Blockchain is a software application designed to generate decentralized databases.

The device is entirely “open source”, and therefore 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 with us since 2008, rendering it around ten years old (ancient in computing terms).

The most important point about “blockchain” is that it was made to generate applications that don’t require a central data processing service nft project. Which means if you’re employing a system build on top of it (namely Bitcoin) - your data is going to be stored on 1,000’s of “independent” servers all over the world (not owned by any central service).

What sort of service works is by developing a “ledger” ;.This ledger allows users to generate “transactions” together - getting the contents of those transactions stored in new “blocks” of every “blockchain” database.

With respect to the application creating the transactions, they must be encrypted with various algorithms. Since this encryption uses cryptography to “scramble” the data stored in each new “block”, the term “crypto” describes the procedure of cryptographically securing any new blockchain data an application may create.

To fully know the way it works, you should appreciate that “blockchain” is not new technology - it just uses technology in a slightly different way. The core of it is a data graph called “merkle trees” ;.Merkle trees are essentially ways for computer systems to store chronologically ordered “versions” of a data-set, letting them manage continual upgrades to that data.

The reason this is important is because current “data” systems are what could possibly be called “2D” - meaning they don’t have any solution to track updates to the core dataset. The info is simply kept entirely because it is - with any updates applied straight to it. Whilst there’s nothing wrong with this particular, it will pose an issue in that this means that data either needs to be updated manually, or his extremely tough to update.

The solution that “blockchain” provides is basically the creation of “versions” of the data. Each “block” included with a “chain” (a “chain” being fully a database) gives a list of new transactions for that data. Which means if you’re in a position to tie this functionality into a system which facilitates the transaction of data between several users (messaging etc), you’ll be able to create an entirely independent system.

This is exactly what we’ve seen with the likes of Bitcoin. Contrary to popular belief, Bitcoin isn’t a “currency” by itself; it’s a public ledger of financial transactions.

This public ledger is encrypted in order that only the participants in the transactions are able to see/edit the data (hence the name “crypto”)… but much more, the fact that the data is stored-on, and processed-by 1,000’s of servers all over the world means the service can operate independently of any banks (its main draw).

Obviously, difficulties with Bitcoin’s underlying idea etc aside, the underpin of the service is that it’s basically a method that works across a network of processing machines (called “miners”). These are all running the “blockchain” software - and work to “compile” new transactions into “blocks” that keeps the Bitcoin database as up to date as possible.

Whilst many people have blindly pledged support for blockchain, it’s actually got numerous vulnerabilities - most notably that it relies almost entirely on the encryption algorithms employed by its various applications. If one of these algorithms fails, or users are compromised at all, the entire “blockchain” infrastructure could suffer as a result.