What is Blockchain Technology? – 101
Blockchain can be defined as a system of recording information to make it impossible to alter, distort, hack or cheat the system.
Small parts of information are stored in a public database known as ‘blocks’, Each block holds a unique reference which links it to another block forming ‘the chain’ The process allows anyone on the network to witness all activities in real-time. It also makes it nearly impossible for a user to gain control of the network. Blockchain is the record-keeping technology behind Bitcoin and other digital assets.
A simple explanation?
A school has organized a trip for its students. The organizers have asked each student to carry a packed lunch. Student Y has cookies and a bottle of soft drink. Student X on the other hand, has a full lunch box packed with sandwiches and fruit. At lunch, student X agrees to trade a small portion of their lunch box for student Y’s cookies. As the trade takes place, all other students on the lunch table are witness to the exchange. The class teacher notices the exchange and wants to find out more, so asks the class to explain. The entire class resopond in unison with the exact same account of the exchange.
In the above example, student Y and student X can be defined as cryptocurrency users, crypto owners, or crypto traders. The lunch boxes are the digital assets (cryptocurrencies) that the two traders are exchanging, and the table is the “Blockchain” or the platform that supports this transaction. The entire class are the traders or “peers” witnessing the transaction. The class teacher’s request to understand the detail of the trade is the approval or validation stage of the transaction. On a normal trading platform, using this analogy, all students could trade their lunch boxes, with the other students acting as the peers who witness it.
Can I view the blockchain?
Yes, this is one of the most important aspects of the blockchain behined cryptocurrency. Every transaction is recorded on the blockchain and everyone has access to it. You can find and watch a transaction including it’s progress in real time, online using a blockchain explorer. You can search online for various blockchain explorers, simply by entering your wallet address, and you will see all transactions that have ever occured or are in progress.
Here is an example of viewing the blockchain for a given bitcoin wallet address. Essentially it’s the same as entering a bank account number and seeing how much the accounts holds, plus all the historic transactions. The key difference is that you can look at any bank account you want, it’s public.
Blockchain technology supports participants (traders) as they engage in the transaction of digital assets. The peers on the Blockchain are the witnesses, as traders reach consensus to transact their assets. The peer-to-peer transactions are guided by the rules set under the contract, which contains the parameters guiding the transaction. It also explains the “decentralization” concept of Blockchain technology, and the Blockchain will support all transactions by ensuring all records are kept securely.