What is Blockchain Technology?

If you’re just getting started with cryptocurrency, you have probably heard the term “blockchain technology” used to describe a wide variety of concepts. 

The term is, admittedly, a broad one. You’re just as likely to encounter blockchain in a white paper for a new cryptocurrency as you are in an advertisement from a major company like IBM. 

So, what does the term mean and why is it so widely used? Blockchain most often refers to a network of computers that uses a common software to order data in such a way that, after being sequenced, ensures it can’t be adjusted or tampered with by any one dishonest user.

Put another way, a blockchain creates a trusted record using cryptography. 

While most commonly associated with the Bitcoin white paper, the concept is an older one, and elements of this design can be traced to the work on which Bitcoin’s creator, Satoshi Nakamoto, referenced in the project’s founding document. 

Note: as of 2020, there remains debate over what the definition of blockchain technology should be and if and when it’s being correctly applied. 

This is due to the fact that there has been an effort to abstract the architecture of blockchains for uses beyond the ordering of transactions in cryptocurrencies. 

Some of these efforts will undoubtedly stretch the technology’s application too far, contributing to a more realistic understanding of its expected impact. 
 

为了充分了解区块链技术的潜能，就須深入深挖为其提供驱动的要素。 

首先，技术的根源在于密码学，则用于安全私人通信的技术和加密，加密则是对信息进行编码的过程。 

密码学 

今天的区块链是由密码学保护的，密码学是用于保护私人通信和数字数据移动的技术。

密码学是创建代码和密码背后的科学，使人们能够以一种私密和安全的方式传输信息。 

在20世纪初，密码学主要由军事和间谍机构使用，特别是在战争期间，私密通信是在岗位之间发送信息的重要方式。 

今天，密码学有助于保护区块链中的传输，使发送和接收数据和信息的过程更加高效和具有成本效益。

分布式账本

在区块链上，数学数据通过密码学的方式进行保护，从而创建由所有参与者共同拥有和维护，一个称为"分布式账本"的可靠记录。

作为可信数据库的替代品，分布式账本旨在让用户对其数据的维护进行更大程度的监督，同时降低可能作为敏感信息所有者的公司或机构的责任。 

鉴于这种影响，许多行业和机构利用区块链来建立一个可信的网络，以便简化信息共享和记录保存过程，同时提高其性能和安全性。 

智能合约

分布式账本的核心是 “智能合约”网络，即当协议编码在软件中时，则可以管理业务交易。 

这个想法是，在区块链上嵌入协议代码的程序可以快速地和数字化地执行至今需要由保险代理或金融中介中间人实施的那种合约。

由于业务受合约约束，因此在区块链执行智能合约有助于让交易流程更顺畅地运行。

As mentioned, the idea that there are blockchain use cases beyond cryptocurrency is still new. 

This means there has been an endless number of proposed use cases for these computing networks, some more realistic and practical than others. 

Below is a list of industries that have attempted to incorporate blockchain technology with varying degrees of success.

Cryptocurrency 

Blockchain technology’s original, and still most popular, use case is to power cryptocurrencies.
In fact, some would argue blockchains are their central element, allowing users to run software that then enforces the rules around their currencies, making this data scarce and valuable.

Because of their blockchains, cryptocurrencies can be borderless, durable, irreversible, permissionless or pseudonymous. 

If you would like more information on how blockchains help power cryptocurrencies, feel free to read our ‘What is Cryptocurrency?’ guide, which offers a more extensive explanation. 

Financial Services 

Given blockchains can now govern digital money supplies, major companies have sought to extend this technology further to other types of financial services.

As such, it’s believed blockchains could solve inefficiencies in parts of the financial system – inter-bank transactions, clearing and settlements – that have typically been the domain of some of the world’s largest and most opaque financial entities. 

The idea is these institutions can use blockchain technology to cut costs, better adhere to regulation and generally upgrade the somewhat antiquated technology that helps them run.

Business Management

One of the most talked about use-cases for blockchain technology is using it to manage supply chains for businesses. 

Global trade is a trillion dollar industry, with goods and services being shipped across the world daily. In order for something to travel from one place to the next, there are multiple supply chain participants, each relying on different systems to approve and process transactions.

Blockchain technology could help reduce the barriers formed from these different systems, removing certain costs and potential points of failures along the way. 

Record-Keeping

Records today, be it health care, real estate or voting, are often maintained by centralized data centers, which brings added costs and risks to the entities entrusted with them.

By nature, this means that information is vulnerable to security breaches and can be difficult and expensive to access. 

Many industries need a more efficient and secure system for managing these records while performing and recording other complex transactions. 

This is where blockchain technology comes in, and there is some hope it could help solve these long-standing issues, offering a mechanism for recording and maintaining comprehensive records while allowing individuals to have more control over their own data. 

Now you're ready to take the next step and buy some cryptocurrencies!