What is Blockchain?
A blockchain is a public ledger of information collected through a network that sits on top of the internet. It is how this information is recorded that gives blockchain its groundbreaking potential.
Rather than keeping information in one central point, as is done by traditional recording methods, multiple copies of the same data are stored in different locations and on different devices on the network, such as computers or printers. This is known as a peer to peer (P2P) network. This means that even if one point of storage is damaged or lost, multiple copies remain safe and secure elsewhere. Similarly, if one piece of information is changed without the agreement of the rightful owners, there are countless other examples in existence, where the information is true, making the false record obsolete.
Why is it Called “Blockchain”?
Who Created Blockchain?
Blockchain for Kids
Blockchain is all about fairness and security. It is a big database that lets you record information safely and interact with anyone, without the need to trust them or rely on a big company.
We all interact everyday with one another, mostly on the internet. We chat, we buy things, we use services like banks. But how do we know who to trust online, especially if we’ve never met them but want to deal with them directly? Some companies will check who can be trusted or have reviews of products and sellers. But these businesses can also charge expensive fees. We should be able to deal with each other safely without the need for a “middleman” and pay for it.
Explain Blockchain Like I’m 5
Why is it called Blockchain?
Blockchain Network Explained
In the example above Jacob wants to go to as many rides as possible during his day at the funfair. In the centralized funfair he always has to go to the ticket booth where he needs to queue every time he wants to go on a different ride. This means he has less time to enjoy as many rides as he would like. The centralized model is slower because everyone at the funfair have to all go through the same ticket booth, where the ticket sellers have control in choosing who can go on rides. The central point slows everything down and gives power to one person, the ticket seller. In the decentralized model everyone is free to move from ride to ride as they want, everything flows smoother. Not having a central point can be a lot better as it allows things to move around more freely and safely, in the case of blockchain this would be information.
What is a Node?
- Store some of the information recorded on a blockchain.
- Store a copy of all of the information recorded on a blockchain.
- Process transactions, put them into blocks, add them to a blockchain, approve them and broadcast them to the network. This is called mining or forging.
For the nodes processing transactions, doing the mining or forging, it is very important that the node is always up and running. A node that is not running could miss a chance to validate a block of transactions, meaning the miner misses out on their rewards or, even worse, being removed from their role as a miner or forger.
Mining Made Easy
Consensus for Kids
Having consensus means being in agreement. Consensus protocols are the rules that allow the devices on a huge network of computers, spread around the world, to agree about what should be added to the database that is a blockchain. They are one of the most important parts of blockchain technology.
What is PoS? (Proof of Stake)
What is PoW? (Proof of Work)
Consensus protocols are special because they allow unrelated devices to all come to an agreement with the need for centralised leadership to guide them. They also do this without there being a chance of the protocol being cheated, which is an incredible achievement and one of the most revolutionary aspects about blockchain technology.