What is a Blockchain?

Blockchain literally means a chain of blocks. What is in the block? Blocks contain data. Thus blockchains are kinds of databases in themselves containing data.

Blockchains can be defined with following four properties:

• It’s a decentralized, distributed ledger
• It is governed by a consensus protocol
• It is maintained by a group of peers, thus has no central authority
• It operates as a data structure for organizing information

As more and more data becomes available, the blocks are filled and then a new block is created. The new block of data will then be chained to prior data in a chronological order using cryptographic algorithm.

What kind of data is stored in the blocks? Although you could store any kind of data, a very common item that gets persisted there is ledger data for a transaction. Many blockchains are immutable. They don’t allow the data to be changed, thus making it secure. The data thus becomes permanently recorded.

Many public blockchains don’t have centralized control. No one person or entity can control the blockchain. In fact all the users of the blockchain retain the control of the blockchain collectively.

Here is what Wikipedia says about Blockchain [Extracted 9/30/2021]

A blockchain is a growing list of records, called blocks, that are linked together using cryptography. It’s also described as a “trustless and fully decentralized peer-to-peer immutable data storage” that is spread over a network of participants often referred to as nodes.

Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree). The timestamp proves that the transaction data existed when the block was published in order to get into its hash. As blocks each contain information about the block previous to it, they form a chain, with each additional block reinforcing the ones before it. Therefore, blockchains are resistant to modification of their data because once recorded, the data in any given block cannot be altered retroactively without altering all subsequent blocks. Blockchains are typically managed by a peer-to-peer network for use as a publicly distributed ledger, where nodes collectively adhere to a protocol to communicate and validate new blocks. Although blockchain records are not unalterable as forks are possible, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance.

The blockchain was invented by a person (or group of people) using the name Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin. The identity of Satoshi Nakamoto remains unknown to date. The invention of the blockchain for bitcoin made it the first digital currency to solve the double-spending problem without the need of a trusted authority or central server. The bitcoin design has inspired other applications and blockchains that are readable by the public and are widely used by cryptocurrencies. The blockchain is considered a type of payment rail. Private blockchains have been proposed for business use but Computerworld called the marketing of such privatized blockchains without a proper security model “snake oil”. However, others have argued that permissioned blockchains, if carefully designed, may be more decentralized and therefore more secure in practice than permissionless ones.

Wikipedia