What is Blockchain?

One of the most often asked questions people come across these days has nothing to do with Bitcoin directly. Instead, people ask themselves “What is blockchain? Not a blockchain, or THE blockchain, but the concept in general. As banks are trying to show the world, the concept of blockchain applies to traditional finance, although there are other use cases out there. But what is blockchain?

Also read: Bitcoin Ransomware Education – CryptoFortress

What is Blockchain? – The Concept

TheMerkle_List of Information What is Blockchain

When trying to explain the concept of “what is blockchain”, picture it like this. You have a certain list of information, whether it is finances, grocery shopping, a contact list, or anything else you can imagine. But you are the only one with that list, and there is no copy available as a backup.

On paper, there is nothing wrong with this concept, unless something were to happen to either the list or yourself. If the list goes missing, no one but you will know – roughly – what was on there. Or if something were to happen to you, no one might be able to find the list, as they don’t know its precise whereabouts.

This creates an awkward and annoying situation. Being the central authority to create and own said list brings both power and responsibilities to the table. Ultimately, the central authority becomes a point of weakness as there is only one list with this vital information available. Granted, others can try to piece together the list, but it takes a lot of time and effort.

It would be much better if there were multiple copies of that list, spread in different locations. All of the information on that list could be verified against the other copies in existence, ensuring there are no mistakes made. Additionally, if one list would not match up with the other records in existence, that list would be deemed invalid. With multiple copies in existence, it becomes all but impossible to tamper with the information.

This example is an answer to the what is blockchain question. Blockchain is a distributed ledger – multiple copies of the same information – in a decentralized manner – with multiple locations and a copy of that list. When somebody asks you “what is blockchain”, you can use this example to explain the concept to them.

However, this is not the complete answer to “what is blockchain?” , as there is an entire technological explanation that needs to follow this example. While we will cover that information in the next part of this series, it is important to note there are other things to mention when talking about what is blockchain.

Imagine your list of information needs to be updated with additional details. Spreading that information to other parties owning the same information is critical. Translating this to the “what is blockchain” principle, that update process will happen automatically, as all parties involved will receive the new data at the same time, and start comparing notes to determine its validity.

What is blockchain? A tamper-proof distributed digital ledger of information, which exchanges information between all independent ledger operators. This process is called “decentralization”, as there is no central point of failure. Information is accessible at all times, and records are maintained and updated automatically. We hope this gives you an answer to the “what is blockchain” question.

Images credit 1,2

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  • Milly Bitcoin

    All wrong. The blockchain only contains Bitcoin transactions, it is not a database where all sorts of lists can be stored.

    • The current blockchain only contains Bitcoin transactions, we are talking about a blockchain in general. Ethereum’s blockchain can contain lists and smart contracts.

      • Milly Bitcoin

        No, it contains Etherium transactions. it is not a database to store arbitrary data or it would end up as some kind of massive database that must be downloaded by every node. You can see that from an Etherium block explorer.

        • Mike

          More misinformation from Milly Bitcoin. The Bitcoin blockchain is ALREADY “some kind of massive database that must be downloaded by every node”. Lists and other information can be, and are, stored in it. Everybody knows Satoshi Nakamoto put a message in the genesis block demonstrating that capacity.

          • Milly Bitcoin

            The blockchain is database but it only contains Bitcoin transactions and is not a database that can hold large amounts of data. There are small data fields and you cannot put data files in there. Some people have tried to make that claim to try to tank the Bitcoin price by claiming they would put child porn in the blockchain but those claims are not true since that is not possible (unless you want to string together all those tiny data field by doing many transactions. Even then it is discrete tiny messages in hex that must be decoded by some other software.)

          • Mike

            You can include 40 bytes of data in a transaction, which is big enough for a 32 byte hash and 8 other extra bytes of data.

          • Mike

            ^ Just to be specific.. since our resident expert Milly was being coy.

            Also, that was a very subtle mention of child porn. You might have mentioned the Nelson Mandela tribute, or the one to Len Sassaman, the original Bitcoin white paper is found in the blockchain, Wikileaks cablegate data, wedding vows, even prayers… but no, you drop child porn in there with grudging acknowledgement your “The blockchain only contains Bitcoin transactions..” statement was incorrect.

            Are you SURE you’re not a counter agent trying to tarnish Bitcoin?

          • Milly Bitcoin

            You are the one who repeated cultist information but you were too stupid to realize the implications. Now that I have explained you finally looked it up. Learn this stuff before you post your crap that you repeat from the circle jerkers.
            Once again, the blockchain only contains Bitcoin transactions. You are now trolling with knowingly false info to try to prove me wrong. You are a cultist troll.

