Episode 4: Why Is It Called Blockchain?

So, now we understand these two things.

We understand that there is a distributed ledger out there that there are many, many copies of this data that can be validated because there are so many copies of it.

And we understand public key cryptography or the concept of public key cryptography. That we can verify that a transaction within that distributed ledger is coming from a specific place.

It’s very difficult to counterfeit. So now let’s actually talk about why blockchain is called “blockchain”. Well, it’s called blockchain because it’s full of blocks. And what a block is, is it’s that distributed ledger that we talked about. It is a record of every transaction that’s happened on the blockchain before a specific date. So if you think about in terms of your checkbook again. Yesterday’s block would be all of the money that you spent from your bank account yesterday.

But to keep an updated accounting of your bank account you’re going to need to know all the stuff that you spent today too. So that would be today’s block. But, today’s block is actually going to have all of yesterday’s transactions in it too. So each block is every transaction that’s happened before a specific date and all of the transactions that happened after that specific date, before the new timestamp happens. And that’s that’s how you keep it balanced. So that’s what blocks are, this constant stacking of blocks of information that are recording every transaction that’s ever happened on the blockchain before that. To make that useful, we have to talk about how those blocks are validated. How you know that these transactions that happened actually happened and all of those different entities are out there that are validating all of the specific copies of it. How consensus is come to. Which is like, everybody agreeing that these transactions are valid. How that that comes to fruition on a blockchain and that’s what we’ll talk about next.

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