Blockchain: an overview
The simplest way to describe a blockchain is that it is a method to store data in blocks that are linked together in a chain.
Different types of blockchain
There are different blockchain types, but we are going to look at the best-known blockchain first: the public blockchain. Bitcoin, one of the first blockchain-based applications, uses a public blockchain. This structure is decentralised and open to anyone who wants to participate.
How does a blockchain work?
Blockchain technology is based on a decentralised system that can be compared to a digital ledger that manages data. All members of the blockchain network own a continuously updated and synchronised copy of this database. Each block stores data and is inseparably linked to the previous block. This creates a chain, a blockchain, where it is nearly impossible to change records. This security structure makes the technology attractive for many applications, including financial services, supply chains and the Internet of Things.
To ensure the information on the blockchain is correct, the technology relies on a consensus algorithm. In the case of Bitcoin, this means that (decentralised) computing power from all around the world validates the data of each new block.