Blockchain is a decentralized, distributed ledger technology that records transactions across many computers so that the record cannot be altered retroactively without altering all subsequent blocks and the consensus of the network.
Imagine a public record of land ownership stored on a blockchain. Every time a piece of land changes hands, a new block is added to the chain, recording the transaction. Because everyone on the network has a copy of the ledger, it’s very difficult to forge a deed or claim ownership of land that doesn’t belong to you.
To better understand the blockchain, lets dive in
- Centralized- means that someone is in control. It can be a person, entity or a company for e.g. Banks( equity, KCB). The banking system is in control of all the accounts ,all the users and all the money. Social medias owners (Tiktok, FB)control all your accounts and that’s why they can pull ten down or even ban them
- What we want to move away from is the centralized systems to decentralized systems. But the question is, who will maintain the data??
Lets say A wants to send $10 to B and B wants to send $50 to A
In a centralized system where banks / PayPal are the central bodies, the txns details will be stored in their servers. So that even if B claims to have received $5 and not $10 , or A claims to have not received the $50,the records from the central bodies can be retrieved as evidence
So what happens in a decentralized system?
- In this peer to peer network is implemented. That is if A sends $10 to B ,the txns details are not only stored by A and B but an inclusion of other people C, D etc. Incase the txns rises an issue in the future, other people have the evidence of the txns details
- This data is stored in form of a ledger. Every transaction will be open source so everyone can see/retrieve /maintain it
- The ledger carries all the txns done over a specific period of time.
How is data stored in blockchain????
Different blockchain implementation have different time limits. The first implementation of blockchain which is BTC , which has a time window of 10 mins not fixed but average.
Whatever transactions happens in this 10 mins that ledger will go into a block, thus after every 10 mins new blocks will be formed and that’s how you achieve multiple blocks
This Blocks are chained by a concept of cryptography called hashing.(We shall look at it in depth in the consequent classes)
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