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What is a Blockchain?

Resources Used:

TLDR : Imagine a blockchain is like an append only, singly linked-list that anyone in the world can see.

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Key Concepts

1

Hash

Hash

A hash is a fingerprint of some digital data.

Regardless if the input data is 1 char or an entire library, a unique hash will be generated. SHA-256 (Secure Hash Algorithm 256-bit) produces a fixed-size 256-bit hash value.

2256=1.1579209×1077 combinations2^{256} = 1.1579209 \times 10^{77} \space \text{combinations}

According to Bitbo, there is reportedly 200 million active Bitcoin addresses.

The chances you randomly guess/brute force a seed phrase is about:

1/8.6×10−781/8.6 \times 10^{-78}

TLDR: The odds someone hacks your Bitcoin address through guessing/brute force is essentially 0.

2

Block

Block

A block is a container that holds a list of transactions or data records.

Components

  • Data: Transactions or records that the block stores
  • Nonce: A value used in mining to find a valid hash
  • Hash: Digital signature combining block number, data, previous block’s hash, nonce, and timestamp
3

Blockchain

Blockchain

A chain of blocks that are cryptographically linked together.

Blockchains are “immutable” because changing ANY data in a block will:

  • Change the hash of that block
  • Invalidate all subsequent blocks
  • Each block can hold ~4,000 transactions (1MB limit)
4

Distributed System

Distributed System

The network is distributed, meaning:

  • Anyone can see the blockchain
  • The network accepts the majority consensus
  • The longest chain is typically considered valid