<p>The purpose of the blockchain is to create agreement about the ownership of balances.</p>

<p><strong>The problem</strong> is that if everybody was creating their own records of transactions they witness, the various records would be in different orders and any conflicting transactions would cause a split in what is considered true. At any point of time it would be very unlikely for any two sets of records to match completely.</p>

<p><strong>Traditional money services</strong> solve this by having a trusted entity as the arbitrator and sole source of truth.</p>

<p>Bitcoin solves this differently: Each participant collects all transactions they hear about and repeatedly proposes these packaged as a set of updates. We call these sets of balance updates <strong>blocks</strong>. Instead of having a sole source of truth, the network holds a lottery to designate one of these blocks as the commonly accepted new status quo of the balances. As each block refers to the previous commonly accepted network state and by its acceptance creates a new commonly accepted network state, the blocks create the eponymic chain of commonly accepted states.</p>

<p>The resulting <strong>blockchain</strong> contains the record of every transaction ever performed on the Bitcoin network. It also allows any new participant to audit the accuracy of the present status quo of the network. Upon joining, they rebuild the set of balances by applying each block in the right order, and will finally arrive in agreement with the rest of the network.</p>

CC BY-SA 3.0
2015-12-16T11:01:08.373Z
2015-12-16T11:14:16.853Z
2015-12-16T11:14:16.853Z
Murch
<p>The 15-second spiel:</p>

<p>Blockchain = a distributed (shared) append-only ledger, where each node in the network has the same copy of it. 
This ledger contains references to every transaction that has ever occurred on the network which is secured by the mining network, which validates and confirms those transactions.
The ledger is publicly viewable via a 'block explorer' to prove that a transaction took place or that an address (public key) has a certain balance, however encryption keeps that information obscured in the form of hashes and hash pointers.
Because the ledger is shared and encrypted, any attempt to alter the data inside of it would require an attacker to simultaneously hack each node of the network and overcome the encryption. Even if it could be attacked, due to the nature of hash functions, the tampering would be evident.</p>

CC BY-SA 3.0
2015-12-15T19:02:52.770Z
2015-12-16T01:27:29.760Z
2015-12-16T01:27:29.760Z
user10405
<p>A block chain is a permanent record of transactions in "Bitcoin," (an alternative cybercurrency). Once created, the record basically cannot be altered (giving the currency its validity. The verification process takes place when users validate the transaction electronically. Once this happens, a process is set in motion that is impossible to overturn except by 51% of worldwide users).</p>

<p>The system is protected by "hashes," which are encrypted. It is difficult, though not impossible to break into the system, but the result would be so evident than any illegitimate changes to the system can be detected and cancelled.</p>

CC BY-SA 3.0
2015-12-15T20:34:56.493Z
2015-12-15T20:34:56.493Z
Tom Au
<p>I did a lot of intensive research on how the Blockchain actually works. I understand the machinery but it's really difficult to explain this to a layman. Could someone provide the simplest of explanation that can be comprehended by any person,  whether or not he/she is a tech enthusiast.</p>

CC BY-SA 3.0
2015-12-15T18:37:48.280Z
Relevant: http://bitcoin.stackexchange.com/questions/168/what-is-the-blockchain http://bitcoin.stackexchange.com/questions/12427/can-someone-explain-how-the-bitcoin-blockchain-works https://en.bitcoin.it/wiki/Block_chain
Charles S
CC BY-SA 3.0
2015-12-15T22:07:48.793Z
I feel like the problem here is the assumption that bitcoin is more complicated than the financial systems that we already have. It's not -- it's just that most people are well in the dark about many large parts of our financial systems, and aren't even aware that they are in the dark about them. In that case, explaining bitcoin becomes about understanding your audience -- in this case "laymen" -- and what's relevant to them. It's entirely possible that most of what you're trying to explain  beyond "it's electronic" money is irrelevant to most of your audience not composed of tech enthusiasts.
John Henry
<blockchain>
How does the blockchain work, explained in layman terms?
Farhan Haque
# How does the blockchain work, explained in layman terms?

(Asked by: username_0 on 2015-12-15)

I did a lot of intensive research on how the Blockchain actually works. I understand the machinery but it's really difficult to explain this to a layman. Could someone provide the simplest of explanation that can be comprehended by any person, whether or not he/she is a tech enthusiast.

**Tags:** blockchain

> **Comments:**
> **username_1**: Relevant: http://bitcoin.stackexchange.com/questions/168/what-is-the-blockchain http://bitcoin.stackexchange.com/questions/12427/can-someone-explain-how-the-bitcoin-blockchain-works https://en.bitcoin.it/wiki/Block_chain  
> **username_2**: I feel like the problem here is the assumption that bitcoin is more complicated than the financial systems that we already have. It's not -- it's just that most people are well in the dark about many large parts of our financial systems, and aren't even aware that they are in the dark about them. In that case, explaining bitcoin becomes about understanding your audience -- in this case "laymen" -- and what's relevant to them. It's entirely possible that most of what you're trying to explain  beyond "it's electronic" money is irrelevant to most of your audience not composed of tech enthusiasts.  

---

## 3 answers

### Answer by username_3 on 2015-12-16. Score: 2 | Accepted answer

The purpose of the blockchain is to create agreement about the ownership of balances.

**The problem** is that if everybody was creating their own records of transactions they witness, the various records would be in different orders and any conflicting transactions would cause a split in what is considered true. At any point of time it would be very unlikely for any two sets of records to match completely.

**Traditional money services** solve this by having a trusted entity as the arbitrator and sole source of truth.

Bitcoin solves this differently: Each participant collects all transactions they hear about and repeatedly proposes these packaged as a set of updates. We call these sets of balance updates **blocks**. Instead of having a sole source of truth, the network holds a lottery to designate one of these blocks as the commonly accepted new status quo of the balances. As each block refers to the previous commonly accepted network state and by its acceptance creates a new commonly accepted network state, the blocks create the eponymic chain of commonly accepted states.

The resulting **blockchain** contains the record of every transaction ever performed on the Bitcoin network. It also allows any new participant to audit the accuracy of the present status quo of the network. Upon joining, they rebuild the set of balances by applying each block in the right order, and will finally arrive in agreement with the rest of the network.


---

### Answer by username_4 on 2015-12-15. Score: 1

The 15-second spiel:

Blockchain = a distributed (shared) append-only ledger, where each node in the network has the same copy of it.
This ledger contains references to every transaction that has ever occurred on the network which is secured by the mining network, which validates and confirms those transactions.
The ledger is publicly viewable via a 'block explorer' to prove that a transaction took place or that an address (public key) has a certain balance, however encryption keeps that information obscured in the form of hashes and hash pointers.
Because the ledger is shared and encrypted, any attempt to alter the data inside of it would require an attacker to simultaneously hack each node of the network and overcome the encryption. Even if it could be attacked, due to the nature of hash functions, the tampering would be evident.


---

### Answer by username_5 on 2015-12-15. Score: 0

A block chain is a permanent record of transactions in "Bitcoin," (an alternative cybercurrency). Once created, the record basically cannot be altered (giving the currency its validity. The verification process takes place when users validate the transaction electronically. Once this happens, a process is set in motion that is impossible to overturn except by 51% of worldwide users).

The system is protected by "hashes," which are encrypted. It is difficult, though not impossible to break into the system, but the result would be so evident than any illegitimate changes to the system can be detected and cancelled.


---

