Blockchain Basics

A beginner’s guide to The Blockchain

The Blockchain is a type of Distributed Ledger Technology (DLT).

Like DLT information on a blockchain is distributed, but a key differentiator is that data on a blockchain is decentralized.

Distributed: Data is stored in multiple locations.

Centralized: A single authority controls the data.

Decentralized: Data is distributed and control is shared by multiple authorities.

Node

Each location, or computer, in a blockchain’s Decentralized network s called a Node.

Each Node in the network contains a complete copy of all transactions and information from the blockchain.

The Blockchain is a database of transactions distributed across a decentralized peer-to-peer network.

READ: IBM — Blockchain for Dummies

How The Blockchain Works

Blockchain owes its name to the way it stores transaction data — in blocks that are linked together to form a chain. As the number of transactions grows, so does the blockchain.

Each block contains a hash (a digital fingerprint or unique identifier), timestamped batches of recent valid transactions, and the hash of the previous block. The previous block hash links the blocks together and prevents any block from being altered or a block being inserted between two existing blocks.

Bitcoin creator, Satoshi Nakamoto was concerned about the web’s reliance on trusted third parties such as banks and credit card companies to process electronic payments.

A Must-Read (or Listen!): Satoshi Nakamoto’s Bitcoin Whitepaper

Consensus

Trustless

Proof of Stake

Immutable

Additional Reading:

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