The business world runs on trust, but trust is hard to come by. A staggering amount of time and money is spent searching, validating, verifying, checking, auditing, certifying, and worrying — trust is an expensive proposition. Blockchains make trust easier and less expensive, which is why half a billion dollars was invested in block chain technology last year. Analysts expect that the block chain industry will be worth billions of dollars in just a few years.
Blockchains first came to prominence as the underlying protocol of the Bitcoin cryptocurrency. But blockchains aren’t limited to financial transactions and there are many types of blockchain, of which Bitcoin is just one example.
So what do blockchains have to do with trust? A blockchain can be thought of as a type of database or ledger. Information can be added to a blockchain and retrieved from it later. But no single individual has complete control over a blockchain.
To understand blockchains, you need to understand blocks, chains, and networks.
A block is a unit of information. Each records a set of transactions. Transactions are changes to the information stored in the “database”. The size of the blocks varies depending on the protocol, but every blockchain joins blocks together …