          • Mike

            You incriminate yourself every time you hurl childish insults in an effort to reduce the respectability of these comments.

            It’s easy to insert messages (data) in the block chain. Just go to eternitywall(dot)it

          • Milly Bitcoin

            That is what I mean. You din’t even understand how things like eterintywall worked before you went around spouting your cultist nonsense. It is idiots like you that keep giving people wrong info and they get disappointed over their experience.

          • Mike

            You mean “idiots like me” with double major degrees in psychology and mass communications who can see right through your propaganda and spin?

            You get paid every time you use the term “cultist”, don’t you.

          • Milly Bitcoin

            Maybe you can analyze yourself and explain why you are going an this childish rant. You were caught not knowing what you are talking about and now you are too childish to admit it. lol BTW – Us people with physics and com sci degrees laugh at people with psych and “mass communication” degrees. You got the degree and you apparently couldn’t get a job in that so you fly helicopters. Maybe you should have gotten real degrees?

          • Mike

            It’s hilarious that you are “projecting” (a psychological defence) your own being caught not knowing what you’re talking about (“The blockchain only contains Bitcoin transactions”) on me. YOU got busted spreading misinformatio and now you say that was me? You’re slipping into psychosis, you effing fraud.

          • Milly Bitcoin

            lol. Your qote:

            The Bitcoin blockchain is ALREADY “some kind of massive database that must be downloaded by every node”. Lists and other information can be, and are, stored in it.

            OK, so store a list of all your mental problems in there and show me where it is on a blockchain explorer.

          • Mike

            I have no problems to list, mental or otherwise, and anyway I wouldn’t compromise my privacy by directing you to any transactions I have or will make.

            YOUR quote: “it is not a database to store arbitrary data or it would end up as some kind of massive database that must be downloaded by every node.”

            In fact, the blockchain must be downloaded by every node.

            In fact, the blockchain is massive.

            Because, in fact, it includes plenty of arbitrary data.

            Such as: 2.5 megabyte Wikileak files (‘cablegate-201012041811.7z’) stored in 130 separate transactions each holding 20,000 bytes of data, found in transactions:

            5c593b7b71063a01f4128c98e36fb407b00a87454e67b39ad5f8820ebc1b2ad5

            to

            2663cfa9cf4c03c609c593c3e91fede7029123dd42d25639d38a6cf50ab4cd44#o6″.

            The data is stored in checksummed download tool format and regardless of how inconvenient it is to store or access the data it proves you were wrong when you said (quote) “The blockchain only contains Bitcoin transactions, it is not a database where all sorts of lists can be stored.”

            END OF ARGUMENT.

          • Milly Bitcoin

            Any adult can see the dishonest way you have approached this. Grow up.

            Also, it was not an argument. I was explaining why you were wrong and I told you to stop disseminating false information. You are an agenda troll.

          • nifurde

            Go Mike…you have a sound argument. The reason why many industries are now looking for means to migrate to blockchain in their daily operation to protect their interest. Any data not only bitcoin can be contained in a blockchain. This guy who claims in the contrary needs to read more about the capabilities of a blockchain technology.

    • JP Buntinx

      The subheader mentions the “concept” of Blockchain, not the technical implementation, which will be covered in a later article. Blockchains can exist without Bitcoin, Ethereum, or any other type of currency. Whether or not those “other” blockchains are a viable concept, is a different discussion.

      • Milly Bitcoin

        You don’t understand the concept since it never includes maintaining a database of random data in the blockchain. The blockchain is a set of transactions that you can link to a centralized system. the information in the centralized system can be verified using the blockchain data but the information itself is not contained in the blockchain. Any system that attempted to put massive amount of information in a blockchain will quickly melt down because everybody has a copy. Factom is a good example, talk to them.

        This is why I keep begging you to stop writing these articles. You have no idea what is going on and you just repeat cultist nonsense over and over. All you are doing is spreading misinformation and you don’t check with knowledgeable sources before you post your nonsense.

        • Mike

          “All you are doing is spreading misinformation and you don’t check with knowledgeable sources before you post your nonsense.”

          Much like you spreading the misinformation that BTM’s have fees of 15-20% when actual average fees are 7.13%

          This is why I keep begging Milly to stop commenting on these articles. He makes quite the effort to discredit Bitcoin and demoralize it’s users. He poses as a Bitcoin cheerleader but his true agenda is made plain by reading his profile posts. Never made a single unqualified positive statement about BItcoin, but refers to himself as a “promoter”.

