A blockchain is a distributed and immutable database of orderly linked blocks containing encrypted data. Each block has a fixed length of memory and a new one must be created when the previous one’s memory limit is reached. For a block to be added to the chain it must first be validated and verified by the network and then added to the end of the existing blocks. Contrary to the CRUD (Create, Read Update and Delete) function of traditional web applications, there are only two operations on the blockchain: Create block and View Block. That is, to be able to add data to a block and view that data.

The basic process of record entry on a blockchain can be broken down as follows:

• Add new immutable data into blocks.
• Cryptographically verify and validate data in the block.
• Attach the new block at the end of existing blocks.

Once inserted, the block on the chain can’t be modified singularly nor retroactively (effecting change in data from a date in the past). This is because, by design, the blockchain is designed to be tamper-proof.

Through the use of peer-to-peer (p2p) networking and a time-stamping system, the blockchain system can run autonomously.

In a business transaction context, the blockchain is an open, distributed and immutable ledger that can record verifiable business transactions.

A transaction flow occurring on the blockchain would look like this:

• Jane and John wish to conduct a business transaction.
• Cryptographic keys are created for the interaction between both Jane and John.
• Interaction is broadcasted and verified by a distributed network.
• Block is added to the chain once verified.
• Transaction between Jane and John is complete.

The ledger can be programmed to trigger transactions automatically without the help of an intermediary or 3rd party.

Because Blockchains are secure by designs and an example of a distributed computing system with high Byzantine (A Game Theory problem the blockchain protocol models after) fault-tolerance (uninterrupted despite the failure of one or more components), they can achieve decentralised consensus (collective agreement). This makes the blockchain suitable for recording not just financial transactions but other record management activities spanning different industries. Furthermore, the blockchain can be used to achieve large-scale cooperation in a distributed and decentralised manner that’ll change the perception of having central control in organisations.

Conclusion

Here is a cap of what you should take home:

• The blockchain is an open and distributed database of cryptographically encrypted and interlinked data known as called blocks.

• The blockchain is immutable; once data is recorded, it can’t be deleted.

• Blockchain is an ideal approach for recording and triggering transactions and events efficiently without the need for an intermediary.

• Large-scale cooperation can be achieved in a decentralised manner on the blockchain.

There's more! You can read the part 2 of the introduction here.

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