Blockchain is a decentralized, distributed public ledger used to record data and transactions across a network of many computers. Because the data is stored in “blocks” across the network, it is immutable and tamper-proof because the data cannot be changed retrospectively as doing so would be traceable. In other words, each piece of data can only have a single owner. Blockchain technology underlies cryptocurrencies such as Bitcoin, Stellar, Ethereum, and Ripple..
Here’s a good analogy to better understand the blockchain:
“Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain.”
The blockchain monitors and verifies a given transaction (and its uniqueness) by calling on a decentralized network of nodes, which then vote on the order that transactions have occurred. Once the nodes reach consensus that all recent transactions are unique, they are sealed into a block.
What then is a block? A block is simply a record of those new verified transactions. A block is formed and added to a chain, preserving the set immutable records. This verified information is constantly added to the database and updated instantly.
This infographic summarizes nicely:
The blockchain uses distributed storage, meaning it exists in millions of locations simultaneously. This provides extra security, and makes the data harder to hack.
The blockchain has been predicted to disrupt a number of industries, including but not limited to:
- Financial and banking
- Cyber security
- Real Estate
- Supply chain management
- Cloud Storage
- Payroll and recruiting 😉
If you’re interested to learn more about the disruptive potential of the blockchain, we recommend watching this Ted Talk: