Blockchain – Explained!

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Blockchains, at their most basic level, are ledgers, similar to the record books used by accountants. You only want one copy of a ledger documenting your property rights, or the things you own, floating about. Today, most ledgers rely on a trusted third party to keep them up to date and determine the official version. This also implies that we expect these record keepers to be completely trustworthy and competent. Because we all know how cruel the world really is, right?

Blockchains are a system that allows you to keep track of all of your transactions without depending on a single trusted third party. There are three ways that blockchains do this. To begin, hash functions are used to make any modifications to the blockchain visible to anybody watching it. Second, by making several copies of the record book available for others to keep track of. So it’s safe to say that they’re secure!

Public blockchains take it a step further by requiring an extremely expensive dice roll that is hard to forge, making it more beneficial to collaborate honestly. As a result, a network that is both open and capable of imposing scarcity is created. Bitcoin was the first institution that allowed regulations and property rights to be enforced without relying on a trusted third party who may or may not be trustworthy and competent.

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