So I’m sure you've heard of blockchain technology! Bitcoin, Ethereum, Solana, Decentraland! What a mouthful! But what is it really? And why are people so excited about it? 🤔
Blockchain is essentially a data storage system or database linked together by cryptography. In the case of Bitcoin, it is a distributed or decentralized digital ledger used to store data and transactions. Many identical copies of this ledger are stored and maintained across the network. Once information is added to the ledger it can’t be changed and is viewable by everyone using the network.
Blockchain can be used to record transactions, track ownership and even store and execute arbitrary code. Between it’s security features and decentralized nature, it generates trusts and removes the need for intermediaries.
You can think of it as a digital ledger between friends (except you can be complete strangers) keeping track of who owes who dinner and/or drinks. Except it accurate. And rarely ever argues.
<aside> 💡 It’s a persistent, transparent, public, append only, ledger!
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So a few things! It’s accurate, secure, “trustless” (requires no intermediary) and operates 24/7.
First, let’s talk about accuracy. Because blockchain is append only what happens on the blockchain stays on the blockchain!
Further, each transaction has to be approved by multiple nodes in the network reducing errors that occur in traditional databases. It also prevents double spending (no more overdraft fees) by tracking individual transactions.
Second is security. Between fancy cryptographic math 🤯 and it’s decentralized nature, any would be attacker would need to hack the entire network to in order to defraud it.