A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography in a digital ledger that is distributed, decentralised, verifiable and irreversible. It can be used to record transactions of almost anything of value.
A distributed ledger is a database shared across a network of computers, updated independently by each member of the network. Records are stored at every node on the network, with every node processing every transaction. The blockchain network operates in a state of consensus or agreement, which automatically updates and reconciles every transaction that happens in ten-minute intervals. Each group of these transactions is referred to as a “block”. Once each block is completed it is added to the chain of records, creating a chain of blocks - hence the name blockchain.
The blockchain can’t be corrupted, because altering any piece of information would require a huge amount of computing power to override the entire network.
By storing data across its network, the blockchain eliminates the risks that come with data being held centrally. Secured using cryptography, applications are well protected against hacking and fraud.
Two technologies are emerging as standards for building blockchain applications – IBM Hyperledger Fabric and Ethereum.
A smart contract is computer code that executes transactions, enabling the exchange of money, content, property, shares, or anything of value.
When running on the blockchain a smart contract acts as a self-operating computer program that automatically executes when specific conditions are met.
Because smart contracts run on the blockchain, they run exactly as programmed without any possibility of censorship, downtime, fraud or third party interference.
Blockchain is being used across a wide range of services and industries for crowd funding, identity, digital rights management, energy markets, board governance, auctions, chronic disease management, emergency management, community management, licensing, IP and copyright protection, privacy and finance.