree with the changed ledger. This is the reason why the blockchain works and why it is not easy to manipulate the public ledger.

The Advantages

But why sould you use a blockchain when as the past has shown it is very hard to implement and when mining requires an enourmous amount of electricity? One advantage of using a blockchain for payments is that you can cut out the middleman and safe coasts because you don't need someone moderating the transaction. This is why Bitcoin is often referred to as a trustless system because you don't have to trust one single point of power. But the most important advantage the blockchain provides is that it can not be controlled by one entity like the government or one bank. This means that it is censorship resistent. In our current system the monetary system is controlled by the government which allows for control and censorship.

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