Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.
One of the signature features of blockchain is that it is maintained across more than one computer.
The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable.
Because a blockchain is stored across a network of computers, it is very difficult to tamper with.
The Evolution of Blockchain
Blockchain was originally invented by an individual or group of people under the name of Satoshi Nakamoto in 2008.
The purpose of blockchain was originally to serve as the public transaction ledger of Bitcoin, the world’s first cryptocurrency.
In particular, bundles of transaction data, called “blocks”, are added to the ledger in a chronological fashion, forming a “chain.”
These blocks include things like date, time, dollar amount, and (in some cases) the public addresses of the sender and the receiver.
The computers responsible for upholding a blockchain network are called “nodes.” These nodes carry out the duties necessary to confirm the transactions and add them to the ledger.
In exchange for their work, the nodes receive rewards in the form of crypto tokens.
By storing data via a peer-to-peer network (P2P), blockchain controls for a wide range of risks that are traditionally inherent with data being held centrally.
Of note, P2P blockchain networks lack centralized points of vulnerability.
Consequently, hackers cannot exploit these networks via normalized means nor does the network possess a central failure point.
In order to hack or alter a blockchain’s ledger, more than half of the nodes must be compromised.
Looking ahead, blockchain technology is an area of extensive research across multiple industries, including financial services and payments, among others.