Blockchains

The term blockchain has two different meanings, it can either relate to a data structure or to a computer network.

A blockchain (data structure) consists of sets of transactions or data bundled inside a container where each container has a cryptographic hash of the data in the previous container (block) within it. If the contents of the previous block change, the hash changes as well and thanks to this feature we can assure that the data hasn’t been tampered with. The second consequence of the blockchain data structure is that it is append-only. You can’t prepend data to it, nor modify the data already within it, as that would alter the hashes of all the blocks succeeding the ones that have been modified. This is why we call blockchains immutable.

A blockchain (network) is a network of computers that have a synchronized ledger of transactions that uses the blockchain (data structure) for storing data (usually inside of merkle/verkle trees). The blockchain is powered by miners/validators which operate under a so-called consensus algorithm, this algorithm helps coordinate who produces and organizes blocks as well as indicating which is the longest chain, by updating the head of the blockchain continuously. Blockchains have 3 main properties which they try to optimize for; Security, Decentralization, and Scalability. They achieve security and decentralization through their consensus algorithm where many different parties need to either provide resources mostly in the form of running expensive operations on massive hardware facilities with Proof-of-Work (PoW) or by staking economic resources in the network with Proof-of-Stake (PoS). The more participants and the more distributed the power dynamics among those participants, the more security and decentralization. There are many other features that contribute to decentralization, like client software which is able to be run on consumer hardware so that anyone can synchronize the state of the blockchain in their nodes, minimizing how many transactions you can process per block so as to not make the state of it too big and much more.

  • Further reading

In order to understand how blockchains work beyond my simple explanation here read and watch the following resources:

← General foundation
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