Idol’s Medium Mondays: What is Blockchain? [IDOL_MM_001]
Now that we have a brief introduction to what Idol is, we are able to move onto the next pressing question:
What is blockchain?
Blockchain is a digitized, decentralized, and distributed public ledger of transactions. As transactions are completed, they are time-stamped and recorded to blocks (hence the name), which are added to the blockchain in chronological order. This allows users to keep track of transactions without the need of a central administrator. Rather than a central authority, each computer that is connected to the network (a node) receives an identical replicated copy of the blockchain, synchronized and downloaded via the Internet and continually updated.
Why is this necessary? Think about the current state of the Internet, and all of the different services that we use. Now, consider the following scenario of a centralized service:
Facebook has over 2 billion monthly active users. Where do all of the posts, photos, videos, and content posted to Facebook go? It goes to Facebook’s server. What happens if this server is hacked? What happens if the government decides to permanently block access to this server? Or, what happens if Facebook decides to sell this data?
In addition to the risk associated with how they decide to protect, manage, and use their customers’ data, centralized services can be easily targeted due to being a single point of failure. Combining all of these characteristics, it is clear that there are many issues that arise when using a centralized service. This is what blockchain aims to solve.
Blockchain networks are distributed, meaning that the previously mentioned risks of centralized services do not apply. For example, if one node on the blockchain is compromised, the rest of the network is able to function because the network is not dependent on any single node. Additionally, due to its design (more specifically, due to how linked lists and hash functions work), data on the blockchain cannot be changed unless all future blocks are continually updated; this makes data on the blockchain virtually immutable.
While these are not all of the benefits from blockchain, to put it simply:
Blockchain technology is a way of digitally keeping track of economic transactions that do not require the use of a third-party intermediary due to its specific design.
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