How does blockchain technology work?

The ledger file is not stored in a central entity servers, like a bank, or in a single data center. It is distributed across the world via a network of private computers that are both storing data and executing computations. Each of these computers represents a “node” of the blockchain network and has a copy of the ledger file.

https://medium.com/@micheledaliessi/how-does-the-blockchain-work-98c8cd01d2ae

What is a Distributed Ledger

A distributed ledger (also called a shared ledger, or distributed ledger technology, DLT) is a collection of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions.

There is no central administrator or centralized data storage.[1]

1.    Scardovi, Claudio (2016). Restructuring and Innovation in Banking. Springer. p. 36. ISBN 9783319402048. Retrieved 21 November 2016.

What is a Blockchain

The Blockchain, as it relates to Bitcoin is a public, distributed ledger that records transactions.  It’s architecture is a chain of blocks where each block in the chain is connected to the prior block via a Hash value.  Since each block is connected to the prior, the chain is touted to be immutable and immune to compromise. 

The public nature of this chain requires that all participants in the chain download and maintain a copy of the entire chain, they are then referenced as a “Node”. Each of these nodes can also validate transactions to the chain utilizing a “proof-of-work”, “consensus model” to add blocks to their chain and then communicate the added blocks to the rest of the nodes in the network. 

The chain is also hailed as disaster resistant since each node has a complete copy of the chain, if any node loses its copy then their copy can be replaced by copy from another node, by design there is network wide redundancy.

A Bit of History

Bitcoin began with it’s genesis block (first block in the chain) in January of 2009, which was based upon a paper published in November of the prior year by a “Satoshi Yakamoto” (said to be a pseudonym), the paper was titled “Bitcoin: A Peer-to-Peer Electronic Cash System”[1].  Although this was the first mainstream implementation of this concept, it’s predicates can be traced back to 1991.


     How to Time-Stamp a Digital Document [2]
        Stuart Haber and W. Scott Stornetta, 1991

[1] https://bitcoin.org/en/bitcoin-paper

[2] https://nakamotoinstitute.org/literature/time-stamp-digital-document/

Welcome

The term Blockchain that is so ubiquitous today needs to be understood for business to start to be able to understand how it can provide value to their operations.  This term is better understood being much like the terms “Xerox” or “Coke”, in that it is actually specific to a certain implementation or product, but being used to generically point to a concept.

A Blockchain is a type of distributed ledger technology (DLT), however the term “Blockchain” has evolved to be the synonym of choice due to the rise….and fall…and rise……and fall of “Bitcoin.”

This blog exists to provide a point where we can define terms, discuss concepts and explore the world of Distributed Ledger Technologies.

Check back often, contribute your thoughts and let's see what the future may look like with the opportunities that Distributed Ledgers and Blockchain's represent.