Let’s review the main functional design objectives that a Blockchain should have.
P2P DATA DISTRIBUTION
We want to prevent some central server to host the whole chain, distributing data and copies of it among participants. In here all nodes have a complete copy of the whole chain. Notice you can still have distributed data with centralized access.
Distribution brings transparency: everybody can see and check the whole chain. But on the other side is the privacy thing, which is partially solved through “pseudonymity”. Each user connects with a pseudo and you don’t know which human is assigned to each user. And also the amount of information to keep which only keeps growing.
Some networks are distributed by centralized: Napster kept the list of the files in the central server and the logic to maintain the network, making it easier to delete.
If you manage to distribute your data and to decentralize the modification of it simultaneously it becomes much harder to corrupt. If each and every node stores the data and decides what modifications apply then the network becomes incorruptible.
The problem now becomes the consensus algorithm. To prevent several nodes from modifying data at the same time, you have 1 random node to change and the rest take ‘their truth’ from that point (a point that changes every time). This algorithm resides in each node.
This means preventing the rewriting of the chain. You can just add transactions, and then you can track back to the beginning. There is no way to alter any of the parts of the chain without the Blockchain losing consistency.
This way you can connect any node to the net, and then it starts to request changes without the need to trust it or its user. And this is where the key part comes.
Maintaining consistency in a decentralized, distributed and immutable database where all the nodes trust each other is relatively easy. But maintaining the same guarantees in a system where nodes cannot be controlled, where their number is not known in advance and where their interest can potentially diverge is the real feat.
This where crypto economics and game theory comes to the rescue.