Why blockchain is better

The idea of hundreds or thousands of computers storing the same file does sound a bit strange at first, doesn't it? It wouldn't be a surprise if your first thought was redundancy. But such redundancy provides security and ensures there is no central point of failure in the entire system. It protects from attempts to manipulate the system by bad actors.

This in turn provides the opportunity to eliminate any centralization or, in other words, to cut out the middlemen. Such decentralized blockchains work through a consensus mechanism or algorithm. There are different types of consensus algorithms and we'll cover the main ones later on in the book.

For the moment, it's important to understand that these consensus algorithms enable the different nodes (which are basically the participants in the network) to verify new transactions and maintain a uniform view of the up-to-date state of the ledger.