Blockchains and Digital Ledgers: Revolutionary?

Blockchain: What is it?

Within the past decade, Blockchains have taken the world by storm. But what are they? Well, in simple terms, a blockchain is a type of digital ledger that stores and shares data in a secure and transparent way. Why is it called a Blockchain? The name "Blockchain" comes from the fact that data recorded within a certain ecosystem is grouped together into blocks. People who use the blockchains (for example, trading NFTs on ETH or buying goods with BTC) contribute to these blocks of data.  This block of data is then verified by the respective communities, and once verified, the community then time stamps each block of data and lastly broadcasts this Block of data to its respective ecosystem by connecting each new block to the previously verified and timestamped block of data… Creating a chain of blocks that stores all of the transactional data that is open and visible to anyone with an internet connection.

Distributed Ledger: What is that?

Now that we know the basics of how a blockchain works, next, we must understand distributed ledgers. As previously stated, a Blockchain is a “series” or chain of blocks that contain data from within a certain ecosystem… But for these blocks of data to remain valuable, this data has to be publicly stored by a very large amount participants so that the Blockchain remains transparent and immutable (unable to change through time) as it is the source of truth for all of the users transacting within a blockchains ecosystem. So who stores this blockchain of data? While the mechanics of who stores this data depends on the ecosystem, we will stick with the structure of Ethereum and Bitcoin. Both Ethereum and Bitcoin rely on users to run Nodes, to store this data. Simply put, Nodes are computers that continually receive and store each new block of data. To run a node, a user simply needs a computer with enough storage capacity to download and store all of the historical and future data within a blockchain. While more and more people run Nodes, this data becomes “distributed”, or stored across a very large number of devices, making this data more secure, more accessible, and more transparent to the respective blockchain community. While the above states the structure around the “distributed” definition of the blockchain. It vaguely hints as to what a ledger actually is. In short, a ledger can be defined as a record-keeping system that tracks the transactional activity and maintains a permanent and chronological record of all transactional activity within a certain ecosystem… So all of the data stored within the blockchain acts as a ledger. As each ledger will maintain its own independent transactional data that means there are multiple types of ledgers. Depending on the types of transactions recorded on the blockchain, will determine the type of ledger, and is actually the foundational difference between Ethereum and Bitcoin… and stay tuned, as our next newsletter will cover the foundational differences between Ethereum and Bitcoin.

Sponsored by Bitcoin Sock Club

Blockchain: What is it?

Within the past decade, Blockchains have taken the world by storm. But what are they? Well, in simple terms, a blockchain is a type of digital ledger that stores and shares data in a secure and transparent way. Why is it called a Blockchain? The name "Blockchain" comes from the fact that data recorded within a certain ecosystem is grouped together into blocks. People who use the blockchains (for example, trading NFTs on ETH or buying goods with BTC) contribute to these blocks of data.  This block of data is then verified by the respective communities, and once verified, the community then time stamps each block of data and lastly broadcasts this Block of data to its respective ecosystem by connecting each new block to the previously verified and timestamped block of data… Creating a chain of blocks that stores all of the transactional data that is open and visible to anyone with an internet connection.

Distributed Ledger: What is that?

Now that we know the basics of how a blockchain works, next, we must understand distributed ledgers. As previously stated, a Blockchain is a “series” or chain of blocks that contain data from within a certain ecosystem… But for these blocks of data to remain valuable, this data has to be publicly stored by a very large amount participants so that the Blockchain remains transparent and immutable (unable to change through time) as it is the source of truth for all of the users transacting within a blockchains ecosystem. So who stores this blockchain of data? While the mechanics of who stores this data depends on the ecosystem, we will stick with the structure of Ethereum and Bitcoin. Both Ethereum and Bitcoin rely on users to run Nodes, to store this data. Simply put, Nodes are computers that continually receive and store each new block of data. To run a node, a user simply needs a computer with enough storage capacity to download and store all of the historical and future data within a blockchain. While more and more people run Nodes, this data becomes “distributed”, or stored across a very large number of devices, making this data more secure, more accessible, and more transparent to the respective blockchain community. While the above states the structure around the “distributed” definition of the blockchain. It vaguely hints as to what a ledger actually is. In short, a ledger can be defined as a record-keeping system that tracks the transactional activity and maintains a permanent and chronological record of all transactional activity within a certain ecosystem… So all of the data stored within the blockchain acts as a ledger. As each ledger will maintain its own independent transactional data that means there are multiple types of ledgers. Depending on the types of transactions recorded on the blockchain, will determine the type of ledger, and is actually the foundational difference between Ethereum and Bitcoin… and stay tuned, as our next newsletter will cover the foundational differences between Ethereum and Bitcoin.

Sponsored by Bitcoin Sock Club