What is a blockchain?

Blockchain technology is changing the world at a rapid pace. Kids just becoming familiar with terms like blockchain, hash, and hardfork might need some help to better understand them. So we’re going to spend some time explaining these concepts on a level kids can understand. And our first question would be, what exactly is a blockchain?

The answer is pretty simple: a blockchain is a ledger.

Way back when, a paper ledger is what accountants used to keep track of money: the incoming money and outgoing debits. Accountants were also called “bookkeepers” because these old ledgers looked like books: the sheets of data were bound for easy storage. And the accountants had to keep or maintain these books of information in order to keep business moving and banks running.

But they weren’t just for money tracking. We’ve used ledgers of all kinds to keep track of any type of data list. For example, a hotel ledger kept a running list of their guests. A sports ledger kept a record of wins, losses, and statistics. A payroll ledger allowed a company to keep track of payments made for the hours their employees worked.

Then, along came computers and we moved our ledgers from paper to digital spreadsheets. An accountant could input numbers rather than writing them down, and make automated calculations. These digital spreadsheets were a revolution in bookkeeping because the data could be rearranged and reorganized with a few simple clicks. Columns of data could be added together. Input types could be grouped.

Like the paper and spreadsheet versions that came before, a blockchain can be a list of financial exchanges (and many of them are). But a blockchain can be any list of information that can be digitized. Anything that can be turned into digital data can be recorded on the blockchain.

So a blockchain is very similar to both a paper ledger and a digital spreadsheet. But a blockchain differs from both paper ledgers and spreadsheets in one very important way: a blockchain can’t be altered. A blockchain record makes it impossible to “cook the books” – the act of committing fraud by changing the amounts of a financial ledger.

The reason it’s impossible to alter or “cook” a blockchain record is because it’s decentralized: no one person or entity has control over it. Its data can’t be removed. Its data can’t be altered. Its data can’t be censored. And that one difference makes all the difference!

Next time, we’ll look at how “nodes” work independently yet cooperatively to build the blockchain. (This series was originally published on the @geke account at steemit.com.)

Leave a Reply

Your email address will not be published. Required fields are marked *