The blockchain is considered as being a public ledger of all the actions that take place through the blockchain technology. Essentially, what the blockchain looks like, is a random string of numbers and letters which can appear very confusing. Simply put, imagine an actual chain of wooden blocks that a child plays with. As each action or transaction that occurs within this blockchain, (for example, contract agreements, purchases, record storage, and more), there are new blocks that are added to this linear chain. The blockchain is constantly growing as the ‘completed’ blocks are added.
Simplifying the Blockchain
On a smaller, and more personal, scale, to get a better understanding think of the blockchain as your debit card statements. You can see each of the chronological actions that have been recorded on your statements, like transfers, deposits, and debts. Each action that occurs is those individual blocks that are added to the blockchain. On a larger scale, since the blockchain applies to everyone’s actions, think of the blockchain as a bank ledger, while each of the blocks in an individual’s bank statement.
You should keep in mind that the Ethereum block chain can execute a lot more than what the typical bank is capable of doing. Each block is a small wooden toy block of any information written into the block chain.
But how are the blocks added to the blockchain?
The computer runs nodes which execute complicated mathematical equations to “form these blocks.” It is tasked with validating and relaying each of the transactions before the new blocks are added. Even though it may seem not so complicated, it is a lot harder than one person (or computer) simply solving equations.
For a visual description of what the computer does, say that you are standing in the middle of a crowded intersection and all of a sudden an extreme event takes place in the middle of the intersection. Without any hesitation, almost instantaneously, everyone who witnessed the event is then sitting in a chair and need to recount the serious event in full detail. (They are also attached to an infallibly accurate lie detector.) As they recount the particulars of the event, everyone says the same thing. Therefore, there is no doubt that this event did, in fact, take place.
The people who witnessed the event are actually different computing nodes within the blockchain. The lie detector test is the “proof-of-work,” in the blockchain, it is a cryptographic process that proves that the computer reached the correct outcome with the correct method. To make any of the events within the blockchain false, would be like getting some of the witnesses of the event to lie about seeing it, and to lie in the exact same way, at the exact same time, without any coercion or preparation beforehand.
This is highly improbable, to say the very least.
The blockchain lets people know what is happening in the digital/cryptographic world. The transactions and the transaction amounts are traceable to each blockchain address, but it is almost impossible to identify who executed each action.