Blockchain

From Smart Economy Wiki
Jump to: navigation, search

A blockchain, (block chain) is a term used to describe a ledger that is made up of groups of transactions known as blocks, that are added over time, and linked to each other with cryptographic hashes. The structure of blockchain has made it possible to securely write to a decentralized ledger from anywhere on the Internet, even without a trusted or centralized authority to validate the transactions. New transactions are grouped together periodically to form new blocks. These blocks are added to the blockchain in the same way as new pages of transactions can be added to the end of a book of transactions. As each new block is cryptographically linked to the block that came before it, a chain of blocks, or blockchain, is created.

Pseudonymous inventor Satoshi Nakamoto created the blockchain to secure the world's first successful cryptocurrency, Bitcoin. Bitcoin was the first successful cryptocurrency because its timestamped, linked blocks provide protection against the "double-spending" problem that plagued previous digital money projects. In a double-spend, a single digital token is sent to more than one address.

The NEO blockchain also uses a timestamped chain of blocks, although the mechanism by which new blocks are added to the blockchain is different than Bitcoin's.