An example of a blockchain:

Assume a data file that is spread many times in a network of computers, and the data is regularly updated. A blockchain keeps the data as a shared database and continually updates the information through each network node. The database in not held in a single node like centralized networks, it is shared by millions of computers at the same time. Hence the data is available to anyone on the network and makes the information public, easily verifiable with guaranteed security.

Google Docs is an example of a blockchain which enables a number of users have access to the same document and make revisions to it simultaneously. While in traditional way, this can be done by sending the document to other parties one by one and wait (being locked out) until they are done editing it. It means that two or more users won’t be able to work on a document altogether. In the other words, blockchain shares the data instead of transferring it back and forth.

Centralised traditional system and blockchain

Some advantages:

  • Robust, as there is no main party that can control the data
  • Users are all in control of their own information
  • Durable and safe: since it’s a distributed system (not centralized) which stores information across a network of personal computers it is difficult, expensive and very unlikely to be hacked.
  •  Transparency-Blockchain is always open source and all users can modify it as their own fit. It makes it impossible to be deleted or alerted.
  • Provides faster transactions with lower costs by removing the need for a trusted third party in any transaction.


Network size and complexity are two main drawbacks of blockchains.

Decentralized networks are new technologies and require entirely specialized development process to optimize the available codes to prevent, detect and mitigate bugs in blockchain system.

In addition, each transaction is added as a block to the chain which increases the network size continuously. Since all the nodes (millions of computers) in a blockchain network repeat a same operation, such as verifying the same transactions and recording the same data into a blockchain, it makes it computationally expensive and slow.


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