Blockchain 101: What It Is and Why It Matters (In Plain English)

The only explanation you'll ever need to understand once and for all WTF the "blockchain" is, and why it exists! All in simple terms, no previous knowledge required.

SMooTH

Posted on Mar 12, 2025

Imagine you and your friends keep a joint notebook of transactions.

Everyone has a copy, and when someone writes a new entry, all copies update at the same time. If anyone tries to cheat, everyone else immediately notices.

That’s blockchain in a nutshell.

Blockchain is a decentralized digital ledger that records transactions in a way that’s transparent, secure, and nearly impossible to alter. No need to trust a bank, government, or third party—just trust the system itself.

It’s like a bookkeeping record that no single person controls but everyone can verify.

Still not sure what that means? That’s ok. In this guide, we’ll break blockchain down into bite-sized, brain-friendly pieces, explaining what makes it unique, how it works, and why it’s considered revolutionary.

What the hell is a “Blockchain”?

Well, as its name indicates, it's a chain of blocks — quite literally.

Let me explain.

At its core, blockchain is a special kind of database that stores information differently. Instead of keeping records in a single location, blockchain breaks them into blocks, which are chained together in a chronological order.

Each block contains:

A batch of transactions or data (e.g., “Alice paid Bob 1 Bitcoin”)

A unique cryptographic hash (a digital fingerprint for the block)

The previous block’s hash, linking it to the chain

Once a block is added, it’s permanent.

If someone tries to alter a past block, its hash (=unique digital fingerprint) changes, breaking the chain. This makes blockchain tamper-resistant—you’d have to rewrite the entire chain to change a single record (and convince the whole network to accept it), which is virtually impossible.

Another difference that the Blockchain has over a traditional database, is..

Decentralization

Traditional databases (like your bank’s ledger) are controlled by a single entity. Blockchain is decentralized, meaning its records exist on thousands of computers (nodes) worldwide.

These computers work together to maintain the system, making it trustless—you don’t need to trust any one person, just the fact that the system’s rules work.

If a hacker wanted to alter a blockchain record, they’d have to simultaneously hack thousands of computers, which is ridiculously hard. This decentralization makes blockchain secure and resilient against attacks or failures.

So.. the blockchain exists on my pc?

Not exactly. Blockchain records don’t randomly exist on just any computer. They exist only on computers that choose to participate in the network by running a blockchain node.

If you decide to run a node, you’ll need to download and store the blockchain’s transaction history — either in full or partially, depending on the type of node you choose.

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Fun fact: There are currently over 21000 publicly reachable Bitcoin nodes. This does not account for all the private nodes.

In total there are over 63,000 nodes running for Bitcoin at the time of writing. See live stats here.

And because anyone (yes, even you) can download and inspect this transaction history, the blockchain stays fully transparent and verifiable.

Transparency & Security

Public blockchains (like Bitcoin and Ethereum) are open for anyone to inspect. Every transaction ever recorded is visible, making fraud incredibly difficult.

At the same time, blockchain transactions are encrypted and pseudonymous, meaning your identity isn’t tied to your transactions, but they remain traceable if needed.

Does this mean I can transact anonymously on the blockchain?

Not exactly — blockchain is pseudonymous, not anonymous, and once your wallet is linked to your identity (like through a crypto exchange), all your transactions become traceable. If you need true anonymity, that’s a different conversation (and involves other tools like privacy coins).

Now that we understand what the blockchain actually is, let’s tackle the next big question - what is it for?

Bitcoin: The original blockchain use case

That’s right — blockchain was originally invented by a person (or group) using the pseudonym “Satoshi Nakamoto” in 2008 to serve as a public, distributed ledger for Bitcoin transactions.

The goal?

To allow people to record and verify transactions without relying on any central authority — creating trust in a trustless environment.

What is Bitcoin, you ask?

Don’t worry, I’ll cover that in a future article in our Blockchain 101 series — so make sure to hit that subscribe button (top or bottom of this page) to stay in the loop!

Subscribe now or stay forever ignorant

For now, just remember: Bitcoin is a digital currency — the first and most famous use case of blockchain technology.

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Fun fact: While there have been many attempts to identify Bitcoin’s mysterious creator "Satoshi Nakamoto," no conclusive proof has ever been found.

Since its creation 16 years ago, blockchain has matured far beyond Bitcoin and is now used in a wide range of applications — from finance and supply chains to art and gaming.

Real-World Blockchain Use Cases

Blockchain isn’t just for cryptocurrency (=digital money). Here are just a few of the many real-world applications:

Money transfers & payments: Sending money anywhere in the world instantly and cheaply, without waiting days or paying high bank fees.

Supply chain transparency: Tracking products — like food, fashion, or diamonds — from origin to sale, helping prevent fraud and proving ethical sourcing.

Decentralized Finance (DeFi): Borrowing, lending, and trading assets without traditional banks, all powered by smart contracts.

NFTs & digital ownership: Proving ownership of digital art, music, game assets, and collectibles, and enabling creators to get paid directly.

Decentralized communities (DAOs): Groups of people managing shared funds or making decisions without a central boss, using blockchain voting and rules.

Pretty cool, no?

Conclusion

Blockchain is a technology that lets us build trust online without knowing or relying on each other — unlocking a future of more open, fair, and efficient systems.

By recording secure, tamper-proof transactions without relying on banks, governments, or middlemen, blockchain makes global systems more transparent and trustless — and in many cases, more efficient.

To quickly recap, here’s what makes blockchain so revolutionary:

Immutable ledger: Once a block is added, it can’t be changed. No take-backs, no deletions.

Decentralized: No single entity controls the network, making it resistant to manipulation.

Secure & tamper-proof: Strong encryption and a global network of users make blockchains extremely hard to hack.

Trustless & transparent: Transactions are verified by the network itself — no middlemen required, and anyone can audit the data.

The blockchain’s been around for a while now, and as you can imagine — this is just the tip of the iceberg.

If you're curious to dive deeper, you’re in the right place. In upcoming editions of our Blockchain 101 series, we’ll unpack how blockchain actually works under the hood, explore some of the biggest platforms built on top of it, and break down topics like smart contracts, NFTs, DAOs, DeFi, and more — all in plain English, with no jargon.

So stay tuned, hit that subscribe button if you haven’t already, and get ready to impress your friends with your blockchain wisdom!

Author

SMooTH

@thisissmooth

🐍 Confident Cobra 📢 Communication is my passion 🔎 Research at Pluid 🦉 Ambassador at DYLI 👍

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