Blockchain is a term used in the realm of computer programming, referring to a specific method of recording information and sharing it with others online. A blockchain is a constantly growing list of recorded data, which are called blocks, which have all been linked together through the use of cryptography. These blocks all have to contain a cryptographic hash (which links each block directly to the one that came before it), a time stamp, and also the data being recorded. All of these components are necessary in order to be considered a Blockchain and be used for their intended purpose.
Blockchain was invented in 2008, by someone (or possibly a group of individuals) using the name of Satoshi Nakamoto, for the purpose of being used by Bitcoin. Bitcoin is a cryptocurrency used so that individuals can transfer money and make payments through the internet. A major problem facing any business that facilitates the transfer of funds through the internet is that their systems are vulnerable to being hacked remotely, meaning that users could be suddenly robbed without any warning or way to get their money back. Blockchain was designed in order to solve this problem and help secure the online transfer of money. Today, it is being used by essentially every cryptocurrency in existence and a variety of other financial services.
The reason that Blockchain has so quickly become used prevalently throughout all of the various cryptocurrency services is because of the simple but ingenious way that it is resistant to the modification of the data that it contains. Because of the fact that each block in a Blockchain contains a cryptographic hash that links it to the block that comes before it, the data in any given block cannot be changed without making it obvious that the Blockchain has been tampered with. The fact that there are time stamps recorded within each of the blocks as well, it is even more difficult to interfere with the transaction data without any evidence being left behind.
Blockchain is not entirely without its flaws, however, and as a result, organizations such as banks and other large corporations remain wary of using cryptocurrencies in order to facilitate transactions. By design, blockchains are stored publically through the use of peer to peer networks. As a result, the data stored within blockchains is not able to be stored in a centralized location and is not vulnerable to the flaws that other systems suffer from. However, because of this lack of centralization, all of the Blockchain information is public, and private transactions are not able to be made. Large banks who ensure their customer’s privacy, for obvious reasons, do not make use of Blockchain as a result.