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Blockchain Basics

A blockchain is a ledger of records arranged in data batches called blocks which use cryptographic validation to link themselves together. Each block references and identifies the previous block with a hashing function, forming an unbroken chain.

What makes a blockchain unique, and of value, is that it’s a database - with built in validation. The truly unique part is that the database is not stored in a specific location, but instead it is distributed. Since those who access the data have only a copy and not the original file they can’t change, modify, or tamper with the file. Perhaps the best definition of a blockchain is that it’s an independent, transparent, and permanent database coexisting in multiple locations and shared by a community.

The team at Blockgeeks.com have created the following graphic which is a great explanation of how blockchains work:

There are not yet clear standards to govern how blockchains will be implemented across an enterprise. Some companies may choose to use the bitcoin network, while others may opt for “permissioned” or semi-private blockchains.

While concerns about privacy remain, especially for financial services applications, 2017 will see many industries working to take advantage of the benefits of blockchains.