Basics of Blockchain
Before we dive into the Ethereum blockchain and start writing smart contracts, let's explore what a blockchain actually is. This chapter will jump into some of the fundamentals and give you a practical understanding of what blockchains are. This section will walk you through a coding exercise that will enable you to write a blockchain from scratch.
Blockchain is a combination of databases, cryptography, and network dynamics. Back in the 1990s, the concept of blocks of data being chained together (like a linked list) was developed. Fast-forward to 2008, when a white paper proposed the idea of Bitcoin, a digital currency with the underlying technology being blockchain.
The whitepaper proposed that a peer-to-peer version of electronic cash would allow online payments to be sent from one party to another without going through a financial institution. This gave way to the concept of blockchains.
Blockchain is a set of data (organized like a table of data) that is locked at each point of editing. Once data is added to the blockchain, the information is permanent.
What is a Blockchain? (Deeper Dive)#
Beyond the textbook definition of a blockchain, there are a number of properties that make the solution a viable platform for storing data and value.
These key properties make blockchain solutions a highly suitable option for sharing information and value across the internet:
Decentralized data
No intermediaries
Quick settlement