Blockchain in simple words

The concept of “Blockchain” began to be actively discussed with the growing popularity of cryptocurrency. It is believed that this technology can be a real breakthrough in the field of finance and secure databases. Blockchain in simple words is a chain of blocks, each of which has a timestamp, a link to the previous block and is stored on different computers. You can find a lot of useful information about blockchain on the News Blockchain website.

What is a blockchain

When investigating the question of what a blockchain is, first of all, they focus on such a feature that there is no single server in the system, the blockchain chains are distributed among users. The use of modern encryption algorithms allows protecting individual records belonging to a particular person from copying/editing by other users of the system.

Blockchain is often associated with bitcoin, but the technology can be applied in many directions. Blockchain technology concept was proposed by Satoshi Nakamoto in 2008, and first applied in practice when bitcoin appeared in 2009. Because of its origin, it is classified as a cryptocurrency transaction, but the scope of the technology is much wider.

The system works in the following way:

  1. The primary block is created and there is no record of the previous block.
  2. Each subsequent block contains information about the “parent”, the type of transaction, its own header used when generating the next block.
  3. System users see all the blocks, but have access only to their own.

Prospects for the development of block technologies are associated with the active development of cloud services, including online banking, Internet catalogs, systems for identification of access to corporate sites.

How blockchain technology works

Despite the distribution of blocks on the Internet, in fact, in a “public place”, encryption of access to each of them allows you to keep the data stored in them secure. The block chain itself can be freely transferred to any Internet user without risk of losing content. This is the basis for cryptocurrencies with a tangible value in national currency (euro, dollars, at current exchange rates).

It will be easier to understand what a blockchain is if you understand the intricacies of working with this system:

  • Any changes without confirmation by cryptographic keys will be rejected. This feature makes it easy to organize identity verification without visiting the office.
  • Private key transfer provides full access to the block (money and other assets). Thanks to this, it is easy to register transactions conducted via online resources.

The transfer of access to the blocks is automatic, based on the principle of digital signature – entered a code, confirmed the transfer of rights, and the process is completed. In addition to the financial sphere, such a system may be in demand when selling intellectual products such as books, programs.

Scopes of application

Taking into account how Blockchain works, cryptocurrencies (both popular bitcoin and its analogues) work according to the proposed scheme. But these spheres of application are not limited to it. The distributed system of data storage is of great interest for bank institutions, the state organizations providing the general access to databases like medical cards, pension charges.

Prospective directions of use of blockages:

  • Right of ownership (authorship).
  • Operations with raw materials, goods.
  • Verification of authenticity, confirmation of access rights.
  • Data management.
  • Means of electronic voting.
  • Online games.

Here you can find more information – News Blockchain.