A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.
When you take pictures, where do these pictures go? They get stored in a database. A database organizes all this information in a certain way. Blockchain is a database and inside that database, you can find a transaction ledger. What makes a blockchain undestroyable is that anyone can have a copy of it. It’s difficult to destroy or wipe something when there are hundreds or thousands of computers scattered across the globe with a copy of this ledger. This is also what makes blockchain transparent, it is openly verified and the transactions can be viewed and maintained by anyone. Everything is trackable and that makes it impossible for people to hide their money. Blockchain is a decentralized database, which means that the information is not stored on one single device but on thousands and thousands of computers, spread all over the world. Centralized Databases store data on a single device in one location. Since all this data is only stored in one location, it may take a long time for people to search and access the information. There will also be a problem if multiple people try to access it all at once causing the database to crash. If there are no database recovery measures in place and a system failure occurs, then all the data in the database will be destroyed. This all reduces the efficiency of a centralized database and why decentralized databases are the safer option.
Blockchain is not owned by anyone. People can own a computer with a blockchain database, all you need is to download the database from the internet. Each computer with a copy of the blockchain database is called a node.
Are you guys familiar with Bitcoin? Bitcoin is a decentralized digital currency. It was the very first blockchain database.
A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or spend the same coin twice. Bitcoin and other cryptocurrencies use blockchain technology to record transactions.
There are several securities in place inside the blockchain to make sure that nothing goes wrong. Protection includes Cryptographic Signatures which means that the transactions are signed by a private key. No one can have access without the key except the account holder. Building Blocks (mining) is how information is organized.
Every few minutes information gets organized into blocks. This is where the validators (miners), take all the new transactions that come in and build the block from them. Once the blocks get built and recorded, they are set in stone and cannot be changed. Chain of Blocks (Blockchain) are all the blocks built by the miners connected like a chain, hence the name. Each block has a hash which is a unique line of letters and numbers. The hash of the previous blocks also gets included in each subsequent block, therefore if you make any changes to the block, you need to make those changes to each subsequent block as well, as all the other blocks will become invalid because the hashes will be different with every change.
Transaction fees are used to protect the whole system. If blockchain does not have any transaction fees it becomes easy for hackers to spam the network by transferring money from one account to another continuously. This is the reason why there must be fees on every transaction as it prevents hackers from creating hundreds and millions of transactions and records for free. All these methods of protection and security show how secure and self-supporting blockchain is inside and out. A Blockchain database can support itself without relying on an intermediary, resulting in its decentralized nature.
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