Blockchain is one of the most revolutionary technologies of the past ten years and it is the foundation of cryptocurrency. Learn about this unique decentralized network that has changed the potential for security, transparency, and more.
You might have heard of a little thing called bitcoin, one of the many cryptocurrencies that have taken the world by storm. In 2017 alone, the price of one bitcoin fluctuated from $1,017 in January to $14,600 by December. In 2018, volatility continued but not quite at the same rate with a low of under $6,000 in February and into today’s market price of around $7,600.
The advent of digital currencies, however, is only one side of a story that goes much deeper once you unpack the innovative technology they are based on. The underlying system, the blockchain, is the real technological breakthrough that will enable businesses and consumers to do things far beyond spending digital money.
How exactly does the blockchain work? Let’s take a look.
What Is Blockchain?
In short, blockchain is a decentralized system for storing and transferring vast amounts of information online and in a more secure environment than any traditional data storage platform has ever been able to provide.
The name “blockchain” actually points to the two key components that makes this system work: blocks and chains.
A “block” represents one unit that stores a certain amount of information or data. Once the block size limit has been reached, a new block is created in which more data will be stored. The new block will then be attached to the previously built block and — with the addition of other blocks coming into existence at a later point in time — together end up forming a chronological chain of blocks, or “blockchain”.