Think of it as a digital ledger distributed across many computers worldwide instead of being stored in one place. This Distributed Ledger Technology means that no single entity is controlling the data, making it decentralized, secure and transparent.

Okay, let me break it down with the Microsoft Word vs. Google Docs analogy:

• A traditional bank’s ledger is like Microsoft Word, and only one person can edit at a time and it is not necessarily transparent or accessible to everyone in real-time.

• The blockchain on the other hand is like Google Docs, meaning everyone with access or network participants can see the same document in real time, and changes are instantly updated for everyone.

A block is basically a container of data that stores information. It would usually contain:
🔹 Transaction details
🔹 Timestamp
🔹 Hash of the previous block

When blocks are connected to each other in chronological order, the form a Chain. (Block-Chain…get it?? 💡)

Like I mentioned earlier, a distributed ledger stores data across different nodes around the world. This helps to prevent hacking or data manipulation.

As we now know, there is no central authority in blockchain, so the nodes agree on a transaction before adding it to the blockchain. Now this “agreement,” is done via various methods, and the two common ones include:

• Proof of Work (PoW):
  This is used by Bitcoin, and miners solve complex puzzles to validate transactions.

• Proof of Stake (PoS):
  This is used by Ethereum. With PoS, validators stake/lock their coins to validate transactions.

Hashing transforms any input into a fixed-length code or string of characters. Think of it as a unique fingerprint for the inputted data, so any little alteration will cause a change in the hash.

For example, if we use a hash function on the word “Blockchain”, even a slight change such as changing “B” to “b” will return a different result as seen below:

SHA-256("Blockchain") →  6dcd4ce23d88e2ee956f9f79cffb42a4b2a2863a945b2446b8c2b5e23b3e7e77

SHA-256("blockchain") →  d7a8fbb307d7809469a78d6e02e37f8283a4d126ec29d72ed367e742e6513068

(…more on hashing later)

Let’s say you want to send me 1 Bitcoin (I really don’t mind in real life), here’s what happens on the backend;

• Step 1: Transaction initiation
  First, you initiate a transaction request using your crypto wallet, and you input my wallet address.

• Step 2: Broadcasting to the node network
  The peer-to-peer (p2p) network of nodes receive your transaction and validates it. (remember consensus?)

• Step 3: Block creation
  After validation, your transaction is linked to the previous block using the cryptographic hash.

• Step 4: Transaction complete
  Now that this transaction is added to the blockchain and cannot be altered, I now own 1 Bitcoin.

• Cryptocurrency
  The most popular use-case of the blockchain is cryptocurrency, and I have pretty much explained how it works in the previous section.

• Smart Contracts
  These are self-executing contracts requiring no middle-man. Think of it like a digital vending machine (…more on smart contracts later, so subscribe if you haven’t!)

• Supply Chain Tracking
  To prevent fraudulent activity, companies now use the blockchain to track their products from manufacturing to delivery.

• DeFi & NFTs
  The blockchain is changing finance and ownership, by removing entities like banks out the way with Decentralized Finances, and letting you own digital assets as Non-Fungible Tokens.

That being said, the blockchain is much more than crypto and is a revolutionary technology with more applications.

If you’re excited to learn more about Web3 & Decentralization in a simplified way, please hit the SUBSCRIBE button!

Thanks for reading. My name is Timi Lawani — I am a Data Analyst & Tech Content Creator passionate about simplifying Web3 and technical concepts.

You can connect with me on LinkedIn and via Email; I would love to hear from you!

Think of it as a digital ledger distributed across many computers worldwide instead of being stored in one place. This Distributed Ledger Technology means that no single entity is controlling the data, making it decentralized, secure and transparent.

Okay, let me break it down with the Microsoft Word vs. Google Docs analogy:

• A traditional bank’s ledger is like Microsoft Word, and only one person can edit at a time and it is not necessarily transparent or accessible to everyone in real-time.

• The blockchain on the other hand is like Google Docs, meaning everyone with access or network participants can see the same document in real time, and changes are instantly updated for everyone.

A block is basically a container of data that stores information. It would usually contain:
🔹 Transaction details
🔹 Timestamp
🔹 Hash of the previous block

When blocks are connected to each other in chronological order, the form a Chain. (Block-Chain…get it?? 💡)

Like I mentioned earlier, a distributed ledger stores data across different nodes around the world. This helps to prevent hacking or data manipulation.

As we now know, there is no central authority in blockchain, so the nodes agree on a transaction before adding it to the blockchain. Now this “agreement,” is done via various methods, and the two common ones include:

• Proof of Work (PoW):
  This is used by Bitcoin, and miners solve complex puzzles to validate transactions.

• Proof of Stake (PoS):
  This is used by Ethereum. With PoS, validators stake/lock their coins to validate transactions.

Hashing transforms any input into a fixed-length code or string of characters. Think of it as a unique fingerprint for the inputted data, so any little alteration will cause a change in the hash.

For example, if we use a hash function on the word “Blockchain”, even a slight change such as changing “B” to “b” will return a different result as seen below:

SHA-256("Blockchain") →  6dcd4ce23d88e2ee956f9f79cffb42a4b2a2863a945b2446b8c2b5e23b3e7e77

SHA-256("blockchain") →  d7a8fbb307d7809469a78d6e02e37f8283a4d126ec29d72ed367e742e6513068

(…more on hashing later)

Let’s say you want to send me 1 Bitcoin (I really don’t mind in real life), here’s what happens on the backend;

• Step 1: Transaction initiation
  First, you initiate a transaction request using your crypto wallet, and you input my wallet address.

• Step 2: Broadcasting to the node network
  The peer-to-peer (p2p) network of nodes receive your transaction and validates it. (remember consensus?)

• Step 3: Block creation
  After validation, your transaction is linked to the previous block using the cryptographic hash.

• Step 4: Transaction complete
  Now that this transaction is added to the blockchain and cannot be altered, I now own 1 Bitcoin.

• Cryptocurrency
  The most popular use-case of the blockchain is cryptocurrency, and I have pretty much explained how it works in the previous section.

• Smart Contracts
  These are self-executing contracts requiring no middle-man. Think of it like a digital vending machine (…more on smart contracts later, so subscribe if you haven’t!)

• Supply Chain Tracking
  To prevent fraudulent activity, companies now use the blockchain to track their products from manufacturing to delivery.

• DeFi & NFTs
  The blockchain is changing finance and ownership, by removing entities like banks out the way with Decentralized Finances, and letting you own digital assets as Non-Fungible Tokens.

That being said, the blockchain is much more than crypto and is a revolutionary technology with more applications.

If you’re excited to learn more about Web3 & Decentralization in a simplified way, please hit the SUBSCRIBE button!

Thanks for reading. My name is Timi Lawani — I am a Data Analyst & Tech Content Creator passionate about simplifying Web3 and technical concepts.

You can connect with me on LinkedIn and via Email; I would love to hear from you!