What problem solves a Blockchain?
Sending digital information across the internet is easy. Every time we share a picture, we're actually sending a copy of the original file. But what happens when we need to transfer value? Unlike a picture, value shouldn't be duplicated—we want to send it only once while ensuring it isn't copied or spent more than once. This challenge is known as the double-spending problem. Blockchain addresses this issue by creating a transparent and immutable digital ledger that ensures secure and verifiable transactions.
A blockchain is a decentralized, distributed ledger that records transactions across a network of computers. Each transaction is grouped into a block, which is cryptographically linked to the previous block, forming a chain. This structure ensures that once a block is added to the chain, it cannot be altered without changing all subsequent blocks, making the data tamper-proof.
Decentralized execution
The execution of Ethereum smart contract code ensures that the deployed code will continue to function in the same way indefinitely. Each node in the network maintains a copy of this code, and the underlying protocol guarantees that it is always executed consistently.
Cryptographically protected
Value is stored safely using cryptography without any other third party entity being involved in the process. Imagine that you want to send a message to a friend safely without anyone being able to get its contents if the message is intercepted. You can encrypt the message using a secret key, and only your friend can decrypt it using the same key. This is how blockchain works, but on a much larger scale because we are sending value across a network of computers of unknown entities so we need to ensure that the value is safe and secure.
By securing the data with cryptography, we can trust that infrastructure without having to trust the entities that are part of it removing the need for a third party to validate the transactions.
Hashing functions
Hashing functions allows cyphering any data of any size into a fixed-size string of characters. This is useful because it allows us to store data in a more efficient way and to ensure that the data has not been tampered with. If the data is changed, the hash will change as well. This is how blockchain ensures that the data is secure and has not been tampered with.
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