Market Watch
January 29, 2022
3 minutes read

Here Is A Basic Explanation Of What A Blockchain Is

A Blockchain is a decentralized system which means that it is not controlled by a single organization.

A lot has been written about Blockchains but mostly the literature is for people who know and are already established within the Blockchain domain. Understanding what Blockchains are in simple and basic terms is not always easy as many people think.

Abbas Khan, from the People’s Republic of China, did and who is a Blockchain Developer, did an interesting thread on Twitter that made the understanding of Blockchains look easy. According to Khan, Blockchain Developers are smiling all the way to the bank more than “normal developers.”

Blockchain developers are earning twice as much as normal developers💰

But what is blockchain?

Here is a very basic explanation of Blockchain technology

A thread 🧵

— Abbas Khan 🇦🇫🇨🇳 (@KhanAbbas201) January 28, 2022

What is Blockchain?

This is a chain of blocks that are chained together. Sounds like a joke, right? It is a decentralized system which means that it is not controlled by a single organization. Blockchain is preferred because it stores data in a way that makes it almost impossible to hack.

“Blockchain is a shared and permanent database shared among nodes on a network,” opined Abbas.

What are nodes?

We have said that Blockchain is a “shared and permanent database among nodes on a network.” So, what are nodes? According to The Times Of India, nodes are those store, spread and preserve the blockchain data, and thus it can be said that a blockchain exists on nodes.

Abbas says that every node keeps a copy of the previous node in the form of unique IDs known as Hashes. A hash itself is basically a numeric value that is used to validate the authenticity of different types of inputs. These hash values can be in different length sizes, from 160-512 bits.

Centralized Vs Decentralized Blockchain Systems

In a centralized system, the database consists of a single server into which all the data is stored. So it’s safe to say that all the data resides at a single location and all the applications must retrieve data from that location.

If we were to compare the centralized way of storing data to decentralization in the blockchain, We could say that since the data is stored on a peer-to-peer network of nodes, the blockchain is a decentralized system.

Peer-to-Peer Network

“A peer-to-peer network (P2P) connects nodes directly without the need of a centralized server or a third party, Nodes on a P2P network are typically located near each other and run similar protocols.”