Blockchain explained the Easy Way

Hello there,

Ever since I took a dip in blockchain space, everybody ( and that include people in high places) around me seem to ask as to what exactly is 'Blockchain' !

Its actually good that they ask because a lot of people who don't (and know nothing about it) pass it on like a new fad that will go out soon or worse term it as a ponzi scheme. Well, actually they are not to be blamed because the amount of media space and financial muscle Blockchain has gathered in a few years (10 to be exact) makes one feel that the downfall will be equally fast.

Much of this is attributed to the myth that 'Blockchain is same as Bitcoin'. But the truth is that except for the first letter, Blockchain is much bigger ( and better) than Bitcoin. Bitcoin is just one deFi (distributed finance) application and was the first application to be launched on Blockchain.

For the first four odd years, till 2013, Bitcoin was the only application based on Blockchain.

But all that changed once Ethereum came in. Ethereum coined smart contracts ( actually a coded program) that could be saved on Blockchain and used for applications other than finance too.

But what is Blockchain? Well, let me give you a small example. You read newspaper everyday, don't you? 

Never mind if you don't because we are flooded with a lot of news ( including fake ones) on TV, social media & other channels during the day that one doesn't feel like reading a newspaper  nowadays.

What if you wanted to change a news that was published in the WSJ yesterday? Well, you'll have to go to all the homes and offices that the newspaper was distributed and cut out the article ! Think you can do it ? Answer is NO.

Similarly, Blockchain is a database ( yes that's it ) that is not sitting on a single server location but distributed to a large number of nodes.

A group of activities that are performed in a given time are clubbed together in a ledger and formed a block. This block is then distributed. Each block has a reference to the earlier block thus forming a chain. That's it ! Blockchain is formed !

Once a block is formed, it cannot be changed, so data on a Blockchain is immutable (unless you go to 51% of nodes and ask them to edit the data of a particular block and all the blocks mined (formed) thereafter, much like the newspaper case discussed above).

This technology is also known as 'Distributed Ledger Technology' or DLT.

I think that was enough gyan (knowlege) for today. I'll come back tomorrow again with a little more detail on Blockchain and your favorite Bitcoin.

Bye for now.

Ashish