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Back 2 Basics: What is Blockchain?

Sometimes you have to revisit the basics. So, let's do it!

What is blockchain?
This answer varies based on who you ask (which is never a good sign) but the simplest explanation is that it is a type of distributed database. Instead of data being stored in a central server (with centralized control), the data is stored in nodes which comprise the network. A node can be any electronic device connected to the network (the requirements for nodes vary by network). Generally, the nodes have to agree on the addition of new data, and each node contains the same unique data representing each and every transaction on the network. The data representing individual transactions is packaged into blocks and then blocks are linked via hashes. A hash is a unique identifier that basically represents the two blocks it is linking and it forms the chain. Thus, you have a basic blockchain.

So in super simplified terms, you have a network of nodes that all record the same data. Groups of data are packaged into blocks which are then connected by hashes. The hashes and the blocks create a chain of blocks, or a blockchain. Make sense?

What is the difference between a public blockchain and a private blockchain?
Public blockchains, also known as permissionless blockchains, do not have restrictions on who can transact on the network. Anyone can participate (transact) on that network and no one controls the network. On the flip side, private blockchains are permissioned networks which restrict who can participate on the network and how users can participate. Bitcoin is an example of a public blockchain and Hyperledger is an example of a private blockchain.

What is the difference between an open blockchain and a closed blockchain?
An open blockchain is a blockchain in which anyone on the network (public or private) can access or read the data memorialized on the network. A closed blockchain is a blockchain (again, public or private) in which access to the data memorialized on the network is restricted to certain users.

People generally think of public blockchains as open and private blockchains as closed, but public blockchains can be closed and private blockchains can be open.

And those are the basics!

#blockchain

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