While the original concept of a blockchain came from the Bitcoin whitepaper in 2008, the concept has been expanded since to include many more features. The name blockchain largely refers to the structure of the technology. Blocks contain data that represents transactions. When a new block is added, it contains a unique signature or ‘hash’ representing the previous block. This process creates an immutable chain of data and makes it impossible to alter any data without breaking the chain.
Records on a blockchain are secured through cryptography. Network participants cryptographically sign transactions, creating a digital signature. If a record is altered, its signature will change, which makes it possible for network participants to easily identify fraudulent activities.
Blockchains are decentralized and distributed across peer-to-peer networks that are continually updated to reflect every transaction. Because they are not contained in a central location, blockchains do not have a single point of failure and cannot be changed by hacking a single computer. It would require massive amounts of computing power to access every node, or at least the necessary 51 percent majority, of a blockchain and alter each node at the same time.
Because blockchain data is stored across an entire network, they provide an ideal solution for sharing data on a peer-to-peer network. With a blockchain at its core, a network can operate without any single trusted authority, and nodes (computers) can come and go as necessary without compromising the system.
As a result of this unique architecture, blockchains are quickly being adopted across a wide range of sectors from energy to supply chain management to online content creation. Wherever there is a need to share data among a large network of peers, there may be an opportunity for a blockchain.
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