So, what exactly is “Blockchain”?
Many professionals find the concept of blockchain difficult to explain, and it is even more difficult for people outside the field to understand it.
Essentially, this is an evolution of several other technologies from the past. When put together, these technologies have the power to change the future.
The blockchain technology was developed on the foundation of other contemporary advanced technologies – cryptography, the internet, P2P networks and broadband connections. It emerged in 2008 as an underlying technology for one of its applications – the Bitcoin cryptocurrency. Although initially not named as a “blockchain” in the Satoshi Nakamoto’s White Paper, this underlying technology and its features attracted the attention of experts in different business sectors.
One of the main technical features of a blockchain is the transactions bundled into blocks, which are then chained together with other blocks by employing a cryptographic hash function. The cryptographic linkage enhances the security of the ledger, and the overall design increases the auditability.
Given the distributed network feature, blockchain technology has significant potential benefits to business as it employs consensus mechanism and reduces the trust gap, inherent in any trade or human interaction.