Summary

  1. A blockchain is a distributed database that is shared among the nodes of a computer network.
  2. As a database, a blockchain stores information electronically in digital format.
  3. Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and decentralized record of transactions.
  4. The innovation with a blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party.

ref

Another definition

Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved. ref

How it works?

blockchain is a growing list of records, called blocks, that are linked together using cryptography.

Proof of work

To tamper a block the hacker should have to change all the blocks in the chain, redo the proof of work for each block and take control of more than 50% of the peer to peer network to update the record in all the nodes of the network. This is almost impossible to do.

Proof of work

  1. Generating just any hash for a set of bitcoin transactions would be trivial for a modern computer, so in order to turn the process into “work," the bitcoin network sets a certain level of

“difficulty.”

  1. This setting is adjusted so that a new block is “mined” – added to the blockchain by generating a valid hash – approximately every 10 minutes.
  2. Setting difficulty is accomplished by establishing a “target” for the hash: the lower the target, the smaller the set of valid hashes, and the harder it is to generate one. *In practice, this means a hash that starts with a very long string of zeros.

ref