• NOTE: This is a pasted transcript of the video and isn't so fun to read.

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• video
• A blockchain is a chain of blocks that contain information.
• Originally described in 1991 by a group of researchers and was originally intended to timestamp digital documents, so that it was not possible to backdate them or to tamper with them (almost like a notary)
• it went by mostly unused until it was adapted by Satoshi Nakamoto in 2009 to create the digital cryptocurrency Bitcoin
• Now, a blockchain is a distributed ledger that is completely open to anyone
  • they have an interesting property: once some data has been recorded inside the blockchain, it becomes very difficult to change it.
• Blocks
• each block contains some data, the hash of the block and the hash of the previous block.
• The data that is stored inside a block
• depends on the type of blockchain
• the Bitcoin blockchain for example stores
• the details about a transaction in here
• such as the sender receiver and the
• amount of coins
• a block also has a hash
• you can compare a hash to a fingerprint
• it identifies a block and all of its
• contents and it's always unique just as
• a fingerprint
• once a block is created
• its hash is being calculated changing
• something inside the block will cause
• the hash to change so in other words
• hashes are very useful when you want to
• detect changes to blocks
• if the
• fingerprint of a block changes it no
• longer is the same block
• the third
• element inside each block is the hash of
• the previous block and this effectively
• creates a chain of blocks and it's this
• technique that makes a block chain so
• secure let's take an example here we
• have a chain of three books as you can
• see each block has hash and the hash of
• the previous block so block number three
• points to block number two and number
• two points to number one
• now the first block is a bit special it
• cannot point to previous blocks because
• while it's the first one we call this
• block the Genesis block now let's say
• that you tamper with the second block
• this causes the hash of the block to
• change as well in turn that will make
• book three and all following blocks
• invalid because they no longer store a
• valid hash of the previous block so
• changing a single block will make all
• following blocks invalid but using
• hashes is not enough to prevent
• tampering computers these days are very
• fast and can calculate hundreds of
• thousands of hashes per second you could
• effectively tamper with a block and
• recalculate all the hashes of other
• blocks to make your block chain valid
• again so to mitigate this block chains
• have something that is called proof of
• work it's a mechanism that slows down
• the creation of new blocks in bitcoins
• case it takes about 10 minutes to
• calculate the required proof of work and
• add a new block to the chain this
• mechanism makes it very hard to tamper
• with the blocks because if you tamper
• with one block you'll need to
• recalculate the proof of work for all
• the following blocks so the security of
• a block gene comes from its creative use
• of hashing and the proof of work
• mechanism but there is one more way that
• block chains secure themselves and that
• is by being distributed instead of using
• a central entity to manage to chain
• block chains use a peer-to-peer network
• and everyone is allowed to join when
• someone joins this network he gets a
• full copy of the blockchain the node can
• use this to verify that everything is
• still in order now let's see what
• happens when someone creates a new block
• that block is sent to everyone on the
• network each node then verifies the
• block to make sure that it hasn't been
• tampered with and if everything checks
• out each node adds this block to their
• own blockchain all the nodes in this net
• or create consensus they agree about
• what blocks are valid and which aren't
• blocks that are tempered with will be
• rejected by other nodes in the network
• so to successfully tamper with a
• blockchain you'll need to tamper with
• all the blocks on the chain redo the
• proof of work for each block and take
• control of more than 50% of the
• peer-to-peer network only then will your
• tampered block become accepted by
• everyone else so this is almost
• impossible to do block chains are also
• constantly evolving one of the most
• recent developments is the creation of
• smart contracts these contracts are
• simple programs that are stored on the
• blockchain and can be used to
• automatically exchange coins based on
• certain conditions more on smart
• contracts in a later video the creation
• of blockchain technology peaked a lot of
• people's interests soon others realized
• that this technology could be used for
• other things like storing medical
• records creating a digital notary or
• even collecting taxes