Blockchain is software designed to make a decentralized database.
This system is fully “Open Source”, which means that anyone can see, edit, and propose changes to the underlying code base.
While it became increasingly popular thanks to Bitcoin growth – actually existed since 2008, making it around a decade of old (ancient in computing provisions).
The most important point about “Blockchain” is that it is designed to create applications that do not require central data processing services. This means that if you use the build system on it (i.e. Bitcoin) – your data will be stored at 1,000 of the “independent” servers throughout the world (not owned by central services).
How the service works by making a “big book”. This ledger allows users to make “transactions” with each other – have the contents of the transaction stored in the new “block” of each “Blockchain” database.
Depending on the application that creates transactions, they must be encrypted with different algorithms. Because this encryption uses cryptography to “scramble” data stored in every new “block”, the term “Crypto” explains the cryptographic security process of every new blockchain data that can be made by the application.
To fully understand how it works, you must appreciate that “Blockchain” is not a new technology – it only uses technology in a slightly different way. The essence of it is a data chart known as “Merkle Tree”. The Merkle tree is basically a way for a computer system to store the chronologically booked “version” of the data set, which allows it to manage a sustainable increase to the data.
This reason is important because the current “data” system is what can be described as “2D” – which means they have no way to track updates to the core dataset. The data is basically stored completely like – with updates that are applied directly there. While there is nothing wrong with this, it causes a problem because it means that the data must be updated manually, or it is very difficult to update.
The solution provided by “Blockchain” is basically the creation of the “version” data. Every “block” added to the “chain” (chain “into a database) gives a list of new transactions for the data. This means that if you can bind this function into a system that facilitates data transactions between two or more users (messages etc.), you will be able to create a fully independent system.
This is what we see with people like Bitcoin. Contrary to popular beliefs, Bitcoin is not a “currency” itself; This is a list of great financial transactions.
This public book is encrypted so that only the participants in transactions that can see / edit data (hence the name “Crypto”) … but more, the fact that data is stored – on, and processed by 1,000 servers worldwide means services can operate Independently of any bank (main draw).