Overview
Distributed ledger technology— DLT —also known as blockchains power or utilize cryptocurrencies.
Blocks and Chains?
A blockchain is a digital ledger maintaining these transactions for perpetuity— or until the blockchain ceases to exist. These inputs can range from financial transactions to content publishing. Information encrypted to a public blockchain is nearly uncensorable.
There are two types of blockchains.
Enterprise or Corporate/Private Chains
Public or Open/General Purpose Chains
There is no physical chain and blocks are numbered entries
Transactions on a blockchain are distributed and broadcasted to the entire network. The network is a system of interconnected computers similar to the internet. A key difference being the operational layer. Data is encrypted by employing sturdy cryptographic principles.
A cluster of computers known as miners maintain the network. They process the transactions and gather them together in 'blocks' which are then propagated throughout the network and 'chained' together; creating a history of inputs on a publicly available ledger.
It is constantly growing as 'completed' blocks are added to it with a new set of inputs. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Blocks are added sequentially. So, it becomes increasingly difficult to modify the data chained together.
Each block contains a reference to the previous one and they are reinforced by each other as time goes on. This makes it nearly impossible to adjust the previous blocks without adjusting the entire chain until that point.
In order to understand how blockchain technology works in a public way, there are a few topics that need to be covered first.
Open-source vs Proprietary software
Economics (Covered later)
Centralization vs Decentralization
Governance systems
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