We’ll cut through the hype and mystery, explain what blockchain is, and help you understand if your business could benefit from becoming a blockchain startup.
Blockchain Business Technology, Briefly Explained
At its simplest, blockchain technology allows for the sharing of information and transactions between multiple people, businesses, software and others. Blockchain technology is exciting because it’s a digitized, decentralized, verifiable, immutable ledger. Let’s dig into what each of those terms means.
All blockchain frameworks run digitally, typically across the internet and cloud-based services. All the technology involved with a specific blockchain will send, receive, process and verify information digitally.
Blockchain technology does not rely on the central control of one particular organization or technology setup. Instead, the blockchain can be accessed by any properly-authorized machines and users from anywhere. This means multiple computers contribute to the efficient running of the blockchain.
A specific blockchain “ledger” contains a record of all the transactions and information that’s ever been shared across the blockchain network. All of this data is independently verified for truthfulness and accuracy by multiple computers. This means it’s practically impossible for an individual user or machine to try and “fool” a blockchain network by introducing fraudulent or erroneous information.
This means once a record has been written to the blockchain and verified, it can never be changed. Anything that’s recorded into a blockchain network is fixed at that moment in time. Although records can be amended subsequently, any changes would be captured as separate transactions. This makes it easy to audit blockchain information and transactions.
The ledger is simply the place where all your blockchain information and transactions are recorded. It’s the functional equivalent of a database, except built around blockchain technology. As new transactions and information are added, they are appended onto the end of the blockchain ledger, so any connected machines can get the latest information.
Where does the name blockchain come from?
Well, every time a transaction is captured, recorded and completed it forms a new “block.” Each new block is connected to the previous one to create a “chain,” hence “blockchain.”