What is blockchain? – Bankrate.com

What is blockchain? – Bankrate.com

Blockchain technology is the technology that underlies cryptocurrency, enabling it to exist as a secure method of moving and validating transactions and information. In this sense, you could think of blockchain as akin to Microsoft Windows — a software platform — on which a variety of other software (such as cryptocurrency) is developed.

Here’s what blockchain technology is, how it works and why it’s so popular.

How blockchain works

Blockchain is a software application that tracks data by storing it in blocks that are then chained together chronologically. Think of a blockchain as a running receipt of transactions or data that are validated and stored and can be viewed later. Blockchain technology can underlie many different applications, such as cryptocurrency, smart contracts, tracking information and almost any other digital process that could require observation.

In the case of cryptocurrency, computers validate the movement of money from person to person over time, leaving a permanent record that can be accessed later, like a long receipt of every transaction ever made. Bitcoin brought blockchain technology to popular consciousness.

Blockchain technology is often decentralized, meaning that the ability to write to the database is given to a network of computers, as is the case with cryptocurrencies. This distributed ledger, as it is often called, tracks the data using the redundant power of the networked computers to validate the data. Each computer has access to this public record and as new transactions are added to the receipt or ledger, they’re verified
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