Blockchain and smart contracts are used in discussions about changes across many industries. This introduction explains the concepts covered in the source article: the history of blockchain, related technologies, how blocks connect and examples of possible uses.
Blockchain’s origins
The article traces blockchain to the ideas behind Bitcoin in 2008 and to Satoshi Nakamoto, a pseudonym used by Bitcoin’s creator. It describes the original design as a decentralized financial system that did not require an intermediary such as a bank. Blockchain became more widely discussed as Bitcoin gained popularity, and developers began exploring other applications.
Related technologies
Hashing: A hash function maps data of any size to a fixed-size value. A small change to the input can produce a substantially different hash.
Symmetric encryption: The same key is used to encrypt and decrypt information. The method can be fast, while safely sharing the key is an important challenge.
Asymmetric cryptography: Public-key and private-key pairs are used in cryptographic systems. The source article describes using a public key to encrypt data and a private key to decrypt it; the exact use depends on the cryptographic scheme.
Digital signatures: A digital signature can help verify the signer and whether signed data has changed. In the article’s description, a private key creates a signature and a public key checks it.
How blocks are linked
A blockchain stores information in blocks connected in sequence. A block may contain data, its own block hash and the previous block’s hash. The previous hash links a block to the one before it. When new transactions or records are added, they are placed in a new block connected to the preceding one. A block hash is calculated from the block’s data and previous hash, so changing the data changes that hash.
Proof of work and Bitcoin mining
Proof of work (PoW) is one mechanism used to create blocks. In the source article’s simplified explanation, participants compete to solve a computational puzzle; a successful miner can receive cryptocurrency as a reward. Bitcoin mining uses computing power to compete to add a new block to the Bitcoin blockchain, with the successful miner receiving Bitcoin under the network’s rules.
Changing recorded information
The article explains that changing information in a blockchain can be difficult because the affected block and following blocks would also need to be changed, requiring substantial computing resources. The practical security properties depend on how a particular network is designed and operated.
Examples of blockchain applications
The article lists possible uses such as checking credentials, managing supply chains, voting and personal records. It also discusses financial transactions such as transfers and payments, and checking product, travel or medical information. These are examples of proposed applications; a blockchain is not automatically the best solution for every data or business problem.
Learning and working with blockchain
The source article describes the field as complex for newcomers and suggests learning through study, communities, projects or work with related companies. It mentions online material, books and courses, as well as teaching through talks, training or workshops. Applying the technology might include building an application for managing information or a platform that uses smart contracts for transactions.
Blockchain continues to develop. The article names smart contracts, decentralized finance (DeFi) and non-fungible tokens (NFTs) as examples of related developments, and encourages readers to exchange ideas through online groups, conferences and other community events.
Blockchain and digital-asset projects involve technical, operational and financial considerations. This overview does not assess a particular project or recommend an investment.
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