Blockchain 101 – All You Need to Know
What is Blockchain?
At its most basic level, blockchain is a digital ledger of transactions. It’s like a digital version of a checkbook where each transaction is recorded chronologically and publicly.
But blockchain is far more secure than any other ledger because it uses cryptography to ensure that each transaction can only be added to the chain by the person who owns the corresponding private key. That means that no one can tamper with the blockchain or delete past transactions.
How Does Blockchain Work?
Every transaction on a blockchain is stored in a block. Each block is then chained to the previous block, creating a permanent record of all transactions. This record is distributed across a network of computers, called nodes, each of which has a copy of the blockchain.
Whenever a new transaction is made, all the nodes on the network are updated with the new block.
This decentralization is what makes blockchain so secure. Since there is no central authority controlling the chain, it is incredibly difficult for anyone to tamper with it.
In order for a hacker to change a single transaction, they would need to change the block that contains it and then convince more than half of the network’s nodes to accept the new version of the chain. This is known as a 51% attack and is considered incredibly difficult, if not impossible, to pull off.
What are Bitcoin and Ethereum?
Bitcoin and Ethereum are two of the most popular blockchain platforms. Bitcoin is a cryptocurrency or digital currency, that can be used to buy goods and services. Ethereum is a platform that allows developers to build decentralized applications (dapps).
What are Decentralized Applications?
Decentralized applications are programs that run on a blockchain. They are usually open-source, which means anyone can contribute to their development.
Because dapps are built on a decentralized platform, they are incredibly difficult to shut down or censor.
What are Smart Contracts?
Smart contracts are self-executing contracts that run on a blockchain. They can be used to automate a variety of tasks, from financial transactions to voting.
