What is a Blockchain?
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A blockchain is a distributed, cryptographically-secure database structure that allows network participants to establish a trusted and immutable record of transactional data without the need for intermediaries. In simple terms, it is a database that is not stored centrally with one person, but rather distributed across several people’s systems. A blockchain can execute a variety of functions beyond transaction settlement, such as smart contracts. Smart contracts are digital agreements that are embedded in code and that can have limitless formats and conditions. Blockchains have proven themselves as superior solutions for securely coordinating data, but they are capable of much more, including tokenization, incentive design, attack-resistance, and reducing counterparty risk. So, now, you may ask how do they decide whether the records entering a blockchain is true/right or not? Because our blockchains deal with financial information, it is crucial that they get it right. Most blockchains have a consensus mechanism which they use to get it right. Bitcoin has proof-of-work, where miners have to solve complex mathematical puzzles in order to qualify in approving a transaction. Solana has proof-of-history and proof-of-stake. Almost all blockchains have a consensus mechanism, which is a way in which all participants agree that the information in a blockchain is true and valid.
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