Blockchain — a simple explanation

I have stepped in to the blockchain domain recently and started researching to learn the basics of blockchain technology and Crypto-Currencies. When someone is new to the domain and comes from a traditional technical or business background or something totally different , the material available on the web is not so beginner-friendly. I will share what I learn as I move forward. Please bare in mind I am new to this and feel free to correct me at any point of these posts.

-Thilina Chandrathilaka

Blockchain which is referred to as a “digital ledger”, in simple terms can be explained as a spreadsheet that is distributed thousands of times among a network of computers. After each new transaction, this “Spreadsheet” will be updated in all the computers throughout the network.

Think of the blockchain as a spreadsheet

[Diagram 01 — Think of blockchain as a spreadsheet]

This Spreadsheet or Digital Ledger is shared among a network of computers. Each computer will have an identical copy of the ledger.

[Diagram 02 — A digital ledger shared among computers in the network]

A new transaction happens !

Let’s assume there is a new transaction between two parties. This transaction details will be added to the Ledger and the Updated ledger will be sent to all the computers in the network.

[Diagram 03 — New transaction and Updating the ledger]

Now its the updated digital ledger throughout the network !

After the update, all the Ledgers in the network will be identical and it will be the new updated ledger with the new transaction records.

[Diagram — Updated Ledger and its identical copies]

The “Spreadsheet Blockchain”

Now think of this spreadsheet blockchain as the main source for any transaction or any application.

• Confirm a transaction
• publish a transaction
• check balance or amount of a transaction

there is a single source of data (the Spreadsheet Blockchain) that is available for any party on this network of computers.

NO Central Authority is having ownership of this “Spreadsheet” and NO Central Database or Data-source !

There is NO Database, there is NO Central System or Authority that can control the data. It is publicly available within the network. When a transaction happens, that will update the Blockchain and the network nodes or the all the computers in our diagrams. Every node will have the same updated data.

Last Word . . .

In layman terms, this is how the blockchain works. The real thing comes with a proper set of standard protocols to make sure this is a secure and incorruptible technology.

Feel free to leave any comments.

Next : How the actual blockchain works

This is a topic for another post. To give a quick and short description of the actual technology behind it,

Blockchain technology is the basis of Digital Currencies (Bitcoin, Litecoin, Ethereum, etc) and it allows digital information to be distributed among a network of nodes. This is designed in a way that it is an incorruptible digital ledger.

There are security measures and standards to make sure nothing can penetrate the data and add their own data. The architecture of the blockchain will simply explain this standards and measures.

[reference: https://blockgeeks.com/guides/what-is-blockchain-technology/]

[reference: https://www.coindesk.com/information/what-is-blockchain-technology/]

[reference: https://www.forbes.com/sites/forbesagencycouncil/2018/04/05/what-is-blockchain-and-what-can-businesses-benefit-from-it/#284f2cf4675f]