What are blockchains?
In the simplest sense, a blockchain is a public ledger––a record of transactions––where any participant can see all past transactions. With blockchain, this ledger takes the form of a network run by computer nodes, sometimes called miners or validators. Each node makes computational checks to ensure that every transaction taking place on the network is legit.
Blockchains are powerful because their networks are run by many computers owned by many people. A majority of those computers need to agree that any new transactions on the blockchain are legitimate before those transactions can be added to the record, AKA the ledger. That’s why it’s nearly impossible to add false information to a blockchain: you’d have to trick hundreds or thousands of computers at the same time.
Blockchains have added security because they’re also decentralized. Rather than a set of servers stored in one place (or a handful of places) under the control of one government or company, the nodes of a blockchain can be distributed worldwide. If one node of a blockchain goes down, no worries––there are many more spread across the globe.
So when enough nodes agree that a transaction looks good, that transaction gets permanently added to the record as part of a bundle of approved transactions called a block. Once added, that information is incredibly difficult to change or delete. All these confirmed blocks are strung together to make––you guessed it––a chain. A chain of blocks––you see where this is going.
In exchange for doing the work to validate transactions on the blockchain, computers earn cryptocurrency.
Blockchains can also host decentralized applications, known as dapps, that allow users to transact on them to do all sorts of useful and exciting things.
There are multiple blockchains out there, the one Valora operates on is called Celo. Together, cryptocurrencies and blockchains are ushering in an evolution of the internet. We call this evolution Web 3.0.