Blockchain is a digital technology that allows people to make secure transactions without the need for a middleman. Imagine a group of people sitting around a table, and each person has a notebook that contains a record of all the transactions they’ve made with each other. Every time someone wants to make a new transaction, they write it down in their notebook, and everyone at the table can see it.
Now, imagine that instead of notebooks, everyone has a computer, and they’re all connected to each other over the internet. Whenever someone makes a transaction, instead of writing it down in their own notebook, they send it to everyone else’s computer, and everyone adds it to their own copy of the ledger.
This creates a chain of blocks, hence the name “blockchain”. Each block contains a set of transactions, and is linked to the previous block in the chain. Once a block is added to the chain, it can’t be changed, because any attempt to alter a block would require changing every subsequent block in the chain. This makes the blockchain an extremely secure and tamper-proof way of recording transactions.
For example, imagine you want to send some money to a friend in another country. Instead of going through a bank or a money transfer service, you could use a blockchain-based system like Bitcoin. You would initiate the transaction by sending a message to the blockchain network, which would then verify your identity and ensure that you have the necessary funds to make the transfer. Once the transaction is approved, it would be added to the blockchain, and your friend would be able to see the funds in their own digital wallet almost instantly.
Blockchain is a powerful technology that has the potential to change the way we conduct transactions and share data. While it may seem complex at first, the basic idea is simple: a decentralized ledger that allows for secure and transparent transactions without the need for a middleman.