basically a persistent, transparent, public, append only ledger.
It is a system
that you can add data to and not change any previous data within it. The data
added previously, would remain intact. It does this through a mechanism for
creating consensus between scattered or distributed parties that do not need to
trust each other, but trust the mechanism by which their consensus has arrived
Currently, if we
need to make a transaction, most of us use a trusted middle party which is
usually a bank.
Let’s take an
example where user A needs to transfer some amount to user B. User A would use
a third trusted middle party to do the transfer successfully to user B. The
trusted middle part would do the transfer successfully, however would charge
some amount and the transaction time would usually take an hour or so.
attempts to solve 3 things here:
transfer money without the trusted middle party, thereby enabling people to connect
directly with each other.
money faster than the traditional system. In fact, it would be transferred
instantly or within a few minutes/seconds.
the transfer work done cheaper than what the trusted middle party collects.
on the fundamental of distributed and open ledger.
Whenever a new
block is added to the blockchain, it is shared with each node on the
peer-to-peer network and every node would verify the authenticity of the block
and arrive at a consensus post which each node would add this block to their
blockchain. Since it is decentralized, we can say that there is no central hub
where the transaction data is stored. The entire transaction details in the
blockchain is retained on the entire network, thereby ensuring the history is
not in control of one person. This ensures complete security.