What is a blockchain?

The idea of the blockchain was first conceptualized in 2008 and was first implemented in 2009 by “Satoshi Nakamoto”The identity of Satoshi remains unknown to this day.. It is the core element not only of the first and to date most well-known cryptocurrency network: Bitcoin, but of all other cryptocurrencies and other possible applications of blockchain technology.

As documented in the original Bitcoin whitepaper, Satoshi’s central concern—leading up to the invention of the blockchain—was the creation of an independent and decentralized electronic payment system based on mathematical proofs and cryptography:

Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. […] What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.

What has become known as the blockchain is one of the core components of the underlying technology that enables such a system.

A blockchain is a radical digital concept about data storage. In it data is organised in blocks which get chained together programatically using cryptography. As blocks of data get chained together in a virtually unbreakable manner over time the stored data becomes immutable: it can never be changed again. 

Each block of data succesfully added to the blockchain is made up of multiple components: each block will contain, among other things: a list of recent transactions within the network and a reference to the block previously committed to the blockchain, as well as a registered solution of a complex mathematical problem generated as part of the process known as “Mining”.

Crucially, any and all the data stored in the blockchain is always publicly available to anyone—now or in any point in the future—exactly as it was added to the blockchain. This setup is quite revolutionary: through it it is possible to keep track of all sorts of records—from money balances, identities, property rights, medical records—without the risk of someone tampering with these records. If you were to buy a car tomorrow and added a photo of the document proving your ownership to a blockchain, you would always be able to prove that you owned that car at some point. Nobody can change information that has been committed to the blockchain: the blockchain is the best way we have by far to save data and make it immutable .

In summary: the blockchain is a potentially endless growing list of data records (a chain of blocks); a distributed and public digital ledger in which data that is cryptographically connected and secured.