B is for Blockchain

#learning #tech #bestofdev #blockchain

Blockchain has evolved from a niche buzzword into one of the most in-demand technologies of our time.

Imagine a world where money, contracts, and even digital art can be traded without the need for banks, intermediaries, or concerns about trust. But everyone can still see and verify each transaction. Welcome to Blockchain.

This post introduces Blockchain. What it is, why it exists, and where it fits in today’s technology.

What this post covers

What is Blockchain?
Real-world analogy
Why does Blockchain exist?
How Blockchain works (high-level)
Where Blockchain is used
What deeper topics are intentionally left out

What is Blockchain

Blockchain is a type of immutable digital ledger, a secure, decentralized distributed database that records transactions. Information is stored across a network of computers. Each transaction is recorded in blocks, and each block links to the one before it, forming a chain. Once recorded, the data is nearly impossible to alter.

Real-world analogy

The Infinite Cargo Train

Think of blockchain as a train made up of cargo cars, where each car carries a list of verified transactions. Once the car is filled, it is locked, labelled, and permanently coupled to its previous car, forming a chain.

Many inspectors along the railway have identical records of the train, so if someone tries to alter the contents of any car, the mismatch would be immediately detected. Because no single inspector controls the train and every car must match the existing chain, the system remains secure, transparent and resistant to tampering.

Why does Blockchain exist

Blockchain exists to solve the “Trust Problem” (also known as the Byzantine Generals Problem in computing).

Its core purpose is to create a verified, unchanged history for digital assets and information, ensuring integrity and accountability without relying on a central authority. With cryptography and distributed consensus, blockchain replaces trust in people or institutions with trust in code, enabling strangers to transact safely and reliably without needing to know or trust one another.

Benefits of using Blockchain:

Greater trust
Enhanced security
Better traceability
Increased Efficiency
Automated transactions

How Blockchain Works

You might be familiar with spreadsheets or databases. A blockchain is similar in that it stores information, but it is a distributed and immutable ledger that records transactions securely and transparently.

- Records transactions as blocks: On a blockchain, each transaction is recorded as a block of data. Each block of data represents the details of who, when, what, where, and the transaction amount.

- Connection between blocks: Every block is connected to its previous one, forming a secure chain of data. The chain is done through cryptographic hashes, unique identifiers for each block. The block’s hash not only represents its own data but also incorporates the hash of the previous block, ensuring the exact sequence of each transaction.

- Formation of an immutable chain: As blocks continue to be added, they form an irreversible chain known as a blockchain. Each new block references the previous one, strengthening the integrity of the entire blockchain. Once a block is added, it cannot be altered without consensus of the network, which is why blockchain is a highly trusted and transparent ledger.

Where Blockchain is used

Capital Market: Unlocks easier, cheaper and faster access to capital.
Digital Identity: Protects against theft and provides individuals greater control over their data.
Energy and Sustainability: Increases efficiency and reduces costs associated with oil and gas operations and distribution.
Finance: Enhances the efficient digitization of financial instruments, which increases liquidity and reduces counterparty risk.
Government and the public sector: Builds trust, improves accountability, creates high-performing government functions with more secure, agile and cost-effective structures.
Supply Chain: Track goods, verify authenticity, and automate payments.

and many more…

What this post didn’t cover

Each topic requires a separate post