Bitcoin for beginners
However, the word "blockchain" became known only recently - when a certain Satoshi Nakamoto showed how these technologies can be used to build a new financial system.
Blockchain gives cryptocurrency another property - anonymity. In the case of a bank transfer, the bank knows exactly who, to whom and how much money was transferred. If they wish, they can block the transfer, or share this information with the state.
Contents
Blockchain was described in Satoshi Nakamoto's article "Bitcoin: A Peer-to-Peer Electronic Cash System". There, in just eight pages, the author described the basics of the Bitcoin cryptocurrency, which was based on the blockchain algorithm. Blockchain appeared alongside Bitcoin, but it can be used independently and even modified. Anyone can create their own blockchain, even on their laptop.
I'm far from the hype about commissions and bitcoin exchanges, blockchain is a technology for me. New, strange, incomprehensible, but it seems to change the world, unlike your stories. Apparently he has been with us for a long time. I wrote this post as if I was talking about blockchain with my parents. I can also send it to my friends in humanities and I'm sure they will understand.
Decentralization
So they came up with an alternative approach: keep a copy of the list for everyone. Thus, the attacker will not only have to rewrite a list, but also enter each house and rewrite the lists there. And then it turns out that someone kept several lists at home, which no one knew about. This is called decentralization - see Bitcoin Fortress software for a detailed description.
The downside to this approach is that in order to make new entries you will have to call all the other participants and inform each of them of the latest changes. But if these participants are soulless machines, at least that's no problem.
In such a system, there is no single point of trust and therefore the possibility of corruption and fraud. All participants in the system act according to one rule: no one trusts anyone. Everyone believes the information they have. This is the main law of any decentralized network.
Trust
Our friends liked the idea of keeping a tamper-proof "who borrowed whom" list. They also do not want to remember who paid for whom at the bar and how much more they owe - all this is written on the wall. You discussed the idea and decided that now you need one list for everyone.
But who is to be entrusted with such an important account? When it comes to money, trust comes first. We will not entrust the custody of our money to an unknown person. Our ancestors invented
for this, banks, which they eventually began to trust, since they are backed by a license from the Central Bank, laws and insurance.
In a circle of friends, everyone trusts each other, and you can simply choose the most responsible person for this role. But what if the question is about strangers? An entire city, country or the whole world, as is the case with bitcoin? Nobody can be trusted there.
BTC transactions
Blockchain uses the mechanism of public and private keys for this, IT specialists have long used them to authorize on the same SSH. Briefly on how this complex but beautiful math works: You generate a pair of long prime numbers on your computer - the public key and the private key. The private key is considered top secret as it can decrypt what is encrypted with the public key. But the opposite is also true. If you share the public key with all your friends, they can encrypt any message with it, so only you can read it because you have the private key. But beyond that, the public key has a useful effect - you can use it to verify that the data has been encrypted with your private key, without decrypting the data itself.