Blockchain

Blockchain technology ensures the accuracy and security of the data stored in it. By storing data in interconnected blocks, the transaction history (e.g., cryptocurrencies) is irreversible. The technology itself was created by Stuart Haber and W. Scott Stornetta in 1991, but it only began to be actively used in 2008 with the launch of Bitcoin.

How blockchain differs from a database

Information in databases is structured differently—data is stored in tables. Blockchain, on the other hand, groups sets of information into blocks. Each block has limited space for data storage, and when it is filled, it is closed and linked to a previously filled block—a chain of such blocks is called a blockchain. At this time, any new information is compiled into a new, not yet filled block, and each new block in the chain is assigned an exact timestamp.

The possibilities of blockchain technology

Data recorded using blockchain technology is almost impossible to change, falsify, or hack due to the storage of transaction history or data interactions. In addition, blockchain management is decentralized, meaning that each participant manages the database — this format is also known as distributed ledger technology, or DLT.

Indeed, without blockchain technology, it would be impossible to create the mechanism by which cryptocurrencies operate. However, this format can also be used to store data on legal contracts, government elections, state identification, or inventory of products manufactured or owned by a company.

First and foremost, blockchain technology improves security:

• protects data from fraudsters;
• ensures the transparency of stored data;
• reduces other security-related risks.

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