What is blockchain?
Blockchain is a distributed database that anybody can access. It’s also sometimes called “distributed ledger technology” as there is no centralized entity or a regulator to control it.
How is blockchain different from a regular database?
A regular database is stored on designated servers controlled by the organization that owns said database. Blockchain is beyond the control of any person or company, and its security stems from its distributed nature. If some computers storing blockchain are compromised, it will not affect the entire system in any way. For a regular database, that is not the case.
How does blockchain work?
In theory, you can write anything onto blockchain: from money transactions to the full collection of all the books ever written. In order for the data to make it to blockchain, it has to be verified. In bitcoin (or money transactions in general), it’s the job for so-called miners. They check the validity of a transaction, and if it checks out, record it in the block. After that, the transaction remains in the blockchain forever, and anyone can see it there. Any transaction has to receive several confirmations from independent and unrelated sources to be verified.
Where is blockchain stored?
Blockchain can be stored anywhere and everywhere. There are special network nodes that store the full and up-to-date version of the blockchain, while others just address them when they need to check something out. The full blockchain is downloadable from open sources. If you do it, you’ll have your own copy as well.
Why the hype around blockchain?
Blockchain is sometimes compared to the internet in terms of its transformative potential. Right now, people or companies have to deal with lawyers, notaries, regulators, bankers, and other bureaucrats in order to confirm and verify events, such as the reception of a paycheck or an apartment sale. Blockchain can do all this verification work fully automatically, thus eliminating the very need in all intermediaries.
Where do they use blockchain?
Blockchain is used in most cryptocurrencies: it underpins their operation. Blockchain also has use cases in banking, property registration systems, as well as state-run ledgers, supply chain management, and digital identity solutions. Finally, it finds its use in the power industry, voting, games, the internet of things, etc.
What is the difference between public and private blockchain?
Anyone can access a public blockchain, while accessing a private blockchain is a privilege for a chosen few. There can be lots of different blockchains: some of them are public, some of them are private. They cannot interact as yet because the rules of blockchain A may directly contradict the rules of blockchain B.
How can several blockchains interact?
Over the years, developers and experts have proposed lots of options to solve this problem. Many deem sidechains the most promising of them all. Sidechains are blockchains designed specifically to connect two blockchains while bypassing any possible contradictions in their respective rules.