What does blockchain mean? Definition, concept, and meaning of the chain of blocks.
What does blockchain mean? The blockchain is the technology everyone is talking about. Many media outlets highlight that it is the 21st-century revolution after internet. But why? Get to know the concept and definition of blockchain and discover why it has raised so much expectation.
Blockchain for beginners
Don't worry if you're not familiar with the basic concepts of blockchain.
In this article you will find an introduction to blockchain for beginners. If you want to dive deeper into the concept of blockchain, we offer an advanced description in our guide on how blockchain works.
What does blockchain mean? Definition, meaning and concept of blockchain
Definition of blockchain
The blockchain technology, or blockchain, is nothing more than an encrypted ledger or accounting book, although with certain particularities.
In particular, what blockchain does is record each of the transactions made on its platform in sets of data called blocks. All the blocks are connected chronologically. That is, when a new block is created, it is linked to the one that was created just before and, subsequently, it will be linked to the next block that is created.
In addition, encryption provides a layer of security for the information stored in the database.
Meaning of blockchain
Literally, the translation of blockchain in Spanish is "cadena de bloques", due to this curious way of storing information in linked blocks.
What makes blockchain special, compared to other accounting systems (such as those used by banks), is its way of storing data. The generated blocks are stored on millions of computers connected to the blockchain network. Each of these computers is known as nodes of the blockchain network.
The objective of multiplying this information is to consolidate the security of the network. If the information is modified on one of the computers, the others would remain the same and the failure would be detected. Therefore, transactions made on the blockchain are immutable.
The chain of blocks is the key piece of the main characteristic of cryptocurrencies: Decentralization. That is, it does not need intermediaries, such as banks.
When you make a traditional transfer, you have to do it through a bank. In this way, you order an operation, your bank confirms it, and the money is transferred to the recipient, also being deposited in their bank.
Normally, these transfers take hours or even days. If the transfer is international, it can even take a week. And of course, the bank takes a commission.
On the other hand, the blockchain allows these transactions to be made peer to peer, that is, person to person. Without intermediaries. Without the need for banks.
In addition, blockchain transactions take only a few minutes and it is available 24 hours a day, 365 days a year. Regardless of where the recipient is or what time the transfer is made.
In order to process these transactions, the blockchain uses the computing power of all these interconnected computers. In exchange for providing these resources, the sender of the transaction must pay a small fee.
Decentralized system or distributed system
It is common to hear that blockchain is a decentralized system, but that is not entirely true. In the blockchain, each of the network nodes is interconnected. If any of the nodes fails, the information is not lost, it is in the other nodes. That is why it is a distributed system.
What this technology achieves is eliminating intermediaries. That is, transactions are no longer dependent on a central figure that controls the operations. That is why we talk about decentralization in the blockchain.
In summary, you could add to the definition of blockchain that it is a distributed system that allows decentralized transactions.
What is blockchain for dummies
Let's forget about technical nonsense. Do you want to know what the blockchain is? Nothing better than blockchain explained for dummies to clarify all doubts.
According to its definition, blockchain is nothing more than a technology for managing information. It is a large encrypted database replicated on thousands of computers.
The blockchain is secure
Being replicated, it is impossible to modify. If a hacker changes the information on one computer, the other nodes would notice and correct the modification.
To make any changes, the hacker would need to modify the information on ALL computers, something that would require a computer so powerful that it doesn't even exist. Not even all of Google's servers have enough capacity to change the blockchain.
This is reinforced by the encryption of the data, requiring even more power from the computers to "translate" said data.
The future of blockchain
The origin of blockchain is bitcoin. It can be assured that the creator of blockchain is the creator of bitcoin. In summary, the chain of blocks was developed to carry out financial transactions securely and much faster and cheaper than banks.
However, new technologies within blockchain have allowed the creation of the so-called "smart contracts" and Dapps. That is, applications that allow using the power of all computers connected to the blockchain to run computer programs.
This has been a real revolution, as blockchain allows completely replacing online servers or cloud applications, providing a much faster and safer service.
Indeed, top-level international companies are starting to adopt the chain of blocks.
Blockchain Concept from Scratch
This is just an introduction to blockchain to understand its definition. We hope that you have at least understood the basic concepts. However, this technology has brought about a true transformation in the industry and will likely soon become part of our daily lives. Consequently, it is important to deeply understand it.
If you want to know more about the meaning of blockchain, you can learn in-depth about how the blockchain works, the advantages and disadvantages of blockchain, or discover examples of blockchain.
You can also learn a lot more about the blockchain with our blockchain tutorial.