Blockchain technology - what is it?

Blockchain is a revolutionary technology working wonders in our lives for years. However, most of us don't even know what it is. The truth is, we can find it everywhere: in the bank, at the hospital, the airport, or at the elections. You have no idea what blockchain is? You're in the right place! You'll find everything you need to know about blockchain technology on our Tokeneo News website.

What is a blockchain?

According to specialists, blockchain is a distributed and invincible transaction book (or Distributed Ledger Technology - DLT). As complicated as it sounds, we will try to explain it in simpler words. Blockchain is just a virtual chain of blocks - those "blocks" are carrying digital data of transactions made on the network this blockchain operates on.

We can divide those blocks into 3 types. The first one carries information about transactions: date, time, the amount of money transferred. The second type has information about the users conducting this transaction. And last, but certainly not least, has info distinguishing it from others. Every block has a unique code, called "hash". This hash allows us to differentiate transactions which look identical (they are not, even if you can't tell the difference). Each block can store even 1MB of data, which means thousands of transactions.

How does it work?

When the block stores new data, it's added to the chain. Blockchain, as the name suggests, consists of many connected blocks. However, in order for the block to be added to the blockchain, four things must happen. First, the transaction must occur. Then this transaction must be verified. In the blockchain, transaction verification is the task of computers connected to the network. These networks often consist of thousands (or in Bitcoin's case about 5 million) computers distributed around the world. Next, the transaction must be stored in a block. This block must have a hash. Once all transactions in the block have been verified, it must be given a unique, identifying code - previously mentioned hash. After those requirements are met, the block can be added to the blockchain.

Information stored in a blockchain is public. You can always look up the data you need - time and info about new users.