---
# System prepended metadata

title: Chapter 1 - Essence of Blockchain
tags: [Module 0]

---

# Chapter 1 - Essence of Blockchain

###### tags: `Module 0`


### Intro
Blockchain has the potential to change the world as we know it - in the next few chapters we'll find out why and how.

### Study time

In your life, you interact with money daily and the bank keeps track of your balance for you. It is your money, but it's tracked and handled by a third party, the bank. You put trust into the bank that they'll not misuse your money.

**What if one day a bank decides to betray your trust and uses up your money to save itself from bankruptcy? (this has happened, over and over again.)**

This **can not** be the case for Cryptocurrency, because **YOU own and control your money** when it's on the blockchain.

A cryptocurrency is a form of money, a form of digital money.

Where there's money, there needs to be a way to keep track of it - in case of cryptocurrencies, **blockchain does that for you**.
**Blockchain at its core is a digital ledger.**

#### Blockchain as a ledger:
A ledger is nothing but a collection of records or transactions. 
For example, your bank account is simply a ledger that logs all the transactions you make. And the result of all these transactions reflects on your balance.

Similarly, blockchain keeps a track of all the transactions that happen over it.

A transaction is basically an event where cryptocurrency is being sent from one account to another, along with some data. This data could be absolutely anything, text, image, etc.


#### But what's special about blockchain if it's doing the same thing that our banks do?
Blockchain is a **trustless ledger**.

Now, let's understand what we mean by **trustless**.
Blockchain **doesn't completely remove** the need for you to depend on an institution, rather it distributes the responsibility among multiple individuals(nodes).
Multiple people(nodes in a blockchain) have a copy of the ledger and are verifying the validity of each transaction on the ledger.

This takes away the power of playing God from one institution, hence, you can **trust your assets are safe in your crypto wallet**.

> A Crypto Wallet is simply a software that allows you to send and recieve cryptocurrency, and monitor your balance.

Because in this system we're relying on everyone, we effectively rely on no one.

This brings me to my next point, blockchain is **distributed**, which makes it so powerful. 
It essentially removes a single point of failure and has mechanisms to ensure that the data isn't being tampered with.

Plus, it doesn't let you delete or edit previous transactions from the blockchain. 
Once it's on the blockchain, it's always going to be there.
Think about it, it's a powerful concept.
If the history can't be manipulated, it makes blockchain basically **tamper-proof**.

#### Blockchain in cooperation problems:
Blockchain solves the problem of cooperation between humans by truly **distributing responsibility** throughout the whole system, hence, reducing the risk and possiblities of individuals or institutions with malicious intent pulling off one over the rest of us.

> Vision: Imagine you have a Cryptobot(a robot), and you give that Cryptobot a crypto wallet. Then, add Artificial Intelligence to the mix. Now, the Cryptobot can literally send and recieve transactions for itself. 
That's a powerful concept to think about, blockchain doesn't care who is on either side of the transaction, literally a robot can make transactions for itself.

When you think about it, most of the societies problems are rooted in the **problem of cooperation**.

The cooperation problem blockchain aimed to solve with its first application, cryptocurrency, was the cooperation between financial institutions(banks, lenders, etc) and the people - but that was just the first application.

Think of the endless problems out there that are waiting to be solved, and you can be the one who comes up with a decentralized application(DApp) which might be the solution.

How exciting!?✨
