Learning Crypto: What is a Blockchain?
This is another installment of Learning Crypto.
Today I want to explain the basics of a blockchain and what is required to make it work. So first, let’s explore how the idea of a blockchain came into existence.
Satoshi Nakamoto, the anonymous creator of Bitcoin, is who we should also thank for the invention of the blockchain.
The blockchain was created as the means to accomplish peer-to-peer value transfer that provides a way to ensure that each bitcoin is legitimate and each transaction is verified and cannot be double spent.
A blockchain is basically a group of transactions that have been verified by the distributed network and are organized into what are called blocks. Once these blocks are filled, they are then verified and added to the chain. They essentially lock in the blocks that preceded them.
It is in this way that a blockchain forms a public ledger where these transactions can be viewed. This also makes it difficult to alter these transactions in a way that allows shady players to falsify transactions for their benefit.
It’s important to note that although these transactions themselves are public, the individuals who participated in the transactions, their addresses are kept somewhat anonymous.
For the sake of keeping things clear, this video will be focusing on the Bitcoin Blockchain.
In order for the blockchain to function, there needs to be some key actors called nodes and miners.
The network is what organizes these transactions into the blocks and verifies that the transactions are legitimate.
These are the jobs filled by what are called Nodes and Miners.
- Miners have a couple different roles in the Bitcoin blockchain. They create new bitcoins by running a specific computer program that after time unlocks a certain amount of Bitcoin that is awarded to them. They also are the ones responsible for creating the blocks of the blockchain.
They organize transactions into these blocks and send these blocks to what are called Nodes to be verified. If their block is selected to be put in the blockchain they are rewarded with what are called block rewards in addition to a percentage of the transaction fees paid by those conducting the transactions.
- Nodes are responsible for more or less monitoring the entire blockchain and ensuring that fraudulent transactions can not occur.
It is the distribution of these nodes that ensures the entire network cannot be manipulated by individuals who wish to create fake transactions for their own monetary benefit. A benefit for being a node for the Bitcoin blockchain, in addition to further securing the network, is that it gives you complete control of your investment in Bitcoin. The downside to being a node is that you are required to download the entire Bitcoin blockchain, this takes up a lot of space and time.
Just because the idea of a blockchain began as a way to establish true peer to peer value transfer does not mean this new type of technology is limited to just that.
This technology can be applied in ways that remove the time and cost of third party middlemen in different areas of business.
Additional Reading/Sources:
More on Miners
More on Nodes
Implications of the Blockchain
Great Blockchain Infographic
Another great piece of education for the newbies at it!
Thanks a lot as it is reenforcing our platforms and the tidal wave of global consciousness to reach the epic proportions it needs to get to to flatten the centralized banking system. All for one and one for all! Namaste :)
Good comment . what is namaste
Thanks a lot, here's a few lines about "Namaste" with which I adhere as closely as can be. Taken from the urbandictionary.com site, here's a bit of an idea about it:
It is "an ancient Sanskrit greeting still in everyday use in India and especially on the trail in the Nepal Himalaya. Translated roughly, it means "I bow to the God within you", or "The Spirit within me salutes the Spirit in you" - a knowing that we are all made from the same One Divine Consciousness.
The more formal greeting Sanskrit Namascar pronounced NAH-mah-scar is also used in India, though less frequently in Nepal. The Hindi "Jai Bhagwan" is also in common use, and carries the same meaning."
In other words, I bow in recognition of the light I am aware of existing within you as well.
Thanks for asking, namaste :)
well, the artice is well crafted for people like me who is trying to understand bitcoin more or say cryto in generally, the writer really invested a whole lot of time to prepare this great article... i am loving it sha.
I like this your comment. What is namaste
Thanks a lot, here's a few lines about "Namaste", taken from the urbandictionary.com site and with which I adhere as closely as can be:
It is "an ancient Sanskrit greeting still in everyday use in India and especially on the trail in the Nepal Himalaya. Translated roughly, it means "I bow to the God within you", or "The Spirit within me salutes the Spirit in you" - a knowing that we are all made from the same One Divine Consciousness.
The more formal greeting Sanskrit Namascar pronounced NAH-mah-scar is also used in India, though less frequently in Nepal. The Hindi "Jai Bhagwan" is also in common use, and carries the same meaning."
In other words, I bow in recognition of the light I am aware of existing within you as well. Thanks for asking, namaste :)
Wow, thanks for swift answer. You are special, just followed you.
Thanks a bunch for the kind words and the fellowship. Namaste :)
Yes. .Just to add... The greeting, when done in person,is combined with a gesture - a slight bow and hands pressed together, palms touching and fingers pointing upwards, thumbs close to the chest ! :-)
Thanks for the addition, some may not know. Namaste :)
My pleassure !
Namaste ! - from the person who live in India :-)
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I really love your content. As a fellow female traveler, it's rare to find women who know much about bitcoin let alone the tech behind it- blockchain. Thank you for the informative post. I think Blockchain acts as a fundamentally different form of security for peer to peer transfer essentially cutting out the need for a middleman: a truly and uniquely decentralized system that is safe and less expensive. Blockchain has the potential to fundamentally change the way we see transactions and security in the future and I'm so excited for this technology to take off with the masses in ways we can't even dream of right now!
Let us continue to fight the good fight ;)
Great intro to the blockchain.
This is the kind of video that we need more of on Steemit. Short, clear explanations that are easily understandable and easily digestible.
While I know the basics of DLT and bitcoin, this vid contained certain info that I was unaware of. Also, the material was presented in a clear and interesting way, so I made sure to watch the entire vid.
Keep up the good work. Full Steem Ahead.
Sometimes a video is better than thousand pictures (in fact, video is collection of frames/pictures without audio). A picture is better than thousand words. Thanks @heiditravels explaining blcokchain in simple words and visual way.
Thank you for the great post! You are an inspiration for myself to get working on creating great content just like yours.
Great summary. Thanks for sharing.
Informatif post thanks for sharing it.
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And thanks for this post it was very interesting
Wow , amazing & interesting, Thank you so much for sharing .
Now i know more about blockchain technology .
Followed & upvoted !