A “blockchain” is a public database that is updated and shared across many computers on a network.
Blocks refer to data and the state of that data stored in consecutive groups as blocks. For example, if any cryptocurrency is sent through a blockchain network, the data of the transaction needs to be added to a block for the transaction to occur.
Chain refers to the fact that each block cryptographically references its predecessors through its unique code. In this way, the data of a block cannot be modified without modifying all the blocks that follow it. To change the data of a block, the entire network would have to agree.
For a new block to be accepted, each computer on the network must accept the new blocks and the existing chain. These computers are known as “nodes,” and they ensure that everyone on the blockchain works with the same data, fulfilling the consensus mechanism.
There are various blockchain networks, among which we find Bitcoin, Ethereum, Solana, Dogecoin, Chia, and XRP blockchains, each with its advantages and disadvantages. The Bitcoin blockchain has the most value locked on it, accounting for around 40% of the world’s cryptocurrency value. However, the Ethereum network is the most popular in terms of transactions. In 2021, Ethereum surpassed Bitcoin in the number of transactions. Ethereum is the base network for many cryptocurrencies and most NFTs.
The Solana blockchain intends to function as a foundation for cryptocurrencies and distributed applications. Solana and Ethereum support executable code in the form of smart contracts. Solana’s key advantage is its unique Proof-of-History consensus mechanism that allows the network to process tens of thousands of transactions per second. In comparison, Bitcoin supports 7 tps (transactions per second), and Ethereum supports 15 tps. Also, Solana charges much lower commissions than Ethereum, so its popularity is multiplying.
