A blockchain is a new way to store data. Rather than centralising information, and the control over it, in one place (a database), blockchains store it across a network where no one point has the authority to change records, This is called decentralisation..
Blockchain’s record data – in blocks – and securely store this data by chaining those blocks together using cryptography, hence a block-chain.
Satoshi Nakamoto – the alias of the individual or group behind Bitcoin that we met earlier – conceptualised the idea of a blockchain in a 2008 Whitepaper (blueprint). The ability to create a decentralised ledger of transactions was fundamental to the viability of Bitcoin – a new peer-to-peer digital cash – and solving the double-spend problem.
In other words, how to create a purely digital money that cannot be spent twice and doesn’t go through a financial institution; it just flows from person-to-person across a distributed network.
The blockchain was a central element in Satoshi’s solution, in combination with a method for ensuring that only valid transactional data was added to each new block – known as the consensus mechanism.
In reality Satoshi was actually solving a much
bigger a problem that has been around for a very
long time: trust & agency
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