A quick and simple explanation of how Blockchain works!

We often hear Blockchain and Bitcoin used interchangeably, yet blockchain technology goes way beyond transactions (even though in all fairness it currently is the most popular type of application). Here is a simple explanation of what in the world is blockchain and how it works:

A blockchain is simply a shared record book (or Ledger) that can be used to store many type of content or information.

Each ‘block’ in the blockchain can be considered as a new item line added to the record book. Every new block is added linearly on top of the previous block and what makes a blockchain secure is that the newly created block cannot be manipulated, altered or removed in any shape or form after it is created and thus the record is permanent.

The blocks are created and verified based on a distribution of all the information contained in the blockchain through thousands of individual users (known as nodes). The nodes need to collectively agree upon not only the common digital history, but also the individual changes and additions to the blocks.

The record book has no central controlling authority, and is owned, maintained and updated by everyone who has a copy of it. The more popular the blockchain, the more nodes there are to work on verifying the movement of information.

Many blockchains are public type ledgers, which means that everyone can see the movement of information or transactions, from the very first block created to the most recent. What you cannot see are names and private information of the sender and receiver, only a publicly available blockchain address (hash)

Currently the most popular type of application for blockchain usage are transactions, cryptocurrencies such as ‘Bitcoin’ represent a new form of monetary exchange, devoid of third party banking and or government manipulation. However transactions are only one type of blockchain application, many others currently exist such as medical data, supply chain management, content delivery, voting and more.

In summary a blockchain is a publicly available and managed record book (ledger) that can store and transfer many types of information, and which is not stored in one central location, but is instead ‘decentralised’.