This short article will explain the blockchain in very simple terms. In less than 3 minutes you will be able to understand and visualize the blockchain.
What is blockchain?
To understand blockchain we have first to define the word block. A block is just a record of new transaction like money transaction, medical information, or any other types of data.
Now we understand the word block, let us see how the blockchain works.
1- When the block ( transactions or data ) is completed and then validated (making sure it is legit), it will be given its own timestamp ( Timestamp is a digital record of the time of this particular transaction).
2- Then this new block will be also given some data that verifies the block before it ( some think of it as the history of the block before it.)
3- Then this new block ( that has its own identity, timestamp, being validated, and contains history of the block before it) will be added to the other blocks in the network creating the block chain.
4- These blocks ( records /data), are distributed and stored in network of computers all over the world and is managed autonomously in a decentralized way.
5-When a new transaction is added the same process will take place and the new block will be added to the network.
So we can view the blockchain as continuously updated and verified records or data that is stored and distributed across network of computers.
That is it, this is the main idea of the blockchain. Of course it is more complicated than that, but if you understand the main idea, you understand the blockchain and the way it works.
Why is blockchain technology unique?
What makes blockchain technology unique is the way it stores data. As you know by now that the data is replicated, stored and distributed across millions of personal computers which makes it hard for any one to take the network down or control the network.
But what is more important is that the data or records are almost impossible to be hacked or tampered with. Because if someone tries to change records in one block, all other blocks will know and reject it.
Also the records or data on the blockchain are available to everyone and can be verified and audited which make the network trusted and transparent.
Blockchain makes transactions fast, safe, secured, trusted, and also economic.
Applications of blockchain
It could be used in almost every aspects of our life. It could be used in internet applications, TV broadcasting ,insurance claims and policies , money transactions, shipping transactions, car rentals , factories , banks, hospitals, and any industry that use data transactions.
In the next few years, blockchain technology will give us more freedom, luxury and control of our lives, and will change the way we live.