What exactly is blockchain?

Maybe you've heard about the word blockchain but still don't quite understand what it really is, because of its seeming technicality or just because of the words used to describe it.

I was once like that up until early this year and I get it.

The misconceptions and misunderstandings about what blockchain is about make it even worse.

I remember when I first stumbled upon blockchain in 2020 during the lockdown. I read a whole piece but still didn't get what it was about.

Fast forward to 2021 when I saw it in someone's LinkedIn bio, I hopped on Google and read about the ecosystem, but there were some technical industry terms that I couldn't understand.

Having invested months to study the ecosystem, I've taken time to write this simplified piece, explaining those technical terms in a very short and simple way to help you understand.

We'll learn about WHAT blockchain is and what it isn't, HOW it works, and WHY you should care about this revolutionary technology that is here to stay.

To keep it short and simple, we're going to learn this in 3 parts. So today, we'll take the first part which is, What blockchain is and what blockchain isn't.

What is blockchain?

This has been my most asked question recently, and I hope this detailed and simplified answer settles it. Now, let's get right into it.

Just like the traditional or regular spreadsheet/database/ledger that is used to store data, blockchain is used to store data too, just that this one is digital i.e saved online with other unique features.

In this light, You can think of it as a digital spreadsheet where verified data are stored permanently.

Blockchain is a digital, decentralized, distributed ledger or database.

The big words again huh? Let's break it down because that's the real essence of this writing.

Digital, means it's hosted online and can be viewed by anyone but can't be altered.

Decentralized, which means no one person has absolute control over it. There's no central authority controlling it. Blockchain eliminates the need for mediating autonomous third parties.

By distributed, it means the database is shared across several nodes. Think of nodes as participants in the blockchain network. So when data is added to the blockchain, it is shared simultaneously with each member of the network such that every member has a copy of every transaction/data saved.

A unique feature of the blockchain is that the data stored in the blockchain cannot be erased or deleted. What that means is that an individual cannot wake up and delete data or even change data on the blockchain.

How is this possible?

Aside from the fact that every data is shared across the member network, EVERY data stored in the blockchain is cryptographically secured.

Cryptographic keys are special keys used in securing digital data or information that only the sender and recipient have access to. This makes it hard for a third party to make changes in the data because they don't know the cryptographic keys.

So, it is right to state that the blockchain is a technology that is used to store data in a very secure way and makes it nearly impossible to change. Gbam. That is what it is.

Now, what is not a blockchain? What are some of the misconceptions about blockchain?

A lot of people refer to cryptocurrencies as blockchain.

I've heard this several times, maybe you have said it too, I used to, but the truth is, they are not.

Bitcoin isn't blockchain.

Ethereum isn't blockchain.

Every other cryptocurrency you know isn't blockchain.

Also, NFT isn't blockchain.

Bitcoin, Ethereum, NFTs, and every other cryptocurrency are only an implementation of the blockchain. They leverage the blockchain to deliver virtual currency/virtual identity as the case may be. Blockchain is the powerhouse that keeps all of them running. It is their engine.

Think of them as the fruits while blockchain is the tree. So Cryptocurrencies aren't blockchain, but they are powered by blockchain.

Blockchain can be programmed to record and store anything of value. It is not just a technology that is for payments but can be used to store other things like certificates (birth, school), deeds, and licences. Blockchain can also be used to record medical procedures, insurance claims etc.

It is not limited to transactions alone. There's a lot more that is possible with blockchain technology.

In conclusion, I know there have been many complicated explanations about blockchain out there. But the simplest way to understand this technology is by thinking of it as a database.

I always like to see it as a database with 3 essential Ds; Digital, Decentralized and Distributed with an immutable feature.

In the next writing, we'll learn about how blockchain works and some of the things that are possible with the blockchain.

P/S: I hope you now understand and will be able to tell someone at least one factual thing about blockchain.

If you do, then the purpose of this writing is achieved.

I will love to read your thoughts in the comment section.

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