Blockchain is a technology for encrypting and storing data (a registry) that is distributed across multiple computers connected to a common network.
Blockchain is a digital database of information that reflects all transactions made. All records in a blockchain are presented in the form of blocks that are linked together by special keys. Each new block contains data about the previous block.
Blockchain is used to store and transfer digital data. It can be either financial or non-financial assets (e.g., images or objects from the video game industry). Blockchain technology allows an asset to be assigned unique information about its ownership by a specific person. This information cannot be tampered with, deleted, or changed unnoticed.
How and when blockchain appeared
The basic principles of blockchain (distribution and the aggregation of document authenticity data into blocks) were developed back in the early 1990s based on even earlier mathematical concepts. In 1991-1992, American scientists Wakefield Scott Stornetta, Stuart Haber and Dave Bayer described a technology for the sequential creation of blocks of data in which a certificate of authenticity and information about the date of generation are recorded using cryptographic algorithms and a hash tree. But the technical possibility for the practical implementation of this idea did not exist at that time.
In 2004, the American programmer Harold Thomas Finney II developed the RPoW system, which is considered a prototype of a cryptocurrency. In October 2008, Satoshi Nakamoto (this is the pseudonym of a person or group of people) in a scientific article about the first cryptocurrency, bitcoin, suggested using blockchain technology to create a decentralized and independent payment system with a limited supply of assets. The development of bitcoin began in 2007 and was completed in 2009.
Blockchain technology became relevant when the need for fast and reliable transmission of digital data emerged.
How blockchain works
Blockchain allows every participant in the network to have access to a distributed database. Blockchain does not store the data itself, but records of events (transactions) in their chronological sequence. All new records are authenticated – they must be validated by the majority of the network members before they can be entered into the blockchain. Records are grouped into blocks, which are combined into chains. Once on the blockchain, the data cannot be changed or deleted without compromising the integrity of the blockchain.