Blockchain: A Brief Introduction

As Bitcoin becomes more and more mainstream and its value continues to soar, you might ask yourself how exactly does blockchain, the technology behind the cryptocurrency, work?

In essence, blockchain is a decentralized, fully transparent, and immutable ledger of transactions.

Fully Transparent

One of the most important features that blockchain has to offer is its full transparency. This means that if any data is altered in any way in the blockchain, the users of that blockchain would be able to see the changes that were recorded. How can this be useful in real life? In the rare event that a Bitcoin were able to be stolen in an online exchange, that Bitcoin would be able to be easily traced as soon as it is spent or changes locations.

Blockchain vs. Cloud Computing

The decentralized nature of blockchain is another reason why the technology has become so increasingly popular. To better conceptualize this aspect of blockchain, let’s first consider cloud computing.

Technologies that use cloud computing such as Google Drive have completely revolutionized the way we access information. We can now access files at the touch of a button no matter our location assuming we have an internet connection. But where is this information stored? This is the aspect of cloud computing that makes it centralized. All this information that we access is stored in server farms, which are essentially massive warehouses of servers. These server farms are often outsourced and as a result, the physical storage of your data is often more vulnerable than many people realize.

Blockchain’s decentralized nature is why the technology is referred to by many as “Cloud 2.0.” Why? Because blockchain renders the storage requirements of cloud computing completely obsolete. As opposed to having massive amounts of data stored in a server farm like cloud computing, the information stored in a blockchain is stored in many different computers and servers in many different locations. This makes hacking into a blockchain exponentially more difficult than hacking into a cloud’s server farm.

Immutability

Finally, the immutability of a block