The blockchain is an open source, distributed public ledger that can keep records of the transaction between two parties efficiently; in a verifiable and immutable way without the need for an intermediary.
Each transaction in the public ledger is verified by consensus of a majority of the participants in the system. The information added to the blockchain can never be erased or tampered with.
HOW DOES IT WORK
Understanding how a blockchain works can be pretty technical. But let me share with you an analogy that worked perfectly for me. Imagine a blockchain to be like a magical book. Anybody who wants can get a copy of this magical book for free. What is magical about the book is that anybody can add lines of text to this book and those lines of text will appear automatically on everyone’s copy of the book. Now imagine that those lines of text are not just lines of text but transaction records; so the book is like a public database and it’s a long growing list of transaction records that were ever added to the blockchain.
This book is so magical that any transaction that didn’t actually take place; let’s say insufficient fund or wrong password are automatically rejected by the book. Once a line is added to the book, it can never be removed or changed. Every few seconds, the pages of all the books check in with each other to ensure they are in sync and once a page is verified, it is sealed forever. The only way to destroy the book is to destroy every single copy of the book. So even if the original author destroys the original copy of the book, the book lives on.
This analogy is similar to how blockchain works. Its power is in allowing an internet network to operate reliably without a central point of control. It does this through a network of interconnected computers so that together, they are in charge of running and securing the system.
The blockchain is particularly useful because it allows users to place their trust not on magic neither on humans, but on an open and transparent algorithm that reliably logs and transfer value seamlessly between people with no need for a central control. This is made possible through the science maths and cryptography.
Israel Martins is a cryptocurrency researcher and trader since 2016, passionate about blockchain and other emerging technologies.