What is blockchain? Easy to understand through four nouns

If you want to understand what blockchain is, you can have a preliminary and comprehensive understanding by knowing these four terms:

1. Decentralized transactions

For a long time, almost all financial transactions have been conducted through institutions such as banks and clearing centers. In other words, all transaction execution, audit, accounting and other processes must rely on a few extremely centralized units to operate. In addition to system dependencies and audit transparency, the security of operating only on a single node is also a problem. If If insiders or hackers want to tamper with information, they just need to change the ledger of the centralized organization.

On the blockchain, no one will review your qualifications first, so no matter your nationality, age, occupation, income, credit history...anyone can trade unconditionally. In addition, blockchain technology allows all people on the chain to participate in bookkeeping . Since each bookkeeper has a book that is updated in real time, even if a computer suddenly fails, it will not affect the operation of the system at all. , if someone wants to tamper with the data, they must change/replace the account books of more than half of the people, eliminating the possibility of tampering by the centralized mechanism.

Blockchain is actually a kind of "technology" that can realize "everyone keep accounts together",
Replacing the old "one unit responsible for billing" approach.

2. Block

A blockchain is made up of "blocks" linked one after the other. What each block contains is actually the "accounting" data mentioned above. The data that can be recorded in a block is limited. Taking the first blockchain in history, the Bitcoin blockchain as an example, about every 2,500 records of data will be packaged into a block, which will be connected to the back of the previous block. , block after block, into a blockchain. Therefore, some people describe the blockchain as an ever-extending train, connected one by one, and each car is full of transaction data.

3. Miner & 4. Mining

As mentioned earlier, "everyone can participate in bookkeeping", and the people involved in bookkeeping are miners . Also taking the Bitcoin blockchain as an example, when a transaction is initiated on the blockchain, the miner's computer will verify it, record it if it is correct, and then package a lot of data into a "block" ”, and then will compete with other miners in the world who can complete a math problem first, and the miner who completes it first and meets the special conditions has the right to connect the block and receive Bitcoin ( Bitcoin ) as a reward, which is The process of "mining".

Since the threshold for becoming a miner is not too high, and there are mining rewards, it attracts a large number of blockchain miners to join. Although the "decentralization" of the blockchain is promoted, miners compete to use computers 24 hours a day throughout the year. Mining without repair has also caused environmental problems.

After understanding the above four terms, I believe that I will have a clearer understanding of "blockchain technology". Of course, there are more details to be added to each part, but this article will not go into so much detail, if you are interested For those who study more deeply, I highly recommend the following video by Mr. Li Yongle. I also clarified many technical details from this video:

Additional Supplement: Environmental Issues of Mining

The mining method of the Bitcoin blockchain is called PoW (Proof of Work). This method requires the miner's computer to continuously calculate the mathematical problems, and compete with other miners who can get the answer first to get the reward, thus causing the miners to continuously upgrade the latest hardware, and then mine day and night, and consume a lot of electricity indirectly. cause environmental problems. The Ethereum blockchain, which is currently the most used in the world, also uses the same mining method.

In fact, PoW is not only an issue of environmental protection, but also has been criticized in terms of "bookkeeping efficiency". For example, the design of the Bitcoin blockchain can only produce one block every ten minutes, which obviously cannot support the transaction speed of global finance. , so now there is a new mining method PoS (Proof of Stake, proof of holding mechanism), which is changed by the number of "shares" held to determine who is responsible for accounting, and the shares here are held by the blockchain. The amount and timing of the native currency. This mechanism solves the problem of miners consuming a lot of electricity and the problem of low efficiency, but it also weakens the principle of "decentralization" of the blockchain because the shares may be too concentrated (Extended reading: The impossible triangle of the blockchain - "efficiency", "security", "decentralization"). After all, you can’t have both, and the PoS mechanism is constantly evolving. For example, “DPoS” has introduced an election mechanism, which slightly makes up for the lack of PoS decentralization. I believe that new mechanisms will continue to be invented in the future.

The above is what I want to share with you. I believe that blockchain technology will completely change our lives in the future. You are welcome to leave a message and discuss together. If you think this article is helpful to you, please click "star" and "heart" for me~