Blockchain is a database of transactions that is shared across a digital network of users. Unlike a traditional database, a blockchain does not rely on any single entity to verify and store transaction data. Instead, the data is maintained across a digital peer-to-peer network. A peer-to-peer network allows network users to communicate and access the database’s data.
A blockchain uses network users’ computers , called nodes, to update, maintain, and secure data records. The nodes run a series of checks to verify each requested transaction. After a transaction has been verified, it is added to a block, a record of transactions occurring around the same time. Each block is timestamped and attached to the existing chain of blocks that make up the database. The blockchain contains a record of all transactions ever processed within the network. Each node holds an updated copy of that record.
In 2009, an anonymous person or group using the pseudonym (fictitious name) Satoshi Nakamoto created bitcoin , the first decentralized (not controlled by any one authority) cryptocurrency. Bitcoin was the first real-world application of blockchain technology. Like a traditional accounting ledger, a blockchain can be used to keep track of monetary transactions. However, unlike a traditional ledger, a blockchain keeps all records visible and accessible to all network users. The blockchain can also prevent users from counterfeiting false cryptocurrency tokens and from creating dishonest transactions.
Blockchains have been created for a variety of industrial and other uses in addition to cryptocurrency maintenance. They are used to track shipping containers, facilitate legal agreements, and even authenticate diamonds. Blockchains are also used to settle high-value transactions between banks. Many scholars believe that in the future, smart sensors, artificial intelligence , and other technologies will become increasingly incorporated into blockchains. Such technology could eventually be used in the development of the Internet of Things, the network of devices, appliances, and other physical objects connected to one another via the internet.
