What is blockchain the simplest explanation


Upstream Jan 09, 2022 Definitions

What is blockchain the simplest explanation

Watch this video right here ???? if you don’t feel like reading.

Understanding Blockchain isn’t easy, especially if you’re not technical. The good news is that Upstream have been talking to the big brains so you don’t have to, and in this post we deliberately leave out the confusing jargon and explain blockchain in a way that’s easy to understand.  We’ve simplified some really complex ideas a lot, so if you know blockchain technology inside out, back up because this video is made for newbies.

What is a blockchain?

Let’s start by splitting the word in two, starting with Block. Think of a physical box where you keep your passport, receipts, maybe the deeds to your house. If that box was digital it would be a block.  A block is basically a digital box full of information. The type of information will differ depending on the reason it’s stored, for example on the Bitcoin blockchain it is mainly storing a record of people buying, selling or transferring bitcoin to each other.

On the Cardano blockchain that digital box could be storing transaction records as well as things like student records, land registration documents, medical records, and much more. 

As well as information, a block also includes a digital fingerprint to make it unique. This digital fingerprint is called a hash. A hash is a chain of letters and numbers, and just like a fingerprint, it is unique and identifiable. The hash also makes the block secure and transparent because if any piece of data changes within the block, then a new hash is created. This new hash lets everyone know that the information in the block has changed.

Think of DNA

Just as parents pass their DNA on to their children, a block also carries a piece of critical information forward, the hash of the previous block. For example, if we have 3 blocks in a chain, block 2 would contain the hash of block 1, and block 3 would contain the hash of block 2. This essentially turns the blocks into a coherent chain of information – a blockchain.

So what makes blockchain secure?

A new, random hash is created for every new block, so in order to change the information inside an existing block, you would have to generate a new hash for the edited block, and a new hash for EVERY block after that until the end of the chain. Now you might be thinking that computers are pretty powerful these days so I’m sure you could design some software to work out what all the new hashes would be, right? Well yes, you’d be right, but blockchain has a way to protect itself against this. It’s called “Consensus”.

You can think of consensus like voting in a political election. If the majority of people vote a certain way then that party, or collection of clowns and liars, will govern the country for the next term. Consensus on a blockchain is achieved if more than 50% of the people on the network either approve or reject a block.

Blockchain is everywhere!

One of the key factors that make a blockchain secure is the fact that there isn’t just one copy of the blockchain, and it isn’t stored in one single location. Instead, a blockchain is on thousands of computers that are run by different people all around the world and linked together through the internet. This is what “decentralised” means. Because of all these people with computers running their own version of the blockchain, there is no single point of vulnerability or failure.

So how does this affect security?

Being part of the network allows you to download a full copy of the blockchain. When a new block is created the people on the network have to verify that all the hashes are correct and everything is still in order and that nothing has been tampered with. If the block looks good then each person will add the block to their copy of the blockchain. This is called “verification”.

So basically, if anybody wanted to change the data in an existing block they would need a super computer that’s way more super than anything available right now. This computer would then have to generate all the new hashes and then you’d need to be able to convince at least 50% of people running the blockchain to accept the new block. The other way round it is to set up a huge collection of computers and run 50% of the network by yourself – unlikely!


That’s our very simple overview of a blockchain and, of course, there is a lot more to it than that and each blockchain works slightly differently, but the core concept is the same.

Follow us on twitter here to connect with us and join the conversation, or just lurk. We don’t mind!

Subscribe to our youtube channel and click the notification bell to get an alert when Dave publishes a new video