Blockchain Explained

Quite simply, blockchain is digital information (the block) stored in a public database (the chain).

Blocks store information about transactions, (ex. date time, dollar amount); who is participating in a transaction and what distinguishes them from other blocks. A single block can store up to 1 MB of data – a few thousand transactions.

A blockchain consists of multiple blocks strung together. For a block to be added to the chain four things must happen: a transaction must occur; the transaction must be verified; the transaction must be stored in the block; the block must be given a hash – a unique identifying code. At this point the block is publicly available.

When a user opts to connect a computer to the blockchain network, the computer receives a copy of the blockchain that is updated automatically when a block is added. Because each computer has its own blockchain copy, there isn’t a single account of events that can be manipulated by a hacker.

Security is enhanced as new blocks are stored linearly and chronologically. It is difficult to alter the block because it contains its own hash and the hash of the block preceding it.

An example of government use of blockchain technology is to store data about property exchanges. The blockchain can eliminate the need for scanning documents and tracking down physical files if property ownership is stored and verified as previously described.

Voting with blockchain can eliminate election fraud and boost turnout with each vote being store on the blockchain, making it nearly impossible to tamper with the data.

 

Summarized from investopedia.com

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