Key Takeaways
- Decentralization: No single server holds the data. It is copied across thousands of nodes.
- Immutability: Once data is written, it cannot be deleted or changed.
- The "Chain": Each block contains the "Fingerprint" (Hash) of the previous block. Changing one block breaks the chain.
- Consensus: Proof of Work (Mining) or Proof of Stake determines who gets to add the next block.
Imagine a Google Doc that everyone can read, but no one can delete, and you can only add a line if a million other people agree that your line is valid. That is a Blockchain.
The Problem: The "Double Spend"
In the digital world, copying a file is easy. If I send you an MP3, I still have the MP3.
Money cannot work like that. If I send you $10, I must lose $10. Before blockchain, we needed banks to keep a ledger and ensure I didn't spend the same money twice. Blockchain solves this without the bank.
How blocks are linked (Hashing)
A blockchain is a linked list. Each block contains:
- Data: (e.g., "Alice sent Bob 5 BTC")
- Hash: A unique ID for this block (like `0000abc...`)
- Previous Hash: The ID of the block before it.
If a hacker tries to change the data in Block 50, the Hash of Block 50 changes. Block 51 sees that the "Previous Hash" doesn't match anymore. The chain is broken, and the network rejects the change.
Smart Contracts
Modern blockchains like Ethereum go beyond money. They store Smart Contracts: self-executing code.
"If Node A receives 5 ETH, automatically send the deed to the House NFT to Node A."
This replaces lawyers and escrow agents.
Uses beyond Crypto
- Supply Chain: Tracking a bag of coffee from the farm to the cup to prove it's Fair Trade.
- Voting: Creating un-hackable voting records.
- Medical Records: Giving patients control over who sees their history.
Frequently Asked Questions (FAQ)
The future is decentralized.
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