What is Blockchain? Introduction for non-technical readers.

Blockchain, what is it?

What is Blockchain? Introduction for non-technical readers.

A short primer about Blockchain for non-technical readers (part 1)
There is a lot of talk about Blockchain. By innovators, industry leaders, investors, consultants and by us. However, I find that many readers and listeners are not yet familiar with Blockchain. This is why I wrote this short primer; it’s meant as an introduction for non-technical readers.

A distributed database

Blockchain is best described as a distributed database. Typically, a traditional database is stored in a central location, somewhere on a networked server. The database is managed by one or more central database administrators. Users must be authorized to use the database. Transactions by users store and read data in the database.

By contrast Blockchain is a decentralized database that is replicated on thousands of computers globally through the use of a peer-to-peer network that can be typically be accessed by anyone. A user transaction added to the Blockchain database is replicated to all nodes is the network.

Disintermediation of trust

What makes blockchain so interesting for business, organizations and governments are two main characteristics: transactions are immutable and independently verifiable.

This makes the information trustworthy without the need of a central authority, like a government, bank, clearing house or notary.


A Blockchain transaction is ‘write-once, read many’. The data is encrypted and added to the Blockchain, which cannot be changed, ever. The entry can be read by anyone, but nobody can change it, not even the owner.

For techies: A blockchain database consists of two kinds of records: transactions and blocks. Blocks hold batches of valid transactions that are each fed through a program that creates an encrypted code (a hash) using a cryptographic algorithm (SHA-256). These are grouped and rehashed and encoded into a Merkle tree. Each block includes the hash of the prior block in the blockchain, linking the two. The linked blocks form a chain, the blockchain.

Independently verifiable

The second important characteristic for non-technical people is that the transactions are independently verifiable.

Using the original information (data, documents, emails, transactions, ID, objects, etc.) using the same public crypto algorithm always results in the same hash code.

If not, something is different. Something has changed or has been tampered with. If even just one bit has changed, the hash code will be different. Checking the new hash code against the hash code in the blockchain database will reveal this. Or show a match including the original timestamp of the transaction.

What about hackers?

Blockchain must be like an unpassable challenge and red-hot target for the hacker community, right? I’m sure, but the way the blockchain set up makes it practically impossible and very expensive to hack. First, to change a particular transaction, it must be found. Then all the hashes for all the related transactions in the chain have to be recalculated and changed. On top of that, it must be done on all the thousands of nodes in the blockchain network at the same time. This makes hacking an blockchain practically impossible.

Summary of the summary

Blockchain is a database replicated over many servers with digital data that cannot be changed and that can be trusted without a central authority.

As such it can be used for many things: from Proof of Existence/Ownership/Authenticity, to Proof of Work/Processing, to so-called Smart Contracts.

More information on each of these use-cases can be found on-line. Or just ask us.

Maarten Boender

Part 2, click here:

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