Blockchain essentials in 3 minute read
Nowadays we keep on hearing about blockchain and that it’s an evolving and rapidly spreading technology but it is still pretty unclear what it is in fact for millions of regular people.
In my article I would like to offer you as simple explanation as possible 💡💡
What is blockchain?
I think the most important thing to start with is that it is a decentralized public ledger that exists across a network. What does this mean in practice? It means that there is no central storing database but it functions on copies of the same database, distributed between numerous independent computers (nodes). Nodes can be full nodes or light nodes and the difference between them is that full node has a full copy of database, which is updated immediately after a new block in a chain created (simply saying: once some node in a blockchain solved the puzzle)
How does the blockchain look in practice?
This is how it looks — no centrally stored data, making it a way much harder to crack the system, because if one datacenter is down, there are millions of others in the chain, which won’t allow a new data to be added, removed or edited, because each device in the system is in consensus with the rest of devices and each block of the chain in the system has the same unique hash. Simply saying data is mirrored across all devices.
What are the miners?
Miners are nodes, devices solving computational puzzles and they must always run on full nodes, to be able to go through the hash verification process. Hash is a function that meets the encrypted demands needed to solve for a blockchain computation.
Ok, looks cool but except for crypto and transactional functionality, what is the benefit of it?
Once I started learning more and more about blockchain, I discovered the world of Web3 and smart contracts that was unknown to me so well before. Personally I think smart contracts are the future.
Smart contracts are simply programs, stored on a blockchain that run when predetermined conditions are met. They typically are used to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without any intermediary’s involvement or time loss.
It’s like ‘no person’ check-in — so popular in Australia and I always loved it. No words, just meet the requirement and the contact is executed. My term is the payment, once I get it, I’ll leave you the keys:)
You can predefine as many requirements as you wish and once they are met, automated execution of the agreement comes.
So when it comes to the blockchain I see in it a great present and future of utilization in the areas where secrecy of identity and resistance to hacking systems is a must, allowing safely storing and operating with data in a more secure way then with a centralized way of it.
Congratulations, now you know the basics! See you at my next blockchain post! ;)
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