What Is The Blockchain

Back on Day 27, the blockchain was described simply: a public ledger maintained by thousands of independent computers simultaneously, where every transaction is permanently recorded.

That description was accurate. But now, with private keys, public keys, addresses, cryptography, and hashing in place, the full picture is available.

The blockchain is a chain of blocks — each block containing a batch of verified Bitcoin transactions, a timestamp, and the hash of the previous block. That last element is what makes it a chain rather than just a list. Every block is cryptographically linked to the one before it, all the way back to the genesis block on January 3, 2009.

What makes it extraordinary isn’t the technology — databases have existed for decades. It’s the decentralisation. The blockchain isn’t stored on one server. It’s stored on tens of thousands of computers around the world, each holding an identical copy, each independently verifying every new block.

To add a fraudulent transaction, an attacker would need to rewrite the blockchain from the point of the fraud to the present — and do it faster than the entire rest of the network is extending the honest chain. With Bitcoin’s current hash rate, this is computationally impossible.

To shut down the blockchain, every single one of those tens of thousands of nodes would need to be taken offline simultaneously. No government has managed it. No hacker has come close.

The blockchain is the first database in history that nobody controls, nobody can alter, and nobody can shut down.

Satoshi’s coins haven’t moved since 2009. They’re on this database. They’ll still be there in a hundred years.

Tomorrow: what is a block — what actually goes inside one.

— The Daily Bit