          • Milly Bitcoin

            Yes, several people complained on reddit that they ended up paying 20% in fees when using ATM’s. I believe those places went out of business because they offered poor service. At over 7% there is no basis for a consumer to use Bitcoin unless they absolutely need it like a cryptolocker situation. Promoting Bitcoin ATM’s without telling people about the fees makes Bitcoiners like you look like scammers. in your case you are probably just an idiot but people will think you are a scammer.

          • Mike

            People who’ve followed our recent exchange know:
            1) I’m eager to advertise the fees at my BTM because they are well below average, at 5%
            2) There is certainly a basis for a consumer to use a BTM despite the cost.
            3) You are a hypocrite, you routinely make gross exaggerations, you gleefully spread misinformation, and you’re a known liar and suspected fraud.

          • Milly Bitcoin

            You are a mental case. Nobody is following you. lol

          • Mike

            We’ve already established you lack the credentials to critique the mental hygiene of others.

            You just call your detractors mental case, kook, nut-jobs and cultists in an effort to instigate fights and lower the respectability of comment threads like this one and bitcoin users in general. You do this because you are counter-agent and provocateur.

          • Milly Bitcoin

            Anyone can look at your comment history. For one, you claim to have knowledge what the financial contortion is doing an you have this conspiracy theory that you clearly just repeated from cultists on reddit. You have no clue what those companies are planning yet you make all kind of accusations. In actuality you are pilot who has no knowledge whatsoever about what those companies are doing or any kind of “conspiracy.” You have no credentials and you have no idea other than what you read from other cultists in your circle jerks. You are the “joe sixpack” of Bitcoin.

          • Mike

            Your childish insults only confirm that you are what I say you are.

          • Milly Bitcoin

            let’s see one of your quotes:

            “The consortium of 40+ banks (known as R3cev) which aims to do just that will inevitably develop something which: is permissioned (for users and developers like the apple app store), privatized, has fees, will not be entirely transparent to everyone, will not be open-source, it will definitely be inflationary to accommodate monetary policy of debasement and fractional reserve schemes, it will facilitate negative interest rates, central control of accounts for suspension/freezing of funds, bail-ins, bail outs, capital controls and transactions will include the identity of both sender and receiver and store that information in a centralized location for the convenience of hackers.”
            Your comment speaks for itself. Anyone can see you are idiot from that sentence alone.

          • Mike

            I’m not even remotely bothered that you quote that here.

            In fact, I’m very pleased.

            For everyone too busy to find the context that quote was in regards to someone urging the core developers to rush out a block size increase before some national crypto currency “with all the same features” as Bitcoin supplants it. LOL.

          • Milly Bitcoin

            The point is you have no clue what the financial industry is doing and you just made up stuff because you read it on a Bitcoin circle jerk. These statements get you Reddit points but most normal people will look at you like you are some kind of nut. This is one of the biggest complaints about Bitcoin that I hear and when they talk about claims like you made they just roll their eyes. You have no clue because all you do interact with other circle jerkers and make fun of the rest of the world. You are like teenagers who hang at the mall who have no jobs, make fun of people going to work, just create nuisance and drive the normal customers away. Have you taken that free online Princeton class yet? Those professors know what they are talking about and you don’t.

          • Mike

            Why yes Milly, I’ve enrolled in the course through Coursera.

            Meanwhile, if any of my points regarding R3 are provably wrong then prove them wrong. If you can’t, then maybe my predictions are not improbable.

          • Milly Bitcoin

            You made the assertion that you knew what those financial institutions are doing. You have no idea what they are doing so now you want to play word games. You cultists are all the same …. ignorant.

          • Mike

            Laughably, cultists like me, who lack your supposed Princeton education show less ignorance than you, with your “The blockchain only contains Bitcoin transactions..” comment at the top of this page.

            Seems your appeal to authority is just that, an appeal, with no actual authority.

            You ignorant fraud.

          • Milly Bitcoin

            I went to Rutgers. Gavin went to Princeton. Gavin usually makes sense, go look at his videos and interviews. It will take several hours to go through them all as he has a few extended interviews. I generally agree with his perspective about Bitcoin. Also look at Tim Swanson’s videos. Along with the Princeton class you then get some sort of idea what is going on.

          • Mike

            What is going on is you are a fraud, and you spread misinformation.

          • Milly Bitcoin

            Yes, me, Gavin and Tim Swanson are all paid by the banks to spread misinformation and destroy Bitcoin. lol

          • Mike

            Don’t hide behind others. YOU spread misinformation.

            And you’ve actually said: “I am a bank employee sent to destroy Bitcoin.”

            I know you’d like everyone to believe you were just being sarcastic, but considering your typical comments I’d say you were actually being ironic.

