What Is Blockchain Network? In Simple Terms

In recent years, you may have heard the term “blockchain technology” frequently, which probably became more popular with the heating up of the cryptocurrency market. Although blockchain is not only limited to cryptocurrencies, the largest cryptocurrencies such as Bitcoin and Ethereum use blockchain technology.

Blockchain can be simply understood as a way to record and store information in a widespread and distributed manner. You may wonder “What is blockchain technology?” Because blockchain is growing rapidly, it is becoming an essential part of the digital world, and it is your responsibility to learn this technology and prepare for the future.

In this article, you will learn how to answer this question. You will also learn how blockchain works, why it is important, and how you can use this field to advance your career. Stay with the Cryptohovel.

What is blockchain?

what is blockchain

The definition of blockchain in simple term is a distributed database or an immutable and secure ledger in which data is stored in a time-bound manner in blocks that are connected to each other in a chain. Each block in this chain is responsible for storing a type of information.

In other words, it acts as a distributed ledger that allows users to register transactions.

The main difference between blockchain and other databases is in the structure of storing information in its completely decentralized operation, that is, it does not store data in central servers like a bank. A blockchain of information is collected in groups, called blocks, which contain a set of information.

These blocks have limited capacity and can store a certain amount of information. When the capacity of a block is filled and that block is full, it is added to the previous full block in a chain. Each block is created in the continuation of the previous block and with the information of that block.

Given that these blocks are connected to each other with information, therefore, it can be said that they form a chain in which blocks are built in order and placed next to each other. And in this way, it creates a chain of blocks containing information, which is called Blockchain.

Blockchain in simple language is a distributed ledger or an immutable database in which information is placed in a time-bound manner in blocks that are constantly being added and connected to each other in a chain.

History of blockchain

This technology was invented in 2008. While the history of blockchain dates back to 1991. At that time, Stuart Haber and W. Scott Stornetta were dreaming of what we know today as blockchain technology.

The first thing they did was to try to create a chain of secure encrypted blocks; so that no one can tamper with the timestamp of the documents contained in it. A year later, they upgraded their system and incorporated the Merkle tree into it. This made the network more efficient and, as a result, made it possible to collect more documents in a block.

The history of blockchain takes on its true significance from 2008 onwards. When an anonymous individual or group named Satoshi Nakamoto came into action.

Satoshi Nakamoto is the brain behind blockchain technology. No one still knows much about Satoshi. He was the one who introduced Bitcoin to the world; the king of cryptocurrencies that is the first application of blockchain technology.

In 2009, Satoshi published a whitepaper on blockchain and provided details on how this technology is well-equipped to increase digital trust. Satoshi explained that the decentralization of blockchain means that no one will ever have control over anything.

In addition to Bitcoin, other currencies were able to use this technology and launch their own coins. Later, with better understanding of this technology, experts realized that the only use and application of blockchain is not cryptocurrencies; but this technology has many applications. As a result, it can be used in different fields. Currently, blockchains with different applications are being used, each of which has different uses according to its features.

A brief history

A cryptographically secured chain of blocks is described for the first time by Stuart Haber and W Scott Stornetta
Computer scientist Nick Szabo works on ‘bit gold’, a decentralised digital currency
Stefan Konst publishes his theory of cryptographic secured chains, plus ideas for implementation
Developer(s) working under the pseudonym Satoshi Nakamoto release a white paper establishing the model for a blockchain
Nakamoto implements the first blockchain as the public ledger for transactions made using bitcoin

How Does Blockchain Work?

If we were to simplify it, a database is a space for storing information, which is created and controlled by an individual or organization. However, blockchain technology can be considered a network that functions like a database but is not centralized and is not controlled by any entity or organization.

The information stored in blockchain has some key differences compared to data stored in databases. In blockchain, all information recorded is shared among all members of the network, and this information is immutable and cannot be altered or deleted under any circumstances.

As mentioned earlier, data in blockchain is stored within a series of blocks. This data can be anything and is not summarized only in transactions. It is stored on multiple copies across different devices and must match for validity. Blockchain collects transaction data and adds it to a block. Once a block is filled, the data is encrypted using an algorithm, which creates a hexadecimal number called a “hash” as a set of characters.

The hashing process involves taking data regardless of its size and inputting it into a mathematical function to generate an output. This output is called a hash, and its size is always constant.

Each block, based on the data it contains, has its own hash, and this hash is a representation of the information within that block. If even a tiny portion of the information changes or is deleted, the hash changes completely. Even the hashes of other blocks change because each block stores not only its own hash but also the hash of the previous block. This is why it’s called a blockchain.

Now the question arises: Can someone change the contents of a block?

Yes, they can, but this change won’t go unnoticed by the network’s members, and the entire network must approve this change. Otherwise, it lacks credibility and won’t be implemented. So, the notion that information on the blockchain is unchangeable is not entirely accurate.

Block In spaces where information is stored, it is referred to as a ‘block.
ChinThe placement of blocks is expressed as a chain or sequence.
BlockchainA sequence of consecutive blocks is referred to as a blockchain, which forms a distributed ledger for recording information.
Distributed ledgerThe distributed ledger is a decentralized platform for recording and storing data. Blockchain is one type of distributed ledger.

