Whow blockchain works
Simple explanation. Blockchain is essentially a chain of blocks. Blocks contain digital information, think of them as packets of data tied up like a Christmas present. In the case of the Bitcoin blockchain: Within each block is a series of bitcoin transactions that took place over a period of time.
However, the word "blockchain" became known only recently - when a certain Satoshi Nakamoto showed how these technologies can be used to build a new financial system.
Blockchain was described in Satoshi Nakamoto's article "Bitcoin: A Peer-to-Peer Electronic Cash System". There, in just eight pages, the author described the basics of the Bitcoin cryptocurrency, which was based on the blockchain algorithm. Blockchain appeared alongside Bitcoin, but it can be used independently and even modified. Anyone can create their own blockchain, even on their laptop.
I am far from the hype about bitcoin commissions and exchanges, blockchain is a technology for me. New, strange, incomprehensible, but it seems to change the world, unlike your stories. Apparently he has been with us for a long time. I wrote this post as if I was talking about blockchain with my parents. I can also send it to my friends in the humanities and I'm sure they will understand.
So they came up with an alternative approach: keep a copy of the list for everyone. Thus, the attacker will not only have to rewrite the list, but also go into each house and rewrite the lists there. And then it turns out that someone kept several lists at home that no one knew about. This is called decentralization - see Bitcoin Fortress App for some details.
The disadvantage of this approach is that in order to make new entries, you will have to call all the other participants and inform each of them about the latest changes. But if those participants are soulless machines, at least that's not a problem.
In such a system, there is no single point of trust and, therefore, the possibility of corruption and fraud. All participants in the system act according to the same rule: no one trusts anyone. Everyone believes the information they have. This is the main law of any decentralized network.
Our friends liked the idea of keeping a tamper-proof “who borrowed whom” list. They also don't want to remember who paid for whom at the bar and how much they still owe - it's all written on the wall. You discussed the idea and decided that now you needed a list for everyone.
But who should you entrust with such an important account? When it comes to money, trust comes first. We will not entrust custody of our money to an unknown person. Our ancestors invented
for this, the banks, which they finally began to trust, because they are backed by a license from the Central Bank, laws and insurance.
In a circle of friends, everyone trusts each other, and you can simply choose the most responsible person for this role. But what if the question is about strangers? An entire city, a country or the whole world, as is the case with bitcoin? You can't trust anyone there.
Blockchain uses the mechanism of public and private keys for this, IT specialists have long used them to authorize on the same SSH. Here's how this complex but beautiful math works: You generate a pair of long prime numbers on your computer—the public key and the private key. The private key is considered top secret because it can decrypt what was encrypted with the public key. But the opposite is also the case. If you share the public key with all your friends, they can use it to encrypt any message so only you can read it because you have the private key. But beyond that, the public key has a useful effect - you can use it to verify that the data was encrypted with your private key without decrypting the data itself.