Blockchain Basics
This introduction to blockchain is the perfect place to start your crypto journey. Blockchain basics include blockchain vocabulary, an intro to money & crypto, the history of blockchain, a description of core blockchain concepts and practical tips and tricks when to use blockchain and how to use cryptocurrency.
What is Blockchain?
Definition: A blockchain is a growing list of records, collected in blocks, that are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. A blockchain is resistant to modification of data.
Result: This distributed, cryptographically secured database enables a decentralized Web, a token economy, and the exchange of data & values. You can trust in blockchain records, processes are becoming more transparent, and new business models and efficiencies are possible by cutting out middlemen.
In layman’s terms: Bitcoin is digital cash which runs on a computer network – and does not depend on a bank. The Bitcoin technology is also called blockchain. The technology and decentralized network make it impossible to change transactions (data) once they have been transferred (saved) on the blockchain. Since the blockchain is not controlled by any central authority such as a bank, there’s no single group of people that can cheat, print money, decide anonymously changes to the system or exclude people. Applications building on blockchain make use of this immutability of data and of creating new digital currencies (also called tokens or coins). In the past, people always had to trust third parties such as banks, notaries, doctors or IT providers which always took a significant cut. Especially online platform providers such as Facebook & Airbnb benefited from user data, monetized it and misused the trust. Now, You don’t depend on third parties such as banks and notaries anymore. You do not need to trust third parties but rather maths and computer protocols. With blockchain, You can regain control over your digital identity and data and you can consciously decide to share your data and monetize it.
Basically, Bitcoin (blockchain) is a ledger that records who owns what. This ledger is replicated across lots of different computers all over the world, and all of these ledgers stay in sync through the internet. They’re all updating each other whenever a transaction occurs from Bob to Alice. That’s really all it is.
All of it’s just this ledger, and it says Bob has a Bitcoin and then Bob sends it to Alice, Alice has it, and the whole ledger updates itself. No one, no particular point in that ledger is critical. Any point can drop out or add on and the things stays in sync with itself. No one can turn it off. As long as you follow the rules of the system, you can participate in it.
That’s really all you need to understand what Bitcoin is. Anything more technical than that is an interesting detail, but not necessary for understanding it.
Blockchain Terms
Many Blockchain terms are specific. These 30 terms will help you to understand blockchain technology.
It is best practice to look into these blockchain terms and browse for affiliated terms that remain unclear. Blockchain experts must also agree on the meaning of “new blockchain words” and not get lost in tech jargon since it’s preventing people from joining.
Blockchain
Blockchain is a chronological chain of blocks – a list of data sets linked via cryptography.
dApp
dApps are apps that run on a decentralized network.
Ledger
A ledger is a record of transactions. The ledger from a blockchain is distributed and immutable.
Money & Crypto
The features of money are discussed and a comparison of Bitcoin, Gold, stablecoins & FIAT currency is given.
Looking at the history of money, development of social systems and evolvement from ancient barter systems to different monetary systems helps to understand the value of money and what makes a good currency.
Fungibility
Individual units of money should be interchangeable and indistinguishable from others.
Scarcity
The supply of money should be limited and predictable.
Durability
Money should be able to withstand any sort of damage.
Divisibility
Money should be highly divisible to be used in exchange for goods of varying values.
Portability
It should be easy to access, carry or move your money.
Security
Money should be hard to counterfeit to remain valuable.
Blockchain History
Blockchain has naturally evolved and allows people all over the world to directly exchange values today.
Blockchain is based on long-term existing technologies and enables now peer-to-peer electronic cash and other use cases. Since Bitcoin’s launch in 2008, many more blockchain protocols and applications have emerged.
1970s
The first work on public key cryptography & encryption algorithms was published.
1990s
Cryptographically secured chain of blocks and smart contract concepts were published, and a number of digital currencies.
2010s: Protocols
In 2011, the first Altcoin was created and, afterwards, key blockchain protocols such as Nxt and Ethereum launched.
1980s
Research on privacy and the concept of untraceable digital cash was published.
2000s
Nick Szabo conceptualized Bit Gold, Hal Finney introduced Reusable Proof-of-Work and Bitcoin was created in 2008.
2010s: ICOs & Projects
Exchanges, crowdfunding and the inflow of institutional money enabled the launch of many new protocols and projects.
Blockchain Intro
Understand what blockchain technology is and how it works.
It is good to get the overall picture and understand how components such as cryptography, economics and decentralization work together if you consider working with blockchain or building a blockchain project.
Core Concepts
How is blockchain related to economics, governance and privacy? You’ll get a brief intro to the various blockchain topics before jumping into Deep Dives.
Double-spending
A copy is sent whenever you share a digital file. In digital cash this would have caused double-spending without a trusted third party. Bitcoin solved this with its proof-of-work consensus.
How does a blockchain work?
A blockchain is a chain of blocks. Each block is linked to the previous block and contains its hash, a timestamp and transaction data.
More resources
We link to further blockchain introductions and courses on blockchain and cryptocurrency. We believe in a triangulation method of showcasing content, videos, and applying it.
Yes or No?
It’s good to know how blockchain will impact our society and businesses.
Blockchain technology comes with advantages and disadvantages. You don’t need to move your existing business on blockchain tomorrow but we expect a strong use of blockchain technology in the next 5 years.
Who should follow?
We believe everyone should be in a position to control finance and data proactively.
Do you need a DLT?
There are great decision trees when to use blockchain compared to other tech.
How-to-guides
There is a brief intro what you should consider when building a blockchain project.
Make your decision
Blockchain is more than tech. So, your decision should also include more factors.
How to crypto?
It’s easy to get started with cryptocurrency today.
Blockchain technology surrounds some mystery but it’s easy to download a wallet, buy a bit of cryptocurrency, save it or use it to pay for goods at shops or to pay back your friends.
How to get cryptocurrency?
You can purchase cryptocurrency from others, on exchanges, and in wallets. You can also get it from an airdrop for free or as a reward for contributing to a project.
Day-to-day use
If you want to sell or buy products You can easily send and receive transactions with your mobile phone or laptop.
How to store crypto
You can use an exchange, bank or agent or take care of storing your holdings yourself instead of using a trusted third party. Please consider security measures.
Invest in crypto
You can buy cryptocurrency, trade it on the market and profit from price changes. Inform yourself first!
What’s currently going on?
We provide insights to blockchain, research, protocols and solutions and share great updates from experts.
Blockchain is one type of data base system. More distributed ledger technologies, 100s of protocols and 1000s of applications and tools have emerged in the past 11 years. Here’s an insight into the current blockchain industry.
Core technology
The core technology of Bitcoin and other protocols has significantly advanced in all areas.
Tooling
Tooling depends highly on the ecosystem but lots of tooling is open source and can be used by anyone.
Companies and users
1000s of retailers accept cryptocurrency but crypto is not much used as means of payment. Most of the biggest corporates have already experimented with blockchain.
Use cases
There are use cases in all industries but few of them have gained significant traction so far.
Web 3
Many protocols of the “middleware stack” have been enabled and teams started building the Web 3.
Research and reports
Many research papers and reports are published about blockchain nowadays. We collect many of them and share summaries of the most recent reports.