Blockchain

Blockchains are distributed ledgers used to store the transaction history of cryptocurrency protocols. Historically ledgers have been centralized. Blockchains decentralized them by leveraging cryptography to secure protocol data via a peer to peer network of nodes instead of a trusted third party.

Vitalik Buterin, a founder of Ethereum, described them as “a magic computer you can upload programs to and leave the programs to self-execute.”

The name is derived from the process used to add new blocks to the network. Once a block is discovered by the miners of the network and verified by its nodes. The new block is linked to the previously created blocks adding to the network’s chain of transactions.

Different blockchains have different consensus algorithms depending on how complex or simple they need this verification processes to be. For example Bitcoin, the most famous implementation of blockchain technology, uses a proof of work consensus algorithm to add blocks to the network.

Further Reading Blockchain

What is Blockchain Technology? A Step-by-Step Guide For Beginners