Blockchain 2018: What is blockchain technology and how does it work? Posted on : Feb 10 - 2018

BLOCKCHAIN has rapidly emerged towards the end of 2017 as the most talked about technology in the world of financial tech and online services. But what exactly is blockchain and how does it work?

Veteran business strategist Don Tapscott argued in a 2016 TED Talk that blockchain had arrived to forever shape the future. 

Blockchain may have been around since the inception of bitcoin in 2008, but the technology did not really hit significant levels of mainstream awareness until almost a decade later.

Mr Tapscott said: “The technology likely to have the greatest impact on the next few decades has arrived. And it’s not social media, it’s not big data, it’s not robotics, it’s not even AI.

 “And you’ll be surprised to learn that it’s the underlying technology of digital currencies like bitcoin. It’s called the blockchain.

 “It’s not the most sonorous word in the world, but I believe it is now the next generation of the internet.”

What is blockchain?

Blockchain is a distributed peer-to-peer leader which facilitates the recording of transactions and assets on a business network.

Today blockchain is most commonly recognised as the underlying network on which bitcoin transaction are made.

But the reality is that virtually anything with any intrinsic value can be tracked on the blockchain. This includes money, property and even less tangible concepts such as patents and copyright.

Blockchain was the brainchild of the anonymous bitcoin creator Satoshi Nakamoto, as a means of transferring the cryptocurrency.

But the bitcoin blockchain is just one of many that have been since created, Mr Tapscott said.

Some of the biggest and most popular blockchain protocols around today include the Ethereum network, the Ripple Transaction Protocol and R3.

How does blockchain work?

The way the network operates is by utilising daisy-chained blocks of data which record and verify every single transaction that occurs.

Each block contains a hash – a digital fingerprint of sorts – as well as timestamped batched of recent blockchain transactions.

These are all linked together to prevent any outside tampering and strengthens the verification process when assets are moved. View More