Blockchain is a piece of software designed to create decentralized databases.
The system is entirely “open source”, meaning that anyone is able to view, edit and propose changes to its underlying code base.
Whilst it has become increasingly popular thanks to Bitcoin’s growth – it’s actually been around since 2008, making it around a decade old (ancient in computing terms).
The most important point about “blockchain” is that it was designed to create applications that don’t require a central data processing service. This means that if you’re using a system build on top of it (namely Bitcoin) – your data will be stored on 1,000’s of “independent” servers around the world (not owned by any central service).
The way the service works is by creating a “ledger”. This ledger allows users to create “transactions” with each other – having the contents of those transactions stored in new “blocks” of each “blockchain” database.
Depending on the application creating the transactions, they should be encrypted with different algorithms. Because this encryption uses cryptography to “scramble” the data stored in each new “block”, the term “crypto” describes the process of cryptographically securing any new blockchain data that an application may create.
The bitcoin is far and Cryptogames are more popular than its root technology, block chain people can get mixed up between the two.
To fully understand how it works, you must appreciate that “blockchain” is not new technology – it just uses technology in a slightly different way. The core of it is a data graph known as “merkle trees”. Merkle trees are essentially ways for computer systems to store chronologically ordered “versions” of a data-set, allowing them to manage continual upgrades to that data.
The reason this is important is because current “data” systems are what could be described as “2D” – meaning they don’t have any way to track updates to the core dataset. The data is basically kept entirely as it is – with any updates applied directly to it. Whilst there’s nothing wrong with this, it does pose a problem in that it means that data either has to be updated manually, or his very difficult to update.
The solution that “blockchain” provides is essentially the creation of “versions” of the data. Each “block” added to a “chain” (a “chain” being a database) gives a list of new transactions for that data. This means that if you’re able to tie this functionality into a system which facilitates the transaction of data between two or more users (messaging etc), you’ll be able to create an entirely independent system.
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