What is blockchain?

Blockchain is a method of recording information that makes it impossible or difficult for the system to be changed, hacked, or manipulated. A blockchain is a distributed ledger that duplicates and distributes transactions across the network of computers participating in the chain of blocks. Blockchain technology is a structure that stores transactional records, also known as the “block”, of the public in several databases, known as the “chain,” in a network connected through peer-to-peer nodes. In simpler words, it is like a spreadsheet shared among numerous computers in a network, in which the transactional records are stored based on actual purchases. Anybody can see the data, but they can’t corrupt it.

To keep the network up and running, to provide a large number of transactions (some blockchains have a theoretical throughput of tens and hundreds of thousands of transactions per second), huge computing power is needed, i.e. a multitude of computers (miners). As mentioned above, the point of the technology is decentralization, i.e. different participants, not related to each other, in completely different geographical locations must delegate the computing power of their equipment to the system. Obviously, for such a system to work, participants must be motivated to join it. This is where cryptocurrency comes in, which the blockchain shares with miners/validators for their participation, i.e. making the network work. Each new block recorded in the network brings a certain reward and motivates participants to work further.