What is Blockchain

Blockchain is a database structure consisting of one "block" after another. Each block stores a specific size of data. The blocks are connected to form a chain structure according to the generation order, which creates a "chain of blocks" called a blockchain.

What is a block? What is a block made of? Please refer to the "What is a Block" chapter.

Unlike traditional databases, blockchain generally has the following core features: decentralization, difficulty to corrupt, and transparency.

What is Decentralization? Why is Blockchain Decentralized?

Decentralization refers to how power is given to people worldwide to manage, rather than being centrally managed by one person or entity.

The blockchain system is maintained by many servers together. Each server involved in the maintenance stores a copy of all the data in the blockchain. Data in the blockchain will not be lost as long as one server is still operating. These servers are called "nodes" in the blockchain system, providing storage space and computing support for the whole system.

If someone wants to record some new data in the blockchain system, all nodes must agree on it - if more than half of them agree, they will record it together. In contrast, the nodes of a blockchain are usually run by different entities not connected outside the blockchain system. We can therefore assume that the blockchain is not run by a single individual or entity but is maintained by multiple parties, often referred to as the core feature of the blockchain: decentralization.

What are nodes? How do these nodes work together through a "consensus mechanism"? What is a consensus mechanism? Please refer to the "What is a Node/Validator" and "What is Consensus Mechanism" chapter.

Why is Data in a Blockchain Difficult to Corrupt?

An encryption algorithm connects two adjacent blocks in the blockchain system. Specifically, the data in the previous block will be encrypted into a cryptographic digest and recorded in the next block. Each block is generated by relying on the data recorded in the last block, thus forming a chain. Therefore, once data is recorded in a block, it is continuously encrypted and passed on to each subsequent block as a digest.

If someone wants to corrupt the data in a historical block, it will cause the data in all subsequent blocks to be changed. However, since all nodes have recorded all subsequent blocks, all nodes would need to modify it, which would require the consent of more than half of all nodes. Nodes in the network will consider the act of data corruption evil and will not agree.

But if more than half of the nodes in the network are controlled by the evil-doer who wants to corrupt the data, then corruption will happen. This is the vulnerability of the blockchain system, which is based on the assumption that "the majority of the group is always righteous." Therefore, in a blockchain system, if someone has control of more than half of the nodes, he can corrupt the data in the blockchain to his advantage.

This is why it is difficult to corrupt the data in the blockchain, but there is also a possibility.

Why is Blockchain Open and Transparent?

The technical foundation of blockchain is open source, and the data in the blockchain is available to anyone. Everyone can query the data in the blockchain through the open interface and develop related applications, so the whole blockchain system is open and transparent.

If you want to know more about blockchain's characteristics, please check “What is Blockchain Trilemma”.