Unless you’ve been living in Slab City or off the grid for a while, you’ve probably heard this year’s omnipresent buzzword ‘blockchain.’ But perhaps you’re a bit clueless as to what this newer technology entails.

In a recent HSBC survey of 12,000 respondents in 11 countries, 80 percent of people could not explain how blockchain works. Don’t worry, you are not hanging in the blockchain rafters alone. I’m one of the 80 percent dangling right along with you and will attempt to simplify this emerging technology under the brass tacks of Blockchain 101.

What is Blockchain?

Blockchain is a distributed database that maintains a list of records. Each record is called a block, and each block contains the history of every block that came before it.

Authors Don and Alex Tapscott of a book titled Blockchain Revolution[1] describe the blockchain as “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”

Steve Wilson of ZDNet says the following:

“Blockchain is an algorithm and distributed data structure for managing electronic cash without a central administrator among people who know nothing about one another. Originally designed for the crypto-currency Bitcoin, the blockchain architecture was driven by a radical rejection of at (government-guaranteed) money and bank-controlled payments.”

Wilson describes blockchain as “a special instance of Distributed Ledger Technologies (DLTs), almost all of which have emerged in Bitcoin’s wake.”

The definitions listed above are correct, but all three definitions still tend to leave me (and perhaps you) dangling once again–only this time, we’re all sitting here peering through opaque glasses.

From the above definitions, we can surmise that blockchain involves digital ledger technology and that each of these electronic transactions can be broken into blocks [with date, (Read more...)