The concept of blockchains technology is set to revolutionise not just the finance or healthcare industry but many aspects of business, government and even our personal lives. The problem is that there is so much hype and misunderstanding out there, which made me take a step back and explain the basics of what blockchains are and how they work – in a very simple way, that hopefully anyone can understand, even with no prior technical knowledge necessary.
At its most basic, a blockchain is a computer file used for storing data – information. Like any computer file (including the document you are reading now) it exists on a digital storage medium, such as a computer hard drive. And it takes the form of a string of binary “bits”, ones and zeros, which can be processed by computers to be made readable by humans.
Blockchains, however, have three properties which, while not unique individually, when put together mean they function very differently than other types of computer files.
The first is that they are distributed. The file containing this article can, in theory, simply be stored on one computer and accessed over the internet by however many people want to use (i.e read) it. A blockchain, on the other hand, is duplicated, in its entirety, across many computers.
Listen to this episode to find out more about the history of crypto.
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