Trust. It’s what makes us want to share information. There are things I’ll tell my friends, my doctor, or even my bank, which I would never tell a stranger. The more we trust, the more we share. The blockchain turns that idea on its head. It is a massive record of digital information that anyone can access. But why share your digital information on the blockchain when anyone can take a look?
Well, information on the blockchain is anonymous and incredibly secure thanks to some powerful maths called crytography. For those that don't like the idea of big corporations hording digital information behind locked doors, the blockchain is appealing. No corporation owns it. Everyone is free to hold a copy of the blockchain. You just need a computer and some special software.
The most popular, but by no means only, use of the blockchain is to record transactions that use the digital currency Bitcoin. Cutting out the banks, people can buy and sell things using Bitcoins and still trust that the Bitcoins will get from one person to the next as promised.
So how does it work? Let’s take the case of Bitcoins. I buy some shoes with Bitcoins. The Bitcoins travel from my digital wallet to the digital wallet of whoever I bought the shoes from. This is all automatically recorded in the blockchain. A chunk of records is called a block. Each block is linked to the one that came before it, which is where the chain part comes in. Try to fiddle with the records in one block and you’ll mess up the entire chain, which everyone will notice.
With all eyes watching, the blockchain is secure without needing to be hidden away from the masses.