(W39M00) Blockchain - Introduction

What you must know about blockchain technologies before you start the course

The absolute essentials

In this course, our main target will be blockchains. Blockchain technologies (or else called DLT – Distributed Ledger Technologies) are getting more popular and more widely used in the industry because of some really important aspects that they offer, in contrast with traditional centralized solutions. Some of these aspects are:

• Decentralized. A blockchain stores data across a network, which eliminates serious risks coming with data held by a central entity. Using distributed networking, there are no central points that can be exploited, so there is no single point of failure. In blockchains, every node has a copy of it and the quality is maintained through massive database replication and computational trust. No central trusted node exists, and no copy is more “trusted” than another.
• Transparency. All transactions can be viewed by anyone (on public blockchains). Transparency in a blockchain helps the network verify that no counterfeit currency was produced, prevents double-spent and that the amount of coins that exist is the same with the amount generated until a given time.
• Immutability of data. Once a transaction has been recorded in the blockchain by a node, no one can alter or remove it. This is the main difference of a blockchain from regular database systems, in which data can be edited or even deleted.
• Process integrity. Users can be sure that transactions will follow the rules set by the community developing each blockchain. That way, there is no need for a trusted central party.
• Openness. Speaking about public blockchains, most of the time they are open source and permissionless. That way, everyone can use this blockchain, participate in the network and even fork the source code to create its own variation of the blockchain.

Blockchain was introduced by Satoshi Nakamoto with the introduction of the Bitcoin cryptocurrency, which is still the most famous and widely used cryptocurrency. Bitcoin concerns a decentralized digital currency, where the two parties of a transaction can transact directly with each other, without involving third parties like a bank or a financial institution. These transactions are verified by network nodes through the use of cryptography; these nodes are entities connected to the bitcoin network.