WHAT IS BLOCK CHAIN ?
Block chain is a very popular topic, but for many it continues to be a bit of an enigma with an elusive single source of truth. So, in doing my part to shed some light on this topic, here is a 3-part mini-series that provides some basic but hopefully valuable information.
Block chain is essentially a distributed digital ledger that records transactions without a central authority needed to supervise. Any transaction that needs processing is propagated through the block chain network and the node that meets certain criteria (this is a topic for another time) gets to process it for a fee. Once processed, it is added to the copy of the block chain on every node on the network.
But, did you know the difference between a public block chain and a private one?
The digital currency, Bit Coin is a good example of a public block chain. What this means is that anyone can choose to be a node in this public world-wide network and submit transactions to be processed. For example, if I run a bookstore and accept bitcoin as a form of payment, then I need to participate in the public network to submit every transaction. Additionally, some nodes can also be “miners” – i.e. have the capability to process transactions, not just submit them. Ethereum is another good example of a public block chain.
A private block chain network is absolutely the same thing, except that it is more private in scope and participants are limited by defined criteria. For example: a factory and all its suppliers / vendors can form a private block chain network for their business transactions only.
Ethereum is unique in that it has a public block chain similar to bitcoin, but it provides the ability to build a private network as well.