The Blockchain, Explained

For fun I’ve been collecting explanations of the blockchain I’ve found in some of the posts I’ve been reading. It’s not easy to ‘splain this well.

If you like any of the attempts below, highlight the source in large grey letters at the top. The definition with the most highlights wins.

You can also submit your own definition by emailing me at evan.hansen@medium.com. This can either be your own original attempt, or a copy & paste from another source — if the latter please include the link.

I’ll add them to the list, and recirculate this from time to time. The goal will be to come up with a short, accurate, non-trivial definition with real explanatory power. I’ll plug this in to future writings on blockchain whenever appropriate.

Let’s play!

LetsTalkPayments.com

The Blockchain network consists of nodes, i.e. distributed servers. All the nodes can accept and process the transaction. The nodes on the network share information about the candidate transaction. …Consensus is an iterative process, in which nodes communicate and update until majority of the peers agree on the transaction processed and therefore it is powerful. The transaction which does not pass one round of consensus will be sent for the second round consensus for approval. The nodes of the network recognize a ledger instance as validated when a supermajority of the peers have signed and broadcast an identical validation. If the network fails to achieve supermajority agreement on validations, this implies that transaction volume was too high or network latency too great for the consensus process to produce consistent proposals.

BusinessInsider.com

The blockchain creates bitcoins, allows transactions to happen, and creates a public record of all transactions, shared across hundreds of computers. Transactions can’t be reversed and are much faster than the current system.

Financial Times

The blockchain works by sequentially ordering blocks of transactions into a chain. Transactions between bitcoin users are gathered as blocks and broadcast to a network of computers. Those gathering the blocks are known as “miners”, and compete to verify them by unscrambling standard cryptographic puzzles derived from their contents. The “winner” publishes the result to other computers and receives a monetary incentive. A new block is added to the blockchain roughly every 10 minutes, containing the transactions of the last 10 minutes. Other computers then verify the work.

Bloomberg BNA

The term “blockchain” refers to a decentralized digital ledger that combines powerful cryptography algorithms with a system of decentralized computing power that redundantly verifies transactions, which are ultimately recorded on a public digital ledger available to the world.

Financial Times (part deux)

Transactions between bitcoin users are broadcast to a network of computers. The latter, known as “miners”, gather together blocks of transactions and compete to verify them and receive monetary incentives in return for being “first”. The blocks are secured by cryptography and other computers can verify the work. The “cost” of running the network is borne by the anonymous owners of servers. The open source code means it can be widely distributed, making it highly decentralised and difficult to change.

Blockchain CEO Peter Smith, on Wired UK

“Really at its core, Bitcoin is just an open access database that anyone can write to.”

MIT Technology Review

[The blockchain is] the publicly accessible and cryptographically verified record of every single Bitcoin transaction that has ever occurred. Transactions are verified and recorded in the blockchain by a network of “miners” all over the world who exchange their computing power for a chance to solve complex cryptographic puzzles and earn money — freshly minted bitcoins.

Investopedia

A blockchain is a public ledger of all Bitcoin transactions that have ever been executed. It is constantly growing as ‘completed’ blocks are added to it with a new set of recordings. The blocks are added to the blockchain in a linear, chronological order. Each node (computer connected to the Bitcoin network using a client that performs the task of validating and relaying transactions) gets a copy of the blockchain, which gets downloaded automatically upon joining the Bitcoin network. The blockchain has complete information about the addresses and their balances right from the genesis block to the most recently completed block.

BBVA Research

Blockchain is a peer-to-peer public ledger maintained by a distributed network of computers that requires no central authority or third party intermediaries. It consists of three key components: a transaction, a transaction record and a system that verifies and stores the transaction. The blocks are generated through open-source software and record the information about when and in what sequence the transaction took place. This “block” chronologically stores information of all the transactions that have taken place in the chain, thus the name blockchain. In other words, blockchain is a database of immutable time-stamped information of every transaction that is replicated on servers across the globe. This technology is the foundation of bitcoin, a crypto currency.

The Guardian

A blockchain is a public record of all transactions that have ever taken place in a currency, the most well known example is its use in Bitcoin.

American Banker

The revolutionary part of the blockchain process is how miners manage to keep these blocks accurate and tamper-proof. The easiest way for a layperson to understand this security is not in mathematical terms, but in economic terms. When miners attach a block to the Bitcoin network, they don’t just place that block neatly to the adjacent block. They glue the block to the prior block by “burning” energy. Yep, you heard that right. Miners are able to defend the Bitcoin network by burning electricity and creating a cryptographic “glue” out of the process. The total amount of electrical energy burned by all the blockchain’s miners in a ten-minute period is the “glue” that affixes the newest block to the prior block. The economic cost of burning energy is “proof” that miners have attested to the contents of the block.