What is Blockchain?

Generally, blockchain is a database. It is a digital list of records contained in many blocks of data. Blocks are connected in chains in chronological order and can’t be changed or replaced. Each block has a unique cryptographic code, called a hash. Hashes serve as keys to data inside blocks.

For the first time, cryptographic signatures in a chain of blocks were introduced by Stuart Haber and W. Scott Stornetta back in the 1990s. Scientists applied this technique to secure digital documents from data spoofing. Their work inspired computer scientists and cryptography enthusiasts around the world, which concluded in the creation of the first decentralized electronic cash system called Bitcoin.

Blockchain technology

Blockchain technology is the core of Bitcoin and most cryptocurrencies. In 2008 Satoshi Nakamoto published The Bitcoin whitepaper. The author’s name seems to be a pseudonym and can represent a collective of scientists, as nobody has seen Mr. Nakamoto to this day.
Crypto transactions occur within a globally distributed peer-to-peer network of computers. Each computer has a copy of the blockchain on its hard disk drive. The blockchain contains all previous transactions within the system, as well as its current state. So the distributed network has ultimate intruder and fraud protection, as there is no single point to attack - millions of computers have copies of the original data.

The Proof of Work

The Proof of Work consensus algorithm confirms to other participants that a certain amount of computational power has been expended to maintain the system and prevent overtaking the network. There are other proof mechanisms for example proof of stake and proof of burn. Each method has its own flaws and benefits, which we will discuss closely in future articles.

Today blockchain technology’s main adoption is decentralized finance. But it has evolving implementations in different areas, such as real estate, insurance, healthcare, gaming, and many more. So we can expect to see even more blockchain in our future.