At its most basic level, blockchain is a system of storing information in such a way that it is impossible to hack or change. It is essentially a digital transaction ledger, with each block in a chain containing multiple transactions. These blocks in the chain are secured together using cryptography.
The Basics of Blockchain Technology
So far, we’ve established that a blockchain accumulates information into blocks and that these blocks hold sets of information. When these blocks are full, they are closed and connected to the previous block. This forms a chain of blocks, hence the name. Additional information is added to a consecutive block, creating a newly formed block that links to the previous one.
In addition to transaction data, each block contains a timestamp (which keeps track of when that block was created), and a cryptographic hash (a mathematical sequence that protects the integrity of the block and its information).
Due to this added security, blockchains are resistant to modification. This is because one block’s data cannot be changed without altering the data of the following blocks.
Blockchain technology is used in multiple sectors, with the most popular being crypto. Most cryptocurrencies, including Bitcoin and Ethereum, use this technology to store data and record transactions.
However, it can also be used to create a permanent and transparent ledger of tracking payments to creators and musicians. For example, in 2017, ASCAP (American Society of Composers, Authors, and Publishers) and PRS for Music partnered with IBM (International Business Machines Corporation) to start using this technology for royalty distribution.
Blockchain interoperability is the next step in the development of this technology. This is the ability of two or more blockchains to work together despite their differences. Interoperability is important to ensure that different industries can work together and create fully customizable web3 services.