What does Blockchain mean?
Blockchain Meaning
Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. You can think of it as a digital logbook that is duplicated and distributed across an entire network of computer systems. Each time a new transaction occurs, a record of that transaction is added to every participant's ledger. This decentralized database managed by multiple participants is known as Distributed Ledger Technology (DLT). Because the data is stored across many computers rather than a single central server, it is incredibly difficult for hackers to tamper with the history. For a technical deep dive, IBM has published a comprehensive guide on the topic.
Key Takeaways
- It is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system.
- The data is stored in "blocks" that are linked together in chronological order, forming a continuous "chain."
- No single entity controls the network; decision-making is shared among the participants via a Consensus Mechanism.
- It acts as the underlying technology for cryptocurrencies like Bitcoin and Ethereum.
Why It Matters
In traditional banking, you rely on a middleman (like a bank) to verify that you have funds and to process your transaction. This creates a "single point of failure"—if the bank is hacked or corrupt, your money is at risk. Blockchain removes the middleman. Instead of trusting a bank, you trust the code and the network. This allows for "trustless" transactions where strangers can exchange value globally without needing to know or trust each other.
Blockchain Example
Imagine a Google Doc shared with a group of people. In a normal document, one person can delete everything. In a Blockchain version of that document: 1. Everyone can read it. 2. Everyone can add new lines to the bottom. 3. No one can delete or edit lines that were written in the past. 4. If someone tries to sneakily change a line, everyone else's copy immediately flags the error and rejects it.
