TED Talks: The Blockchain Explained Simply. Retrieved from https://www.youtube.com/watch?v=KP_hGPQVLpA
Blockchain is a suite of distributed ledger technologies that can be programmed to record and track anything of value. It is also decentralized. For example,
Central Ledger
In a normal centralized service such as PayPal, PayPal is the trusted authority for all transactions done in PayPal. They own the Ledger.
In a Decentralized Payment network, there are millions of computers on the Internet all trying to update the ledger, so the question is, which one of those computers should be trusted? Blockchain is just a process to figure out how we update this ledger.
Decentral Ledger
Every 10 minutes the blockchain gets updated with a new block of transactions. To determine which computer will update the blockchain, each computer competes to try to solve this mathematical formula (miner). Once a computer states that it solved the problem, each computer will be checked by all the computers to see if the solution is correct. If more than 50% of all computer agrees, then all the transactions in the blockchain will be included and the computer that resolved the formula becomes the trusted ledger for that blockchain.
Blockchain is really a distributed ledger, a shared ledger that multiple parties are using. It allows multiple parties to collaborate without having to trust each other. Blockchain is good at 3 things: Transparency, Authentication, and Auditing.
Blockchains build Trust since all transactions are verified by multiple parties. It’s a great opportunity to get into Blockchains now since centralized areas/systems can be created using this decentralized arena. For example, the Internet is a decentralized network structure, but you have companies like Google, Facebook, etc. that created a centralized system within it. Users for example do not need to build an Exchange server to get an email account but can instead go to companies like Google to create a Gmail account.
References:
TED Talks: The Blockchain Explained Simply. Retrieved from https://www.youtube.com/watch?v=KP_hGPQVLpA
What is BLOCKCHAIN? The best explanation of blockchain technology. Retrieved from https://www.youtube.com/watch?v=3xGLc-zz9cA