Blockchain is an open, distributed ledger that records transaction between two peers. It is managed by a peer-to-peer network, adhering to a protocol for communication between nodes. One breakthrough is that they have authentication through keys. Once the data is recorded in a block, it can never be altered by anyone. The block serves as the ledger for all the transactions happening on the network.
Blockchain is a decentralized ledger of transactions, where every network participant validates the transaction so that the data stored is immutable and cannot be forged.
As a distributed ledger, blockchain can manage almost any type of transaction in existence. This is the primary reason behind its rapidly growing popularity and power. It is designed specifically to accelerate and simplify the process of how transactions are recorded. This means that any type of asset can be transparently transacted using this completely decentralized system.
Blockchain provides a trust system of record between disparate entities. There is no involvement from intermediaries like the government, banks, or even technology companies. Instead, it is a massive collaboration with some great code which significantly reduces settlement and clearing times to a matter of seconds.
It is a form of a database which stores past information with unique attributes, such as:
- Decentralisation — no single party has control over what information goes in
- Consensus — many different parties store exact copies of the same ledger, so the majority must agree on the information being added.
- ‘Add-only’– you cannot edit what is already there, you can only add information. New information cannot conflict with what has already been added.
- Information can be accessed and replicated by everybody on the network
Non-Fungible Tokens (NFT) also uses blockchain technology to provide proof of ownership of a digital asset.
Check out more about non fungible tokens (NFT) here.