What is Blockchain ?
Blockchain is decentralized database that keeps information in the form of blocks chained together and secured through cryptographic hash.
Let's deconstruct, what we have said above :-
Blockchain is decentralized: Instead of a centralized entity, keeping and controlling all the information, the information in a blockchain network is kept decentralized i.e. in all nodes (nodes are the participants of blockchain network). Every node in the network holds copy of whole blockchain database.
The information in a blockchain is kept in form of blocks
Every block holds information (i.e. Transactions) , a cryptographic hash of the information present in the current block and hash of previous block. This link between current block and hash of previous block creates a chain of blocks.
The essential properties of blockchain are as following
- Decentralized : Peer to Peer decentralized nodes connected to from a blockchain network
- Programmable : Blockchain support smart contracts, smart contract is a piece of code that gets execute when certain conditions are met.
- Permission less : Blockchain is not permissioned. There is no centralized validating authority in blockchain to mark valid/invalid each transaction.
- Immutable : The information stored in blockchain cannot be modified. In order to update a new record has to be added. Immutability ensures trust in blockchain, knowing that your information cannot be modified ensures trust.
- Secure : The information in each block is secured through cryptographic hash function.