Looking for something?

What is Blockchain Technology?

Blockchain can be seen as a shared distributed ledger in which every transaction performed is digitally signed. This technology enables direct online transactions between people or parties who do not know or trust each other, without the need for a central party or intermediary.

Blockchain allows for the transport of data in a transparent, verifiable, secure manner and is impervious to failures because the system does not rely on central servers. The difference between a ledger and the blockchain is that the blockchain is decentralized and open. It is seen as the technology that has the potential to play an important role and start reshaping many industries and sectors.

Blockchain in the news

Even well-known news media are discussing blockchain technology and cryptocurrency. Such as: The New York Times, The Wall Street Journal, and more!

Blockchain networks provide the digital infrastructure for digital payment units (cryptocurrencies) and decentralized applications (dApps). These dApps are often developed in conjunction with different cryptocurrencies. The most well-known blockchain platform is Bitcoin, but Ethereum, Cardano and Polkadot are also quite well-known.

"Blockchain can be seen as a shared distributed ledger in which every transaction performed is digitally signed."

What does Blockchain mean?

Blockchain is a term that is becoming more common, but what is it really? Blockchain can take several forms, but in general blockchain is, DLT technology.

DLT stands for ‘distributed ledger technology’ , this freely translated means that it is a kind of register in which information can be stored. However, it is also ‘distributed’ or decentralized. This means that this is not a register that is in one place like a company. Decentralized means that the registry is spread out in different points around the world.

To explain this in more simple terms, let’s take Bitcoin as an example. With Bitcoin, anyone, including you, can download and run the Bitcoin ledger or registry on your computer. This would make you part of the decentralized Bitcoin network. The data is spread all over the world and can be accessed by anyone.

How does blockchain technology work?

It is called a blockchain because the registry is made up of all different ‘blocks’ or blocks. Information in the blockchain registry is stored in blocks and all the blocks together form the blockchain.

These blocks, once in the registry cannot be modified either and form an immutable registry. Every time there is new information between the last block and the new block it is stored in it. In many cases this register is used to store transactions, but that is not the only thing that can be stored, it is a register where you can basically store anything you want.

So through this technique it is impossible to commit fraud because everything is public and transparent.

Example:

For example we have Blockchain X: the only things stored in this blockchain are financial transactions. At 10 o’clock there are 100,000 transactions in register X with 1000 blocks, which count for all the transactions ever made.

Between 10:00AM and 10:10AM, 100 transactions occur. When at 10:10AM, a new block is “added”, this block contains those 100 new transactions.

The blockchain register now consists of 1001 blocks containing 100,100 transactions in total.

Looking back at the above example, there are several ways to actually ‘add’ these blocks of information, the two biggest possibilities are the so-called:

  • Proof-of-Work
  • Proof-of-Stake

What can blockchain technology be used for?

Blockchain today is much more than just a registry for transactions.

Blockchain can be used as a tool to store other data, for example, registering elections to prevent voting fraud, stopping the production of counterfeit goods, food safety etc.

There are many different use cases about blockchain to be found and there are more every day.

Take a look at all our research reports and you’ll learn about all the different possibilities imaginable.

Smart Contracts

In addition, blockchain technology offers the possibility of enabling “smart” contracts (also called “smart contracts”).
Read more about that here.

This growth in possibilities is also characterized by the name that various blockchain projects are appropriating, such as the so-called blockchain 1.0, 2.0 and 3.0 revolution.

In summary, blockchain is a decentralized register or database that consists of blocks where the actual data is stored. New information is stored in new blocks that can largely be found by proof-of-work or by proof-of-stake.

Read more about smart contracts here.