Blockchain technology is a rapidly evolving and maturing technology that has the potential to drastically alter the business and social landscape.
Most people say that blockchain is a form of distributed ledger technology (DLT), we beg to differ. Though the technology has some similarities, a blockchain is far a more advanced and decentralized system than a distributed ledger.
Blockchain technology provides a way of synchronizing a singular state of the system across multiple participants in the network with each having the exact same information and records. The blockchain is jointly maintained and controlled by a distributed network of computers, which are known as miners. This means that no single entity can tamper with records and does away with a single point of failure.
The blockchain is a network system which employs an encryption method known as cryptography and uses a set of mathematical calculations called algorithms to create and confirm a constantly growing information structure of which the basics are built on blocks of data.
These blocks of data are useless if they are not connected to each other so each new block references older blocks thus making a chain of blocks of which the name blockchain is derived.
This constantly stream of blocks can only add information thanks to the addition of new blocks. Existing or past information cannot be deleted or changed because any attempt at changing information means changing past blocks which means that the entity attempting to change to change past information creates a different invalid chain
Blockchain has many practical uses, among the current uses of blockchain is to serve as the underlying base on which cryptocurrency and transactions are built on . Blockchain can exhibit different attributes and cover a wide array of means to participate that can range from being completely open and permissionless, to permissioned or private blockchains.
One big change that an open permissionless blockchain has over traditional networks like the Facebook or Twitter is that there is no central owner of this network and software, everything is distributed among the miners which prevents the centralized authority from abusing its power and also prevents the blockchain from failing if a miner goes down.
Any person with a computer can participate in an open permissionless blockchain. Participants can join or leave the network at any time without needing to seek acceptance by an organization or individual, all they have to do to add mine, transactions or commands is to have a computer where software to interface with the blockchain has been installed. Newer ways to interface with blockchain do not even need software to be installed and can be done thru any browser which includes browsers on mobile devices.
On the other hand there are private or permissioned blockchains that rely on a central authority or group that grants permission for participation in the blockchain. Though this centralizes some of the decision making process and might skew membership in favor of cartels this setup is still miles better in terms of decentralization and redundancy compared to traditional systems. It is assumed that most corporations or traditional businesses looking to deploy their own blockchains will do so with private or permissioned blockchains first to serve as a bridge between traditional centralized systems and the new paradigm of decentralized blockchains.