Blockchain technology, the power behind the distributed ledgers that allow for digital currency, is applied in new ways every day.
The most basic definition of block chain is a shared, digitized ledger that cannot be changed once a transaction has been recorded and verified. All parties to the transaction, as well as a significant number of 3rd parties maintain a copy of the ledger (i.e. the block chain), which means it would be practically impossible to amend every copy of the ledger globally to fake a transaction. Bit coin’s success has triggered the establishment of nearly 1000 new crypto currencies, leading to the delusion that the only application of block chain technology is for the creation of crypto currency.
However, the blockchain technology is capable of a lot more than just cryptocurrency creation and may support such things as transactions that require personal identification, peer review, elections and other types of democratic decision-making and audit trails.
With a blockchain, many people can write entries into a record of information, and a community of users can control how the record of information is amended and updated. Likewise, Wikipedia entries are not the product of a single publisher. No one person controls the information.
Tt is a combination of proven technologies applied in a new way. It was the particular orchestration of three technologies (the Internet, private key cryptography and a protocol governing incentivization) that made bitcoin creator Satoshi Nakamoto's idea so useful.
| Blockchains are built from 3 technologies
|1Private key cryptography
||Program ( The blockchain’s protocol)
|Cash Vs. Plastic
||Tree falls In a forest
||Tragedy of the commons
||System of record
Functionality of Blockchain
Two people wish to transact over the internet.
Each of them holds a private key and a public key
The combination of these keys can be seen as a dexterous form of consent, creating an extremely useful digital signature.
In turn, this digital signature provides strong control of ownership.