Blockchain is a mechanism that allows the storage of data electronically, in a manner that makes it hard for people or in the right words, impossible for people, to make changes within the system, or hack it.
It is a simple network of computer systems that allows the duplication and distribution of digital records of a transaction throughout the entire, exclusive, network. Each single block on the chain includes several transactions, where after every new transaction on the blockchain, the participants of the ledger also receive its copy.
DLT (Distributed Ledger Technology) is a type of database system that is not controlled by a single entity; instead, multiple users are involved in its maintenance and management.
Transactions which are stored in the blockchain database are accompanied by an unalterable digital signature referred to as a hash. Since it cannot be duplicated, a single modification within a block would become more highlighted if it appeared in only one of the chains, and not in others. Hackers would have to subsequently change each block, in the entire chain, in every distributed copy of ledge of each participant, to compromise a blockchain system, making it quite difficult and time intensive – making cheating and hacking quite difficult.
Blockchains like Bitcoin and Ethereum are continuously expanding, as the market grows, with each new block being added to the chain, greatly enhancing the security of the ledger.
What is causing blockchain technology to garner such a high degree of interest?
In the past, there have been several attempts at creating digital or electronic currency, yet all have gone in vain. The main problem remains that of trust, since anyone that invents a new currency has the ability to give himself an extra million or even take your share to keep. This issue was mainly addressed within blockchain technology to create Bitcoin, that prevented fraud, cheating and hacking.
Several of the most widely used databases, including the SQL databases, comprises of an administrator who has control over the entries being made into the system, and who can update these entries (e.g. giving themselves a million dollars) from time to time. Conversely, in comparison, as governed by the users of the ledger or chain, blockchain is unique in the fact that no one is in control.
Additionally, because bitcoins cannot be duplicated or counterfeit, those who are in possession of them can confidently claim them to be worthy within the market and to themselves.