Blockchain

The term blockchain can refer to two different meanings. It can refer towards a data structure or to a computer network.

Blockchain as a Data structure

A data structure blockchain is comprised of sets of transasctions or data packaged inside a container where every container holds a cryptographic hash of the data in previous container. Let's call these seperate containers blocks. If the data of the previous block is changed, the hash of the block will change as well, and due to this feature we are sure that the data is not tampered with.

Another concept of blockchain is that it is immutable, or unable to be changed, modified or rewritten. Blockchains are append-only. You can't prepend data to it or modify it as it will change the has of all the blocks that succeed the ones that have been modified. This is the reason why blockchains are referred to as immutable.

Blockchain as a Computer network

A blockchain network is a network of computers that each have the same list of transactions that use the blockchain data structure for storing data. Each one of these synchronized lists is called a ledger.

The blockchain is powered by either miners or validators who utilize a consensus algorithim (opens in a new tab) to help coordinate who produces and organizes blocks. In addition to this, the algorithim determines which is the longest chain by updating the head of the blockchain continuously.

Blockchains have 3 main properties:

• Security
• Decentralization
• Scalability

They achieve the first two through the consensus algorithim where many different individuals need to either provide resources on massive hardware facilities with Proof of work (opens in a new tab) (PoW) or by staking economic resources in the network with Proof of Stake (opens in a new tab) (PoS). The more participants that the network has contribute to more security and Decentralization.

Besides this brief explanation of blockchains, please watch this video (opens in a new tab) for an elegant and simple explanation of how blockchain works. It will help with understanding some of the later pages of this guide.