Before we give a clear definition of What Is Blockchain, let’s first get into the different aspects of Blockchain Technology.
WHAT IS A DISTRIBUTED LEDGER?: In its core, the database behind blockchain is a ledger containing all transaction records. The ledger is distributed, which means there isn’t a single central point where the records are saved. All participants of the system can have an up-to-date copy of the database. It provides a transparent way where transactions between two parties are verifiable and are stored permanently. Any transaction of ownership can be stored into the blockchain.
WHAT ARE THE MEASURES AGAINST MANIPULATION AND FORGERY?: Verification of all transactions happens in the ledger itself. The information is encrypted and in many blockchain applications the participants own (a part of) the ledger. In every case, a full version of the ledger us owned by multiple users within the blockchain. These nodes are called Full Nodes. If anyone tries to push false information to the ledger, the changes will be blocked by all other copies of the ledger.
WHO OWNS A BLOCKCHAIN?: Nobody in particular, in other words, its users. The source code has been published on the internet, allowing anyone to create a blockchain. In the case of so called “private blockchains”, ownership lies with the company that creates and maintains them. A private blockchain is generally used in order to achieve a particular business goal.
WHO DOES THE BOOKKEEPING?: The bookkeeping necessary to maintain a blockchain requires computational power. A nifty way of dealing with this challenge is the method that Bitcoin uses, which is a blockchain-based virtual coin. In the Bitcoin blockchain, making you a so called “Miner”, you are now a Full Node as well, meaning that you carry a copy of the ledger. Your computational power is used to calculate and solve the cryptographic puzzles, which is necessary to validate transactions and add them to the ledger. This work costs computational power, which implies electricity costs as well as internet traffic. Performing this work eventually results in the creation of new Bitcoin, which will be rewarded to the successful miners.
HOW MANY USERS CAN A BLOCKCHAIN HAVE?: In principle, a blockchain can grow as large as needed. The size of the ledger is prone to grow almost exponentially. In order to download the full Bitcoin blockchain, you need to download over 126GB of data.
WHAT CAN BLOCKCHAIN BE USED FOR?: The most known application for Blockchain technology is to handle financial transactions where Bitcoin is the most renowned example. Other uses include Smart Contracts; Identity verification without storing PII (Private Identifiable Information), Digital Rights Management and Content Sharing, Stock trading, and even Storage.
SO WHAT IS BLOCKCHAIN TECHNOLOGY?: The definition of Blockchain is distributed ledger database that is used to maintain a continuously growing list of records called blocks. By design, blockchains are inherently resistant to modification of the data. With technology, we are seeing its application in the Currency sector, Trade Finance, Voting, Property Rights Management, Identification and various other industries.
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