Blockchain: A Decentralized Ledger of Transactions
This is the working definition that we’ve been using in our workshops, and speaking events. The reason we like this definition, is because it is easy to break down this definition into its parts, in order to understand the whole.
Some examples of things that are centralized will make it easier to understand things are decentralized.
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Centralization means that the power or control within a system, is within the grasp of a single entity.
Decentralization means that the power or control is distributed amongst the participants of the system.
A ledger is a record ( collection, list ) of transactions
Accountants keep ledgers when they record transactions that take place within a business.
A transaction is a transfer of ownership
A send to B : 1 Bitcoin
A Blockchain is a ledger, which is shared by the participants of the system, that records the transfer of ownership that takes place between the users of the system.
Transactions are grouped together in what are called “blocks”. These blocks are cryptographically linked together to ensure that the ledger is tamper proof.
What does this enable?
Check out our blog post on Blockchain Use Cases to see what becomes possible with the system described above.