Key Takeaways
blockchain is a unique kind of database
blockchain stores data in groups called “blocks”
blocks are filled with data and “chained” together chronologically
blockchain is a permanent, public record that anyone can see
blockchain can be decentralized (no single entity having control of it)
cryptocurrencies are built using decentralized blockchains
What Is Blockchain?
To define blockchain, we need to know what a database is.
A database is a collection of information that is stored on a computer system. Databases are usually organized in tables similar to spreadsheets.
It’s Not The Same
Blockchain differs from traditional databases. It doesn’t store data in tables, like shown above. Instead, it stores data in groups called “blocks”. These blocks of data are chained together in chronological order. Hence, the name “blockchain”.
Blockchain Transparency
Every block created has a unique hash number that identifies it. When a block is created and filled with data, it is timestamped and permanently added to the blockchain as a publicly viewable record. See for yourself.
I’ve highlighted the hash number with a yellow border in the example image below.
Blockchain & Cryptocurrency
Transparency is one of the key features of blockchain. A blockchain can be private, but that’s not how this technology is mainly being used in the world, today.
Cryptocurrencies are a new way to exchange value. The initial goal of cryto was to replace the paper currencies, such as the US Dollar, currently being used in the world.
Crypto coins and tokens are built using blockchain technology. This means that, unlike the shroud of secrecy surrounding traditional banking records, blockchain makes all crypto transactions viewable by anyone. It’s a transparent system.
Conclusion
Hopefully, you now have a solid, basic understanding of what the blockchain is and how it relates to cryptocurrency. It’s the critical technology behind it all and it will be an important part of our internet future.
I hope this post was informative or useful in some way. Feel free to share with your friends. 🙂
Additional Resources
If you’d like to learn more about blockchain, check out the resources below.