5 things you should know about blockchains

By April 11, 2016Bitcoin Business

Talk of blockchain technology is everywhere, it seems — but what is it, and what does it do? 1. Don’t call it "the" blockchain

The first thing to know about the blockchain is, there isn’t one: there are many. Blockchains are distributed, tamper-proof public ledgers of transactions. The most well-known is the record of bitcoin transactions, but in addition to tracking cryptocurrencies, blockchains are being used to record loans, stock transfers, contracts, healthcare data, and even votes. [ An InfoWorld exclusive: Go inside a security operations center . | Discover how to secure your systems with InfoWorld’s Security newsletter . ] 2. Security, transparency: the network’s run by us

There’s no central authority in a blockchain system: Participating computers exchange transactions for inclusion in the ledger they share over a peer-to-peer network. Each node in the chain keeps a copy of the ledger, and can trust others’ copies of it because of the way they are signed. Periodically, they wrap up the latest transactions in a new block of data to be added to the chain. Alongside the transaction data, each block contains a computational "hash" of itself and of the previous block in the chain.

Hashes, or digests, are short digital representations of larger chunks of data.

Modifying or faking a transaction in an earlier block would change its hash, requiring that the hashes embedded in it and all subsequent blocks be recalculated to hide the change. That would be extremely difficult to do before all the honest actors added new, legitimate transactions — which reference the previous hashes — to the end of the chain. 3. Big business is taking an interest in blockchain technology

Blockchain technology was originally something talked about by antiestablishment figures seeking independence from central control, but it’s fast becoming part of the establishment: […]

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