Thread by @WisdomTreePrime

We've all heard the term #Blockchain, but what exactly is a Blockchain?

Let's take a 👀! 📜👇

A blockchain is a linked list of transactions (#data) stored on a network of computers.

So, a Block is basically just a bunch of data, usually a collection of records like transaction records, arranged one after another, and each new block references the previous block's data.

Because each block is connected to the previous one, it makes a CHAIN ⛓️⛓️⛓️

And that, my friends, is how we got the term Blockchain!

Let's review real quick!

Chunks of data, each one referencing the previous chunk of data, aligned in a Chain.

Pretty simple so far!

Let's 👀 at what a block is.

Each block has:

✅ A list of Transactions
✅ A hash (a long string of random characters) for the block
✅ The previous block's hash (this is how the block's are linked!)

Remember when I mentioned the data is stored on a network of computers? 🖧🖧🖧

That's called Decentralization.

It also means that no single person or group has complete control over the Blockchain because the data from the Blockchain is #distributed across several computers

With all that said, how do you get all these different computers to agree on one single set of data being the absolute truth?

This brings us to Consensus Mechanisms!

For each new block generated from new data being added to the blockchain, the computer network needs to come to an agreement and confirm (or deny) that the data in the new block being generated is accurate/true.

This consensus among various computers in the network is crucial.

💡 Different Blockchains have different ways of confirming the data in each new block, but all Consensus Mechanisms serve the same fundamental purpose of finding the truth/accurate data. 💡

Here are some Consensus Mechanisms:

👉 Proof of Work (POW)
👉 Proof of Stake (POS)
👉 Proof of Authority (POA)
👉 Proof of History (POH)
👉 Directed Acyclic Graph (DAG)

These are just a few different ways in which blockchains confirm data being added to the blockchain.

Why are there so many different ways to confirm data?

Because each Consensus Mechanism has a trade-off.

For example, some can validate data being added faster than others, and some can store more data in each block than others.

Each Blockchain chooses which Consensus Mechanism is most advantageous for the chain.

And this difference in various Consensus Mechanisms is one of the many ways and reasons behind why there are so many Blockchains.

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👉 DEX's & CEX's
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👉 Layer1's and Layer2's
👉 Blockchain Use Cases

And so much more!