Generalities

A blockchain is a distributed database or ledger that is shared among the user of a computer network. It stores any kind of information in digital format and is best known for its crucial role in cryptocurrency systems, like Bitcoin, for maintaining a secure and decentralized record of transactions.

How does it works

• When a transaction occurs, it is grouped with other transactions to create a "block" of transaction.
• The transaction block is then sent to the network’s nodes. The node are the specials users, responsible for validating the transactions, they get coins in exchange. 
• Once verified, the block is timestamped and given a unique identifier (called hash). It also references the hash of the previous block, forming a chain.
• The new block is then added to the blockchain, visible to all participants. The update is irreversible.

It is easy to infer how much coins are own by every user since everyone has access to all transaction that has ever occurred. 

Key Characteristics

• Decentralization: Unlike traditional databases, blockchain distributes the data across a network of computers (nodes), reducing the risk of centralized control or failure.

• Transparency and Immutability: Once data is recorded on a blockchain, it is almost impossible to change. We won't dive into the details here, but basically, you can't generate money out of nowhere, and you can't reverse a transaction either.

• Consensus Mechanisms: Blockchain employs consensus models like Proof of Work (PoW) or Proof of Stake (PoS) to agree on the state of the ledger. These mechanisms help in validating transactions without the need for a central authority, ensuring security and trust in a decentralized environment.

Vocabulary

Those are terms you will often encounter during your journey :

• Coins / Tokens : Coin are given to miners when they validate block, giving incentive for them to give lend  computing power to the network in order to validate transactions.
• Smart Contracts: These are self-executing contracts with the terms directly written into code. They run on blockchain, enabling credible transactions without third parties.
• Governance tokens or DAO tokens :  It a special kind of token allowing holders to votes for updates on the blockchains or to trigger smart contracts. It's often used by projects to gives their audience the ability to give their opinion on what should be implemented.

Takeaways

In summary, blockchain is a transformative technology that offers a decentralized, secure, and transparent way to record transactions and manage data. While it originated with cryptocurrencies, its potential applications are vast and varied, extending to many sectors of the economy and society. However, challenges like scalability and energy consumption need to be addressed as the technology continues to evolve.