How it works: Understanding Blockchain technology

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In essence, a Blockchain is a ledger of accounts. Every transaction, the sale of a house, or a manufacturer delivering a shipment of tires to a distributor is recorded as a “block.” Each new block is added to the “chain” that serves as a permanent record of transactions pertaining to an item. Each block, or transaction record, is digitally woven into the chain, making it difficult (or impossible, according to Blockchain advocates) to extract or alter that block.

A Blockchain is vastly different from conventional bookkeeping, because the chain is held by every entity that’s had anything to do with the item being tracked.

To take part in a Blockchain transaction, a person or business must be admitted to the Blockchain’s group of users. Each user is assigned a numerical key that signifies his/her digital address in the chain. Each also is assigned a second key that gives access to the chain.

When a transaction “block” is posted to the chain, the chain’s software validates the user and the transaction. Then, the new block is welded into every copy of the chain, whether a few or thousands, spread across the Internet. TJ

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