The Blockchain for Dummies - A simple Introduction Into Blockchain's Technology

An Easy Introduction to Blockchain Technology?

• A blockchain is a decentralized software application which allows several users to manage a database jointly without a central authority
• Blockchain technology benefits from high-trust, due to no individual or group being able to edit stored data  
• Cryptocurrency and blockchain technology can sound complicated but is conceptually quite simple

The Blockchain for Dummies : Understanding How Blockchains Work

Blockchain technology which underpins coins like Bitcoin has become one of the biggest tech buzzwords of the 21st Century.

However, many people don’t understand what a blockchain is. Nor for that matter, how blockchain technology is being used to revolutionize modern business and commerce. 

Blockchain Explained

Any blockchain for dummies guide needs to start with a brief introduction to decentralization. To do this, imagine a simple Word document stored on a cloud storage service like Google Drive. 

Millions of people use cloud storage services like Google Drive and One Drive. However, both of these systems are centralized. If servers owned by Google or Microsoft ever go down or get hacked, any data will be lost. Also, it is possible that a rogue employee or software bug could one day delete or edit data without a users’ permission. In fact, this happened very recently with Microsoft.

Decentralization Explained

When data is decentralized, it is not stored in one place or managed by a central authority like Microsoft. Instead, copies of pieces of information exist on millions of different computers simultaneously. 

• Decentralized data can never be accidentally deleted
• Because data is stored in several places at once, it is not possible for information to be edited in any way by a third-party

What is a Blockchain? 

A blockchain is essentially a transaction ledger. In fact, in cryptocurrency contexts, this ledger can be compared to a Microsoft Excel spreadsheet. Specifically, one which is hosted on millions of computers around the world simultaneously.

Unlike with a bank operated transaction ledger, no third-party can edit ledger entries. Nor can a critical system failure result in data loss. However, just like with a bank transaction ledger or Excel spreadsheet, data does still need to be updated on a regular basis.

How Blockchain Technology Works

In the case of coins like Bitcoin, the Bitcoin transaction ledger needs to be updated every time funds move from one address to another. To do this, when coin amounts are exchanged, transactions are bundled into encrypted blocks. Every computer running the Bitcoin blockchain then receives the same block at the same time and verifies that updated information is correct.

• If a computer running the Bitcoin blockchain receives transaction information which doesn’t match information received by at least 51% of all other computers, new information is rejected as false
• False information can include transactions where users attempt to send the same amount of cryptocurrency from the same address simultaneously  

When new information submitted to the blockchain is confirmed as correct, the transaction ledger is updated. This results in a growing list of encrypted records, as new blocks of transactions are verified. (Hence the term, blockchain.)

How Lethean uses blockchain Technology

At its core, Bitcoin uses a very simple blockchain. However, blockchain technology is already sophisticated enough to allow for the decentralization of entire virtual machine and software applications. The most famous example of this is Ethereum.

To go one step further, Internet privacy advocates Lethean, have created a blockchain-based VPN service. Specifically, one which benefits from no centralized VPN infrastructure. Instead, Lethean’s VPN software is peer to peer and decentralized, in an identical way to the Bitcoin transaction ledger.    

Lethean Benefits

As a blockchain-based, decentralized VPN, anyone anywhere can download Lethean’s VPN software. When they do, this synchronizes to the rest of the Lethean network. After this, users can either make use of the Lethean VPN themselves or set up their own Lethean VPN exit node. 

• Users who set up Lethean VPN exit nodes monetize these by granting paid access to other Lethean users
• Being decentralized and blockchain based makes Lethean more private (and secure) than TOR or other mainstream VPN services
• Lethean is anonymous and does not record any user information or independently identifiable LTHN transaction information  

The Future of Blockchain Technology

Blockchain technology is fast evolving. Today it is, therefore, already possible to access blockchain-based cloud storage services, decentralized cloud computing platforms, and much more. More importantly, blockchain technology is already going mainstream. In future, it is, therefore, not unlikely that blockchain-based systems will be used to offer everything from safe medical record storage to decentralized web hosting platforms.