Blockchain is an integral part of our future, but it’s also intimidating for those who are still getting to know the technology. It has come to our attention at MacguyverTech that there is decidedly an audience for a more basic approach to Blockchain, cryptocurrency, the Metaverse, Web 3.0, and related topics.
To that end, we’re starting a new “Back to Basics” series that will hopefully be of use to our readers, and “Blockchain Explained” is our first. Keep in mind that what we’re presenting isn’t unlearnable; it only requires patience. At one point, everyone was a beginner.
Part One: Where Do These Blockchains Come From?
This is the first part that often gets overlooked when explaining Blockchain. It’s great to explain to someone what a Blockchain is and how it’s useful, but we need to back up a step first.
Once the most basic chain of data blocks is created, it is then introduced to a peer-to-peer network. Which network it resides on is determined by the programming language used.
Part Two: What Is a Peer-to-Peer Network?
This is the missing part that made the author of this article go “AHA!” (Alas, this discovery was only witnessed by his dog, to minimal fanfare.) A peer-to-peer (p2p) network is made up of many users; each of these users are “nodes” to help share data. The network itself is thereby decentralized. As a community run network, there’s simply no central mainframe to fail.
If you would like a basic comparison, think of Napster. Remember that program that allowed everyone to share their MP3s online, and made Metallica’s James Hetfield completely lose his mind? The Napster network was made up of millions of users, all of whom were dead set on downloading a bootleg version of “Disappear.” Their computers acted as nodes, seeding to and leeching from the Napster network.
This works similarly to a blockchain network. Once a blockchain is on a p2p network, each of the nodes shares data about said blockchain. From that point forward, any data exchange on the network is verified by the nodes, and a new block of information is added to the chain. The blockchain is now considered a ledger. This ledger can be added to, but not changed in any other way.
Part Three: What Do These Blockchains on P2P Networks Do?
Clearly, they make James Hetfield rich. Metallica is worth nearly a billion dollars today.
In all seriousness, Blockchain technology can be used for almost any transaction of information in an unalterable, permanent, decentralized way. Medical records, currency, real estate, vehicles, supply chains, legal records, taxes…literally anything that involves data exchange can be put into a blockchain.
Point Four: Why Is This Important?
It’s important for multiple reasons. First, blockchain technology makes it much more difficult, if not impossible, for fraudulent transactions to occur. Blockchain transactions must be approved by the network they reside on.
Remember that kid who was head-banging to “Disappear” in 2000? Today, he might be a bit more concerned about title fraud, and someone selling his $1.5mm shore house out from under him. With a blockchain record, that can’t happen anymore. It’s perfectly evident who owns a house, when it was sold, and to whom it was sold.
Second (and related to the above point), you own your information. Worried about fraud? You can protect your information with what is known as a Decentralized Identifier (DID). This allows one to share their information specifically with whom they choose.
Keep in mind, not all blockchain networks are public. There are private blockchains, public blockchains, and hybrid blockchains. Regardless of whether these networks are open to public scrutiny, the blockchains on them are still immutable.
Finally, these transactions, by their definition, are decentralized. In other words, there is no broker, agent, or official required. Yes, this is a contentious point, and one that has no easy solution.
In a sentence, “A Blockchain is a community-governed, ever-growing chain of data blocks with an immutable history that exists on a p2p network” Hopefully this article translated that into something coherent.
As an aside, it appears that even James Hetfield is embracing blockchain. No, really. You can buy an NFT of him here.
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