What Is a Blockchain – Definition
Blockchain Definition: Blockchain is a technology that optimizes how information is stored and transmitted in several sectors, such as the economy, finance, banking and insurance.
In trading, a blockchain is a database used to record and store information about transactions. Thanks to blockchain, information is transmitted transparently, securely and without the involvement of a controlling institution.
This technology is generally used in 3 contexts:
- Transferring assets (currency, shares, securities, etc.);
- Improved traceability of assets and products;
- Automatic execution of contracts (smart contracts).
A blockchain has a decentralized structure. This means the technology does not run on a single server but through a portion of its users. It also has no intermediary, and cryptographic processes protect the information contained in the blocks. This system prevents users from making changes after the fact.
If this topic interests you, also see “Cryptocurrency Definition” and “Hashrate Definition“.
Blockchain Synonyms
- Chain of blocks
- Blockchain technology
- Cryptographic ledger
- Distributed ledger
- Digital ledger
- Public transaction ledger
Blockchain Etymology
Blockchain is a compound of two words: “block” and “chain”. In French, blockchain is translated as “chaîne de blocs”.
Terms and Vocabulary Related to Blockchain
Block – Definition: A block is a set of information that continuously transmits data recorded on the blockchain network.
Block Explorer – Definition: A block explorer is a platform that displays the transaction history of a blockchain. It provides essential information such as the network hash rate or the number of transactions.
Block Height – Definition: Block height refers to the number of blocks linked together on the blockchain.
Dapp – Definition: A Dapp, or decentralized app, is an open-source application. This open-source application is autonomous and stores data on a blockchain in the form of cryptographic tokens.
Forks – Definition: Forks refer to a blockchain splitting into two paths. They are alternative chains that run alongside the original blockchain.
Hash Rate – Definition: The hash rate corresponds to the performance level of a mining platform. It is expressed in hashes per second.
Hash – Definition: In cryptography, hashing means generating a fixed-length string of characters from a data set of any size.
Consensus – Definition: Consensus is the agreement of all participants on a blockchain network to validate transactions.
Node – Definition: A node is a copy of the ledger held by a participant in the blockchain network.
Transaction Block – Definition: A transaction block is a set of data grouped into a block.
Private Key – Definition: A private key is a string of data that gives access to the tokens in a specific wallet. The private key therefore acts as a password for the owner of an address.
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Medical Blockchain – Definition: In healthcare, blockchain is a tool for storing patients’ private information under a private key. Data such as invoices are then sent directly to insurance companies for validation.
Legal Blockchain – Definition: Under French law, a blockchain is a decentralized electronic recording system used to authenticate transactions in specific securities, under the April 2017 ordinance on short-term notes (bons de caisse). Blockchain is used mainly in the context of crowdfunding.
What Is a Public Blockchain?
A public blockchain is a transaction database that anyone can access. Its users can therefore carry out a transaction at any time and with complete transparency. However, verifying transactions and adding them to the blockchain requires real participants. This is known as cryptocurrency mining.
Cryptocurrency mining uses high-end computer hardware to encrypt data. Since the pandemic, the number of people who have taken up mining has risen sharply. These miners are rewarded for each block they process.
However, only the fastest make a profit. A public blockchain has no intermediary in its process because it is fully decentralized. Many users share this blockchain and verify the validity of the chain themselves. This is the most popular model.
What Is a Consortium Blockchain?
A consortium blockchain is a database in which encryption and verification are carried out by third parties. These are trusted entities or financial organizations that ensure the process runs smoothly. A consortium blockchain is not fully decentralized. Moreover, the database only becomes accessible to the public when all the third parties decide so. Generally speaking, however, the blockchain’s participants have the right to access it.
What Is a Private Blockchain?
A private blockchain is a centralized blockchain model, which means a trusted financial organization is responsible for recording and encrypting the data. It presents itself as a database that could be open to everyone, but most often access is limited to its participants. Private companies particularly favor this blockchain model.
Key Takeaways
To conclude this article, here is a reminder of all the key points mentioned:
- A blockchain is a database that stores information inside blocks that are linked together.
- Blockchain technology is the platform on which cryptocurrencies such as bitcoin are based.
- A blockchain can be centralized or decentralized depending on the model: public, consortium or private.
- Tokens and smart contracts are based on blockchain technology.
Do you have any other questions about blockchain? Feel free to ask us in the comments!
Also read: Etherscan Review