A Blockchain is commonly referred to and described as a distributed ledger or database, simultaneously existing on multiple devices via a peer-to-peer network. In layman’s terms, this simply means that every device on the network, also referred to as nodes or clients, have a copy of the entire ledger or database.
The term blockchain, however, gets its name from the fact that each set of records, for example, transactions, are stored within a block.
New blocks are then appended to the preceding set of blocks, forming a linked chain of blocks, hence the term “Blockchain”.
Therefore collectively, the blockchain is a record of all the transactions that have ever occurred on the network, with each block containing its own respective batch of those records. And although the order of blocks within a blockchain is chronological, the order of transactions stored within each individual block is determined by the creator or miner of that block.
And one of the most important things about Blockchains, if not the most important, is that blockchains are immutable….meaning that once data has been committed to a block within a blockchain, it can never be changed.
Blockchains, therefore, allow us to keep historically accurate, tamper-free records of, well, anything we can think of.
Now that we know what a blockchain is, let’s take a deeper look inside the inner workings of a block.
Each block within a blockchain contains 4 elements
- A set of records
- A hash of the block
- A hash of the previous block
- And a timestamp
And although there may be additional elements, depending on the blockchain in question, these four elements are common to most, if not all blockchains.
Let's explore each of them in more detail.