What is Blockchain? (Explainer) | The Big Story | Real Vision™

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Blockchain Explainer | The Big Story | Real Vision™

Transcript:
So what exactly is a blockchain? Blockchain is a distributed database that stores information in blocks, what you can think of as a kind of virtual container for data. As new data gets added, additional blocks are created. The blocks are then linked together chronologically to form a sequence of blocks called a chain. As new information gets added, the chains get longer. This method of data storage is called nondestructive, meaning old data never gets erased or overwritten because the previous blocks in the chain remain unchanged. Each new block that is written contains something called a cryptographic hash, a small mathematical fingerprint of the blocks that came before it in the chain, making it extremely difficult to tamper with the data that resides inside the blocks.
One of the things that makes blockchain so powerful is its distributed nature. Distributed in this case means that data isn't just stored in one centralized database controlled by a single account or administrator, but across a wide-ranging network of computers called nodes. In fact, the capacity for global networking itself is the very core of how blockchain works. Modern distributed computer networks began in the late 1960s with ARPANET, a precursor of the modern internet, which connected computers at research universities out West. But peer-to-peer networks, which power block train's communication and are so central to its functionality, are a much more recent invention. The first well-known peer-to-peer network was Napster, which appeared in the late 1990s. Napster-- as you probably remember-- allowed users to share music files between their personal computers. Each node-- or independent computer on the network-- has the ability to share data with all of the others without being coordinated by a central computer.
To continue with the music metaphor, peer-to-peer networks that power blockchain are like an orchestra without a conductor. Each node is a musician listening to a vast symphony and playing its own music by ear. Okay, so now we know that block chains organize data in blocks, and we know that blockchains can use peer-to-peer networks to distribute and store data all over the world. But how does the blockchain know which nodes have accurate information? In other words, how does blockchain know what data is authentic? If any node can modify the chain, what's to stop a malicious node from trying to fool the rest of the network for its own advantage. That's a problem called consensus; which is really about maintaining agreement on a network. Consensus, as it turns out, is a very old kind of challenge, which mathematicians and computer scientists call the Byzantine General's Problem. What's an ancient general got to do with blockchain? Well, sending out messages between multiple parties and making sure they are valid is a problem that people have been struggling with for thousands of years. Imagine you want to send out a message to your army that says "Attack at Dawn", but your message is intercepted and replaced by your enemy with a counterfeit message that reads "Retreat at Dawn". If that happens you've got a serious problem on your hands. On the battle field and in finance, there are a lot of ways things can go wrong. But here's the headline: blockchain claims to have solved the Byzantine Generals Problem using unique properties of high speed computer networks and massive number crunching power.

[NuggetsNews]

Great to see you guys covering blockchain more :)

[AndyInLearning]

One of the best simple explanation of blockchain on youtube.

[jakeo]

It amazes me how many people here try to explain the works of Shakespear to someone who doesn't know the alphabet.

Distributed database available to everyone. What the hell does that mean? Is it available to me? Where do I go to see this distributed database?

By the way. I liked the cartoon, pictures of boxes linked to each other with chains. Cute.

[kaiziel]

So is it possible that they will create a public profile like a passport+resume+digital RDF or such to identify all movements made on the blockchain permanently? If ever blockchain becomes the centralised global network that is.

[tmgd]

Amazing technology. Not money though.