For further actions, you may consider blocking this person and/or reporting abuse
For further actions, you may consider blocking this person and/or reporting abuse
djibril mugisho -
Vikas76 -
Syed Khaja Moinuddin -
Eden Wheeler -
Top comments (3)
Let's say we're talking about bitcoin, though the general idea is similar across blockchain systems. If you send me a bitcoin, that transaction will be added to a group of transactions called a block. When a block is full of transactions, it is added to the chain. The blockchain is a list, or chain, with all of the trades of bitcoin ever made stored on it.
The tricky part is this: The blockchain is not managed by any one person or organization - it operates by consensus. Every node has its own copy of the blockchain and decides whether a given block should be added to it. New blocks are propagated from one node to its peers, and then to the peers of those peers, and so on. Nodes accept the longest blockchain, because It's very hard to make the blockchain longer. As a result, if you have a lot of computing power, you're probably better off using it to make money by legitimately extending the blockchain than by trying to get away with some form of fraud.
Note: Bitcoin uses "proof of work". The idea is that it is very hard (requires a lot of computing power) to create a new valid block, but it is easy for a peer to check whether a block is valid or not. There is also the idea of using "proof of stake" instead. I believe Ethereum are planning to switch to this newer system in order to cut down on the computing resources required to manage the blockchain. It is trickier to make sure proof of stake won't be abused though.
When you send someone a picture on the internet it's a copy, so you will both have the picture. But when you send someone things on a blockchain, it's not a copy. It's like passing real things like a teddy bear - you won't have it anymore after sending it. But it's also like money, so you can buy new things with it... well, actually not today, because not many people use blockchains, yet. But when you're grown up blockchains will be everywhere and you can buy almost anything with them.
The blockchain is something new and useful.
Unfortunately, the useful part is not new and the new part is not useful.
The useful-but-not-new part is that its datastructure is a Merkle tree - something you know already, it's like git.
The new-but-not-useful part is that it has a decentralized consensus algorithm. Technically it's impressive, but it is also very complex, which means for whatever thing "you can do with the blockchain", there is a simpler - therefore better - technical way to do it. Therefore in most cases the blockchain is "needed" not technically but for ideological tech-bro libertarian reasons.