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Hackernoon logoWTF is the Blockchain — 2min Version by@AleksandarSvetski

WTF is the Blockchain — 2min Version

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@AleksandarSvetskiAleksandar Svetski

Not sure if this is possible, but lets try shall we…

A “Blockchain” in simple terms is:

  • A new kind of database structure
  • Which is broken up into “blocks”
  • Where each “block” contains a ledger with a list of transactions ^
  • And new blocks are cryptographically linked to their preceding block *
  • So any change in any previous block in the blockchain causes the rest of the chain to be null & void / will require an entirely new chain. ^*

That quick 5-part definition is a more general overview and does not represent what we would call a public decentralised blockchain (like Ethereum or Bitcoin).

Public, decentralised blockchains have no trusted third party to manage the transactions or data being input into the blocks, so they therefore need a consensus mechanism that allows them to operate in the real world.

Describing these mechanisms is outside of the scope of this article, but suffice it to say it’s a new form of science or cross disciplinary mish-mash of game theory, mechanism design, cryptography, computer science & social engineering.

We call it “crypto-economics” and I’ve written an overview about it here:

Last but not least, with 30 sec on the clock:

^ Blocks containing ledgers are the most common because it’s currently the best way to record of all of the “transactions” that occur. Transactions meaning any function that is executed; be it money changing hands, or parts of a smart contract being completed.

* Cryptography is the study of hidden / encrypted communication. Modern cryptography uses hashing, which basically allows you to take any bit of data, run it through a “hashing algorithm” and on the other side you get a unique string of numbers & letters. This process is secure because right now, it can only practically go one way, ie; Data + Algorithm → String.

Blockchains employ cryptography to link blocks in a chain by using the hash of the previous block, the data in the current block & in the case of decentralised blockchains; a nonce, to create the “hash” of the current block.

In this way, each new block carries with it the hash of the previous block, which carries with it the hash of the block before it, and so on & so forth all the way back to the “genesis” block.

^* This is why the blockchain is immutable, or at least tamper proof. You change one thing in the past, it messes up everything else.

Phew!

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Hope you enjoyed this post. Please show it some love, give it a clap (or a few) and pass it around to anyone you think should have a read.

Some of my stuff is a little rough around the edges, but it’s done that way to hopefully jolt people into think clearer / deeper into what they’re doing.

Hope you got some value & feedback is always welcome!

Aleks

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