Blockchain is a technology that has been developed for the first time for cryptocurrencies.
Blockchain is a base without central storage, control, and management unit and was initially called the “Next Generation Internet.” Just like the Internet, blockchain is a networked database. However, in blockchain, it is not the servers but the network participants that store the database on their disks. This revolutionizes the way transactions are concluded, settled, and recorded. Blockchain technology is based on such values as security, privacy, trust, decentralization, and transparency.
Blockchains are used to transmit and store information about transactions that have been concluded on the Internet. These transactions occur in the form of consecutive data blocks.
One block contains information on a specific number of transactions. When it is saturated with information, a new data block is created, and then another and another one, making a kind of chain of blocks – hence the name Blockchain.
Each computer in the network can participate in the transmission and authentication of transactions without central management systems to verify them. The essence of blockchain is to maintain a shared and collective accounting book of transactions dispersed throughout the network. This book, although open to everyone, is fully protected against unauthorized access. The entire transaction history is public but accessible only within the access rights framework for a specific user. This means that you can check and verify the whole transaction history while protecting your privacy.
What is more, the blockchain is cryptographically protected. All entries made in the database are verified according to the adopted consensus mechanism, e.g., using processors’ power. The process of cryptographic network security using calculations made by many millions of processors worldwide makes the bitcoin network largely decentralized and resistant to attacks.
For more information about blockchain, see our blog posts.