What is Blockchain Technology? An overview of what blockchain technology can do.

Introduction

In its most basic form, blockchain is a digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.

How Does Blockchain Work?

Envision a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed so that each cell within the spreadsheet updates on its own and the entire spreadsheet reconciles simultaneously. That is a basic understanding of blockchain.

Information held on a blockchain exists as a shared — and continually reconciled — database. This is a way of using the network that has obvious benefits. The blockchain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralized version of this information exists for a hacker to corrupt. Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet.

Blockchain technology was first outlined in 1991 by Stuart Haber and W. Scott Stornetta, two researchers who wanted to implement a system where document timestamping would be impossible to tamper with. But it wasn’t until almost two decades later, with the launch of Bitcoin in January 2009, that blockchain had its first real-world application.

Conclusion

The practical consequence of this breakthrough is that blockchain provides an incorruptible digital ledger of transactions that everyone on the network can see. This ledger is not stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralized version of this information exists for a hacker to corrupt or delete — hosted by millions of computers simultaneously, its data is accessible to anyone on the internet. Consequently, anything that can be recorded electronically can be stored securely and permanently on a blockchain.