Blockchain for beginners
A blockchain is a mounting list of archives, called blocks, which are linked
(Source: BlockGeeks)
Each block contains a cryptographic hash of the previous block, a
timestamp, and transaction data.
By its design, data on a blockchain cannot be changed. This is a feature
and it is called ‘Immutability’
Compare this feature to the conventional system of keeping / maintaining
a Database. In a conventional system, an administrator has the rights to
change or delete the data.
Blockchain is also called an open, distributed ledger due to its other
features of transparency and decentralisation.
The absence of a single centralised server leads to an open, distributed
interface. Every user can see information on the chain anytime.
Users have a direct source of information untampered tampered by
intermediaries
Each of the blocks of data (i.e. block) are secured and bound to each other
using cryptographic principles (i.e. chain). (Source: Blockgeeks)
The combination of Immutability, Transparency and Decentralisation
makes it a unique technology. Businesses can make use of these properties
to improve their workflow efficiency and be transparent to their clients
If user A wants to pass information to User B, the blockchain can do the job
through independent nodes in an automated and safe manner. The
difference, as explained before, is the absence of any intermediaries.
Let’s say, one user commences a transaction. This creates a block. This
block is verified by many users distributed around the network by
checking a mathematical calculation. There is energy, time and effort
expended to verify the transaction. But there is also a reward for verifying.
The verified block is added to a chain stored across the network, creating
a unique token (link) with a unique history (Source: BlockGeeks).
Let us take an example: In our everyday lives, cab services are provided
by third party apps. These apps mark up their commission for providing
ease of ‘a click of the button’ service.
As part of their service, another third party takes a cut of the amount paid
by the passenger for processing the transaction.
Let’s consider an alternative solution based on blockchain. In such a
solution, the Driver and the Passenger can save on the processing fees.
Amount paid by the passenger flows to the driver’s wallet. There is no
intermediary. The blockchain records this ride as a unique token after
other users verify the block.
In conclusion, Blockchain technology promises a more simpler peer-to-
peer economy which is fair to all users.
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