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What Is A Blockchain?

A blockchain is an immutable digital public ledger that records online transactions. It is best known for its use in powering cryptocurrencies such as Bitcoin.

Deeper Definition

Blockchain is a system of keeping records that is difficult or impossible to alter, hack, or cheat the system. By inherent design, the data on a blockchain cannot be modified, which means you can always trust it to be accurate.

At its core, a blockchain is a distributed database shared among a network of computer systems. However, blockchain is different from a typical database based on how it structures and stores information. For instance, a regular database structures data into tables, whereas a blockchain structures data into blocks. Each block in the chain contains various transactions, and every time a new transaction takes place, a record of that transaction is added to every participant’s ledger.

Blockchain technology is a revolutionary technology due to how it automatically encrypts and authenticates transactions. Its security system and transparency make it a vital technology for almost every sector since it can help minimize the case of fraud. However, it is currently mostly known for the role it plays in powering cryptocurrencies.

There are four main types of blockchain networks:

  • Public Blockchain: This is a type of blockchain that is entirely decentralized. It is permissionless, meaning anyone can join without permission.
  • Private Blockchain: This is a managed or centralized blockchain where users need permission to use the network. An organization, otherwise known as the central authority, controls the network.
  • Consortium Blockchain: This type of blockchain combines the features of both public and private blockchains. Typically, a group of organizations controls the network rather than one entity, as in the case of the private blockchain.
  • Sidechains: It is a blockchain ledger that runs in parallel to a primary blockchain. In essence, it allows users to move digital assets between two different blockchains.

Blockchain Example

Though blockchain technology is associated mainly with Bitcoin and cryptocurrency, the technology is revolutionizing almost every industry. For instance, MedicalChain is a healthcare company using blockchain technology to facilitate the storage and utilization of electronic health records to deliver a complete telemedicine experience.

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