What is Blockchain?

Basic information

Blockchain is a decentralized database that protects a large number of records. Such a database is not owned or controlled by anyone, nor is it located in a single place or data center. The database can be so large because it is distributed throughout a network of all the computers that are connected to it.

How does it work?

Blockchain is not a single database. Since it is stored at each connected user, no one can change this database without the other users knowing.

Blockchain is a combination of the words block and chain. These blocks are created by miners using special software. Blocks are interconnected and the transactions between them are controlled by users.

Every movement, payment, and other action in the blockchain is verified by thousands of computers around the world, therefore it is very secure, practically eliminating the possibility of a fraud.

Blockchain is a sophisticated technology, comparable to the invention of the Internet back in the day. This is because it is not only associated with cryptocurrencies but is also beginning to be used for the decentralization of the state sphere and for information distribution.

Benefits of Blockchain

  • The ability of a large number of nodes to reach a single consensus on the most current state of a large amount of data, such as ledger entries. This applies even if individual nodes are anonymous, connected to each other via unreliable connections, or run by fraudsters who try to modify transactions in their favor.
  • The ability of any node to decide with an acceptable degree of certainty whether a given transaction is part of the blockchain, or not.
  • The ability of any node that created or receives a transaction to decide, after some time and with a reasonable degree of certainty, whether the transaction is valid and can be permanently incorporated into the blockchain or whether two transactions have not collided.
  • A sufficiently large barrier that prevents attackers from modifying or overwriting transactions.
  • An automatic form of transaction conflict resolution that ensures invalid transactions (such as attempting to spend an amount on an account multiple times) never become part of the confirmed dataset.

What is a decentralized database?

This type of database is, in a sense of the word, “autonomous”. There are no weak points of possible attack, no one controls it, and it doesn’t need huge data centers to run.

All data is heavily encrypted using a hashing algorithm. Each of us can become part of this system by offering a part of the processing power of our computers.

Sources: wiki, oKrypte, pixabay.com

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