In January 2022, I did a 30-day project on “Why Your Business Needs to Adapt to Blockchain”. This post is a part of it. To know what I covered, learned, and executed in the project, visit this page.

It is a difficult question to answer. Let me attempt.

Blockchain is a decentralized, immutable ledger that exists across a network. Moreover, this database is cryptographically secure.

Now, what does all of that mean?

Firstly, a blockchain is a chain of blocks. A block stores information. So essentially, blockchain is a database.

Secondly, blockchain is a ledger or a collection of records. Hence, the information stored in a block is mostly a list of transactions. While Bitcoin’s blockchain only stores transactions, other blockchains such as Ethereum may store other information (such as smart contracts) that allow more to be done on their network.

Now that I have mentioned blockchain as a network and a database, I will come to the ‘decentralized’ part of the definition. A decentralized network stores data across multiple nodes instead of one single entity, i.e., no central server stores the data. The nodes are connected and provide the computational power. Because of the lack of a central authority, no single node can edit the data stored in the database. This feature explains the immutable nature of blockchain.

Let us go back to the ‘chain’ in the blockchain. A single block can only record a limited number of transactions. So, we have to keep adding more blocks. Once a block is full of the transactions, we add them to the network. How do we add a block to a network? We do something called mining them. Mining is the process of verifying each transaction before adding them to the blockchain. The nodes in the network verify the transactions by performing complicated calculations. These calculations require a lot of computing power. The nodes are rewarded for validating the transactions with the native token (for example, Bitcoin).