- The blockchain technology achieved initial popularity
as a mechanism to record Bitcoin transactions
in a digital ledger.
Since then, it has also found use in managing supply chains,
banking, insurance, and other applications.
The term blockchain refers to a chain of blocks.
Think of them as digital records that are chronologically
linked to each other cryptographically.
Like the pages in a book, each block comes after
a previous one.
Each block contains some information.
For example, a transaction between parties A and B,
a medical record, or a land title.
It also includes a unique and cryptic identifier,
a time stamp about when it was created, as well
as the unique identifier of an earlier block
where some change to the earlier block such as change
in the ownership of the particular land resulted
in the creation of the current block.
The entire chain is copied and stored in a decentralized,
distributed, and often public network of computers.
The information in an earlier block cannot be changed
without changing the contents of all blocks
that came after it and a majority consensus
of the computers where copies of the blockchain are stored.
This makes tampering any record almost impossible.
Adding a new block also requires majority consensus
of the computers in the network.
The decentralized, distributed, chronological,
and majority-consensus features of a blockchain
coupled with reliance on cryptography make it
virtually immune to hacking, fraud, or the destruction
of any centralized server.
This is why blockchains are viewed as a highly
trusted method for storing records.