Features of Blockchain

In the following section, we will discuss the unique features of blockchain technology:

  • Immutability: All network nodes have a copy of the entire blockchain data. Any data added to the network is completely final and cannot be altered. Moreover, through encryption and data distribution, the possibility of hacking, deletion, or alteration of recorded information is almost eliminated.
  • Transparency: Information and all computations on the blockchain are accessible to all internet-connected individuals. In other words, the distributed ledger is viewable by anyone on the network. This ensures transparency in various applications such as tax systems, banking settlements, payroll processing, accounting systems, project management, and more.
  • Anonymity: Bitcoin’s design ensures that user privacy is maintained to an acceptable degree. Bitcoin remains anonymous as long as all its components, from addresses to private and public keys, have no direct links to a person’s identity. However, if an address uses KYC (Know Your Customer) guidelines, it can easily be linked to a real-world identity.
  • Scalability: By creating a decentralized platform, blockchain technology can harness significant processing power and high storage capacity. While most people think of blockchain as a platform only for financial transactions, it has the potential to implement projects that were previously unfeasible due to limitations.

Types of Blockchain

Blockchains can generally be divided into two categories: Permissionless and Permissioned.

Public blockchains fall under the Permissionless category, while Private blockchains and Consortium blockchains fall under the Permissioned group. There is also a type known as Hybrid Blockchain, which combines some features of Permissionless and Permissioned blockchains.

Let’s delve into four types of blockchains:

1.Public Blockchain: A public blockchain is a network that anyone can join at any time. Generally, there are no restrictions on participation, and everyone can view the distributed ledger and participate in the consensus process. Almost all major names in the world of cryptocurrencies are implemented based on this type of blockchain. Networks like Bitcoin, Ethereum, and Litecoin are of this kind, with Ethereum being the most popular choice nowadays.

2.Private Blockchain: Membership in a private blockchain network is by invitation only. Access levels to a private blockchain are determined by a central authority, and users must obtain authorization from that authority to participate. Prominent examples include Ripple and Hyperledger.

3.Consortium Blockchain: A Consortium Network is a semi-private and authorized platform governed by multiple organizations instead of a single entity. Consortium blockchains are more decentralized and offer higher security but are also more challenging to establish due to the need for collaboration among various businesses, including logistic and anti-trust issues. Examples include Quorum, Hyperledger, and Corda.

4.Hybrid Blockchain: A hybrid blockchain is a type of blockchain that combines features of both public and private blockchains. It essentially hosts a private blockchain within a public blockchain, allowing controlled participation while maintaining certain public blockchain characteristics. IBM Food Trust, aimed at improving efficiency throughout the food supply chain, is an example of this hybrid blockchain.

What Is Decentralization in Blockchain?

Decentralization is a key feature of blockchain technology. A blockchain allows data to be distributed across multiple nodes in a network, with no central authority for control or decision-making. In a simple example, when you search for something on Google, a request is sent to a server and the result is returned as a response. However, in a decentralized system, there is no central server to provide the service.

Blockchain Security

Blockchain Security

The goal of blockchain technology was to create a decentralized platform that would not be controlled by a central authority, preventing changes to data and maintaining the security of user information. To prevent fraud and hacking, the blockchain algorithm works by adding blocks to the end of the chain of blocks that have already been created.

Each block created includes the hash of the previous block. If any data is changed, it will cause the hash of the affected block and the subsequent blocks to change. The network will reject the changed block because the hash of the block does not match the hash of the previous block.

In addition, if a node is removed from the network, the security of the data within the network is not compromised due to the decentralized structure. If a hacker wants to commit fraud using the algorithms, they must acquire more than half of the nodes in the network in order to gain the power to approve transactions that are in their favor. This would take a significant amount of time and effort.

Many of the things that are currently centralized and controlled are likely to become decentralized in the future. For example, platforms like Twitter(X), Instagram, Medium, and others have the ability to control people’s information and use it. However, experts believe that such platforms should operate in a more transparent environment.

Blockchain technology can help to achieve this goal. The ability to store and monitor information, being distributed and decentralized, eliminating intermediaries, and other features can help to increase people’s trust in platforms and allow them to operate with confidence.

What’s the Future of Blockchains?

What Is Decentralization in Blockchain

The world of blockchain and its applications is truly limitless and profound, and it has become one of the most popular buzzwords in the world today. Although this technology was popularized by the cryptocurrency Bitcoin, its future prospects are much broader than this area. It has a bright future and, with its progress, it brings us closer to the goal of decentralization.

Although the programs and applications of blockchain technology are being developed by several leading companies in the world, they are still in the early stages. The reality is that no one really knows how to design a blockchain user interface. Those who do know have not yet reached a fixed solution.


  • What is Blockchain in Simple Terms?

In simple terms, blockchain is a database for storing and accessing data in a non-modifiable and distributed manner.

  • Do you need a university degree to learn blockchain?

A number of leading universities offer courses in this field. However, to learn in this area, if you have the ability to study, you have almost all the necessary skills to start the learning journey in this field.

  • What programming language is used for blockchain?

The programming language in blockchain can vary depending on the type of network. For example, the Solidity language is used for coding in the Ethereum network. Rust, Go, and Python are also popular options.

  • Who can create a blockchain?

Setting up a blockchain network does not require a license from any specific entity, and if you have the necessary technical knowledge, you can set up a blockchain network.

  • Who invented Blockchain?

It was created by unknown persons, under the pseudonym of Satoshi Nakamoto behind the online cash currency bitcoin.

  • Who controls the Blockchain?

There is no one to make decisions, and power is divided among all network users. No one has sole control over the network.


No event like the emergence of the Bitcoin network in 2009 could lead to their growth and ubiquity. After Bitcoin, many efforts have been made to use blockchain technology in other areas or to improve the shortcomings of this network, such as its limited scalability. A little over a decade after the emergence of Bitcoin, today, with the expansion of technical tools and infrastructure, it is possible to easily create your own private blockchain by writing a few lines of code.

Although we have superficially and in simple language discussed the potential and applications of blockchain technology in this article, the potential for employment in this field is growing.

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