What is a Blockchain? (ELI5)

Imagine a giant, super-secure book that everyone in a club gets a copy of. This book is called a blockchain.

Each page in the book is a block, and it’s filled with information like who bought what or who sent money to whom. Once a block is filled up and everyone agrees on what’s written in it, it’s locked shut and added to the book.

The cool thing is, no one can change what’s already written in the book. It’s like a permanent record that everyone can see and trust. This makes it hard for anyone to cheat or lie, because everyone knows the truth is written down.

So, a blockchain is a way to keep track of things in a way that’s fair, honest, and can’t be messed with. It’s like having a super reliable record-keeper that everyone trusts.

Blockchain can be compared to a book of permanent records, where every page acts as an information holder:

Let’s take a closer look at existing data storage solutions to understand the difference between these systems:

Centralized Systems: Imagine a library with only one librarian. They control all the books, who can borrow them, and when they’re returned. If the librarian is sick or the library closes, no one can access the books.

Distributed Systems: Think of a library with multiple librarians, each managing a specific section. If one librarian is unavailable, other librarians can still help.

Decentralized Systems: In this case, there’s no single librarian. Instead, everyone in the library is responsible for maintaining the books. They all agree on the rules and work together to keep the library organized. This makes it harder for any one person to control the library and ensures that everyone has access to the books.

Finally, blockchains not only provide an immutable and secure database but also act as a functional environment to transact funds, create digital currencies, and process complex deals using digital agreements (smart contracts).

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