Blockchain is a database structure in which a constantly growing list of records (blocks) is organized in a linear sequence where each subsequent block of information is tied to the previous block of information. These blocks are stored with each network participant (there is no single server) and everyone of them keeps the entirety of the chain of blocks. Each new record is added on top of all existing copies on the network.
Pretty simple, right? Let’s explain using an even simpler example:
- Eva bought 6 oranges.
This purchase is recorded on the blockchain (a digital ledger) and put into block number 1. Send block #1 to Alan, Vicky, Alice, Jane and Steve (network users) — now they all know that Eva has 6 oranges.
- Eva gives Alan 5 oranges to share with his friends.
This transaction is recorded and put into block #2. Block #2 also includes the unique identifier of block #1. Send this block to Vicky, Alice, Jane and Steve.
- Alan gives Vicky 1 orange.
This is recorded in block #3. Add the unique ID of block #2. Send the block to all users.
- Alan gives Alice 3 oranges to share with her friends.
Record in block #4. Add the block #3 ID. Send the block to all users.
- Alice decides to instead chow down the oranges. When Jane and Steve come to her for the oranges she’s promised (after all, they can clearly see that Alan has given Alice three oranges), Alice puts the blame on Alan and says that he only gave her one orange, and kept the rest for himself. However, the blockchain entry tells a different story, so Jane and Steve know the truth!
Thus, blockchain serves as a protection against fraud within the network, making transactions simple and transparent!
More information: https://www.freelanex.io/
