Blockchain is a form of database stored in thousands of computers across the world. It is managed by a peer-to-peer network for use as publicly distributed ledger. Unlike a conventional database, blockchain is not saved in computers under one roof or controlled by one organization. It is, in fact, accessible to any of the thousands of computers– also called nodes, scattered across the globe.
Bitcoin also uses blockchain technology, in which case — it is a distributed ledger for recording transactions in the form of blocks. When a bitcoin transaction happens, it is transmitted to a network of computers that are spread worldwide. Following this, the network of computers solves equations to confirm the transaction’s validity. This leads to confirmation of transactions – and these transactions are put together into blocks.
These blocks – one next to the other – are tied into chains. This is why they are known as blockchain.
The transactions made in blockchain are secure and transparent. If one node tries to tamper with the stored data, other nodes will flag the anomaly after cross referencing with each other.
The transactions are decentralized. So, all the transactions can be viewed transparently. This way, anyone can witness the transactions happening live. Each node of the blockchain has a copy of the chain that keeps getting updated as the new blocks are confirmed and added to the chain.
It is important to note that the blockchain is used to store ledger of payments for bitcoin. But the technology of blockchain can be used to record any number of data points
Different applications of blockchain include inventories of products, deeds to home and votes in an election.