The Blockchain – An Infographic 4th Graders Can Understand
There’s a lot of talk these days about cryptocurrency and the blockchain. We created a simple infographic so everyone can understand the basics of how it works. Essentially, the blockchain is a ledger in which records of transactions (Joe sent Jill 1 bitcoin, etc) are kept.
Every “block” contains a group of transactions. Each block has to be verified and then it is “chained” to the previous block, creating the “blockchain”. All cryptocurrencies are in one way or another based on this technology.
The beauty of the blockchain is the absence of a central governing body, the fact that the records are immutable and that it is decentralized. So no single party can control the network (unless they control the majority of the mining), no records can be changed from the past and no records can ever be lost since copies of the blockchain are always being stored on multiple servers.
This is the complete opposite of traditional record keeping in which transactions are held in a single database controlled by a single entity (like a bank). If that database was ever breached or lost, all records would be in jeopardy.