A chain of blocks lined up in a specific order. They are stored in a distributed registry. Each block is confirmed by the algorithm and is recorded in the blockchain upon reaching consensus. Now in plain language.

A settlement of 353 people lives on an island in the Ocean. There is a glade on it there are several hundred large heavy stones, each has its own owner, the population uses them as a medium of exchange. All week long, residents spend deals: they change their stone for a horse, a bag of rice, give them, give them in payment of their work. But every Sunday all the islanders gather in the meadow and in turn voice the deals that were made during the week. They say – I gave my stone to my neighbor in return received a boat, another can say that I gave the stone to my son, etc. All this is heard, and each writes changes in his notebook. After this Sunday’s conversation, all the inhabitants of the island know which stones have changed owners. So when everyone learned, confirmed and recorded – this is a consensus. The notebook that everyone has is blockchain. Since there is a notebook for every inhabitant of the island and they are absolutely identical – this is a distributed registry.

Now you understand how big the area of ​​practical application of the blockchain and its advantages are, which are available only to the blockchain.

All registries of rights to real estate, land, cars, branded goods are more reliable to maintain on the blockchain. The blockchain has such a feature, the information that is recorded in the block – can never be changed! Elections, referendums, voting – of course only with the use of blockchain technology.

Often reading the word blockchain – people understand Bitcoin. Consider how the Bitcoin network works. The miners, or rather their computing powers, are the custodians of the distributed registry and consensus participants. Online  transactions, they fall into the block, when all participants agree that the transaction is correct – consensus occurs and the block is recorded in a notebook, that is, the blockchain. Every blockchain has an algorithm, if you sent one bitcoin to another address, then the algorithm checks if you have this bitcoin, if everything is ok, it confirms, and each miner confirms on the network.

In addition to himself, Bitcoin rediscovered the Blockchain technology, which formed the basis for its creation. In fact, Blockchain is a database that does not have a single storage center, all information is stored on millions of users’ computers integrated into the network. Such a system cannot be damaged or deceived. It represents the highest level of accounting and automation. The Blockchain technology is already being used by leading banks, financial institutions and even governments to streamline data protection and preservation processes and restore order in the area of ​​property rights.

Whether we like it or not, the world will never be the same. Digital currencies, Blockchain, Internet of things – all this has become part of everyday life.

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2 thoughts on “What is a blockchain and why is it needed?”

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