By this time, you must have heard about Bitcoin and cryptocurrency.

You must have also heard about blockchain- the technology underlying these cryptocurrencies.

Though this term has been used for decades, its now becoming very popular with the recent crypto boom.

Many big corporations and venture capitalists are betting billions of dollars on the blockchain.

This may look like something that only tech-savvy bankers and IT professionals can understand, but I would like to break protocol and give you a simpler explanation of blockchain than any other explanation Ive ever heard before

Note: This article is part of our Blockchain series. Do scroll to the bottom for more articles in this series.

Lets try to understand this with a simple example:

Consider a special Google spreadsheet which is shared by every computer in the world and is connected tothe internet. Every time a transaction happens, it gets recorded onto a row of this spreadsheet.

Anyone with a mobile device or computer can connect via the internet and can access the spreadsheet. Anyone can view and add a transaction to this spreadsheet, but the spreadsheet doesnt allow anyone to edit the information which is already there.

This is basically a blockchain.

Isnt it simple?

The same way that this spreadsheet has rows, a blockchain has blocks.

A block is a collection of data. And each piece of data is added to the blockchain by connecting one block after another in a chronological way, much in the same way a row of a spreadsheet follows another row.

And this series of connected blocks one after another makes it a chain of blocks(i.e. a blockchain).

So heres the summary: A blockchain is a global online database which anyone anywhere with an internet connection can use. Because it exists on the internet, it is decentralized, meaning the blockchain ledger is shared among all computers around the world, not in one central location.

And this is why Bitcoin is unique.

Blockchains very first and most famous application is Bitcoin, a peer-to-peer digital currencyfor the modern, digital age.

Bitcoin is created and held on Bitcoins blockchain.

Unlike traditional money, you can send Bitcoin money to anyone and anywhere without seeking permission from banks or governments.

Bitcoins blockchain doesnt care whether you are a human or a machine. Thousands of Bitcoin nodes on the blockchain are equally able to verify the legitimacy of payments. Thats why there is no need for any third party intermediaries like banks.

Bitcoins recent price rally and its mass adoption speakvolumes about the inherent worth of a blockchain concept.

So now that we know what a blockchain is, lets try to decode how a blockchain works. I will be using the example of Bitcoin, as most people are familiar with it.

These blocks have unique features like:

Each block has a date and time attached to it.

Each block has multiple copies placed in several locations.

Anyone can view whats on the block.

When a transaction happens on the Bitcoin blockchain, it goes into a pool of unconfirmed transactions called the Mempool. These transactions are then grouped into a block. After this, miners solve a computationally difficult math problem to add this block to Bitcoins blockchain.

In this way, as more blocks keep on getting added to the blockchain, it becomes more computationally difficult to reverse the transaction or to double spend a transaction.

And simultaneously, Bitcoins blockchain is used by millions of users who are running this distributed ledger on their personal computers. Its like having millions of copies of Bitcoins ledger starting from the Genesis block, whichSatoshi Nakamoto mined.

Each of these copies contains the history of blocks since the beginning of the Bitcoin network. This makes it difficult for anyone to corrupt or take down the system.

Moreover, each transaction is secured by strong cryptographic math.

Anyone who wants to alter the ledger needs to overpower and hack the 51% network to reverse the cryptographic math. This means that a hacker has to hack 51% of the total number of computer nodes which are running this ledger at various locations and at the same time.

Even if one tries to do this, it would require a practically infeasible amount of capital and energy. This is what makes the blockchain unhackable and tamper-proof.

Bitcoin is only one example of a blockchain application.

But blockchain solutions can be implemented across many industries to solve various issues.

Blockchain, as explained above, is an immutable and transparent database of records. This immutability and transparency ensure that there is no need for anythird person to look after the database.

Consider the example of a farmer from Africa. He bought a piece of land, but in a flood, he lost his copy of the deed and agreement of the land. Now he has no way of claiming he owns his land. And he had a digital copy of the ownership agreement on a governmental database, but that too was destroyed during the flood.Now, this farmer is at a loss!!He would have avoided these problems had hefiled his land deed copy on a blockchain, which would have had multiple copies distributed around the world.

This is only one scenario in which a blockchain application would be useful. Apart from this, the technology of blockchain will matter by protecting our identity, verifying ownership, avoidingdouble spending of money, and even running autonomous vehicles!

And its no exaggeration that blockchain technology will soon be an integral part of our lives.

The blockchain is the mother of the over$100 billion cryptocurrency market.

But the success or failure of Bitcoin or any other cryptocurrency will not decide the blockchains future.

Some notable shifts in the blockchain ecosystem are as follows:

Apart from all these, blockchain solutions are being discussed in industries like automobiles, identity management, intellectual property rights, real estate, healthcare, supply chain management, and governance (to name a few).

When all is said and done, only time will tell how disruptive this invention of computer science will be.

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Now I want to hear from you: What do you think about blockchain technology? What more industries do you think it can impact? What practical applications do you see it being used for? Let me hear your thoughts in the comments below!

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Originally posted here:

The Ultimate Guide To Understanding What A Blockchain Is ...