What is Blockchain?

CRITICAL FOR SHARING ECONOMY

Blockchain is a mystery to many but simply put, it records and stores data in a secure and immutable way.

Originally, blockchain was just the computer science term for how to structure and share data. Today blockchains are hailed the “fifth evolution” of computing. Blockchains are a novel approach to the distributed database. 

This technology has five underlying tenets:

    • A distributed database — information is not stored in a centralized database and no one computer or organizer can own the chain
    • Peer-to-peer transmission of information — information and communication is shared directly between peers and not through a “central node:
    • Transparency through pseudonymity — transactions only occur between blockchain addresses, which consist of 30+ alpha-numeric characters and can be either anonymous or used as a proof of identity
    • Immutable records — data cannot be altered because they are linked to every transaction in an open-source and irreversible chain
    • Computational logic — this digital leger can be automated to trigger transactions between nodes (computers or servers)

      Blockchain technology was first used to record transactions for the cryptocurrency, Bitcoin, and is a continuously growing list of “blocks” that record the transactions.

      Since its inception in 2008, blockchain’s open-source and decentralized leger has primarily been used in the financial services industry, but other industries have followed suit, including health care, various supply chains, and energy trading.

      A public blockchain has no restrictions to access and can be accessed by anyone with an internet connection. Bitcoin is one of the most commonly known public blockchains. Private blockchains require permissions from network administrators in order to gain access and are often used in finance and government services. 

      Blockchain technology reduces the amount of fraud because of its real-time recording of data and the unchangeable nature of the ledger once the transactions have been recorded.

      This technology has nearly unlimited applications in every industry that shares and distributes information and while widely misunderstood because of the public nature of some blockchains, it is currently the most secure way to transmit and store data.