          • Milly Bitcoin

            My resume is on the web. I am a retired federal employee and I made enough mining Bitcoin so I don’t have to work for anyone else. I am the one who got the ruling from FinCEN that US Bitcoin miners didn’t have to register as money transmitters. I am also the one who filed legal action to have the bogus BITCOIN trademark cancelled at the US Patent and Trademark Office. My credentials speak for themselves … just like your comments.

          • Mike

            Credentials are meaningless if you are unable to offer accurate advice and information.

            I’ve pointed out several instances of you spreading misinformation in the last week alone. You’ve successfully defended against none of those challenges.

            Credentials like being a core developer for Bitcoin did not stop Mike Hearn from going to work for banks and publishing a lengthily screed
            full of lies in the process.

            If you want to convince people you are not on a mission to destroy Bitcoin you need to clean up your Milly Bitcoin act with radical changes.

            First, stop instigating fights and lowering the respectability of comment threads and the commenters with immature ad-hock name calling and insults. That includes all your favourites: cultist nut-jobs, mentally ill fools, circle jerking kooks. etc.

            Second, make an actual effort to gather and disperse accurate information. Everyone knows Satoshi put a message in the Genesis block which disproves the very first comment in this thread, which is yours.

            Third, be the promoter of Bitcoin you say you are. Stop downplaying positive facts and inventing non-existent problems such as “retailers have to comply with data collection requirements so they would have to collect data and link it to the Bitcoin transaction since that is pseudonymous. That is expensive and error prone..” Likewise, implying all BTM’s “have glitches” exaggerating fees by 2x-4x, and suggesting they are only necessary for cryptolocker victims is counter productive. Billions of people don’t have bank accounts because they don’t have the required identity documents to open one. You would have those people use Local Bitcoins (which you say is “dangerous, unreliable, and has high fees”, since online exchanges will only say “papers please”. If you can’t be a promoter then don’t be a de-moter.

            Fourth, stop hiding behind your credentials as though they excuse you from being reasonable and responsible. Discuss comments based on the merit of the comments themselves instead of asking do you have a PHD in that? Be respectful and considerate of other people. It’s churlish to dismiss everyone who disagrees with you as “teenagers who has never run a business, hang out at malls, have no experience and limited education”. They may or may not be such things but your credentials do not automatically make you superior.

          • Milly Bitcoin

            My messages are not aimed at people like you. You are an ignorant cultist and you won’t listen to anything rational. You are exactly like religious fundamentalist except you latched onto Bitcoin. You have no credentials so you come up with weird excuses to dismiss all the people with credentials. Bye.

          • Mike

            Yes, how irrational of me to dismiss people with credentials unless they offer accurate information.

          • Milly Bitcoin

            yes, Gavin, Tim Swanson, and the profs over at Princeton U. have no clue. I am glad Bitcoin has a guy like you that can clear everything up.

          • Mike

            I think Gavin, Tim Swanson, and the profs over at Princeton U. have no clue that you are hiding behind them after getting caught spreading misinformation.

          • Milly Bitcoin

            I am referring you to sources of Bitcoin education. I should have referred you to a psychiatrist.

          • Mike

            You need some new insults.

          • Gooseling

            I can state that Milly knows much more about Digital currencies than i do.

            No one can bring down the digital coin industry from outside. It is only those within the industry who cause damage to it by intentional fraud.and misrepresentation till everyone knows about it then it will resolve..

          • Mike

            You are exactly right and I urge you to read the article: “I’m a Former Green Beret and Here’s How I Would Bring Down Bitcoin” at bitcoinmagazine.

            Then come back and re-read all the comments on this page.

          • Gooseling

            I read your article when you published it. Fair amount of sense in it to educate people in the subject.
            Perhaps a follow up on how people are simply duplicating the banking system and degrading blockchain purpose and Tech, will be of great value

            Keep going Mike

  • Gooseling

    While appreciating the attempt to present the blockchain do note that the. blockchain is an ongoing record of transactions that is locked into a ledger at fixed intervals.

    A bllockchain can be either decentralized (distributed) or centralized.

    The reason for a decentralized blockchain is to prevent points of corruption and items such as double spend.

    A centralized blockchain even if based on the best available distributed/decentralized blockchain has had a negative effect on the development of digital transactions as shown multiple times in Mtgox and Cryptsy and many more, and will repeat till the weakness is understood by users.

    To me Centralized blockchain use shows malefeada intent by the party using it in a system. It corrupts the real intent of the digital coin industry.

    Please note Satoshies blockchain is to ensure the system on a zero trust platform. Why do we keep going back to the trust system?

    Please accept that partial information is causes distress and requires correction.

  • Expanse <3

    Blockchain is the only wallet provider with a complete experience. You can access your funds on-the-go with your iOS and Android wallets.