A blockchain is a database that stores data in groups known as blocks connected in chronological order. While blockchains store varying types of data, the prominent use to date for blockchains is recording and storing digital transactional data.
You’ll often hear a blockchain referred to as a technological protocol. Protocols are rulesets, and in blockchains, they combine cryptography and economic incentives to enforce a collective agreement on information in computer networks. Each computer in the blockchain’s network maintains a copy of the historical data. Blockchain updates only occur when new information satisfies the protocol and is therefore collectively agreed upon.
Blockchains are immutable. Hard-coded software defines user rules and all transactions between users are permanently recorded.
TIP: Great infographic from Investopedia.
Is blockchain secure?
Data storage in blockchains occurs linearly and chronologically. That means blockchain miners always add new transaction data to the end of the blockchain. Once a digital asset transaction is mined and stored on the blockchain, it is unchangeable, barring a rare majority agreement to rewrite the code across the entire blockchain. With each computer in the blockchain's network storing a copy of the blockchain data, the likelihood of successful alterations to the code across the network as intentional theft is insignificant. With no single point of failure or control, the digital asset class celebrates blockchains for their secure, non-sovereign status.
Next UpView All
What is Yield Farming?
Also referred to as "liquidity mining,” yield farmers seek high yield opportunities in exchange for loaning out digital assets, such as stablecoins or bitcoin, to emerging DeFi projects or exchanges.